Think the “Foreign Corrupt Practices Act” is a U.S. Issue? Think Again!

Last February the former chief executive of KBR, Inc. was sentenced to 30 months in prison for his role in a massive, decade-long scheme to bribe Nigerian government officials to win $6 billion in contracts for development of the Bonny Island liquefied natural gas facility.

Albert “Jack” Stanley, 69, had pleaded guilty in September 2008 in a scheme to route $182 million in bribes to Nigerian government officials. And his sentencing sent a chill through executive suites of not just U.S. corporations, but multi-national and non-U.S. foreign corporations as well.

But what really caught the attention of the executive suite world-wide was the degree to which persons and companies outside of the United States became caught up in a bribery and kick-back scandal prosecuted under a law generally thought to affect only U.S. companies.

Two former consultants for Houston-based KBR who also pleaded guilty: Jeffrey Tesler, a 63-year-old U.K. lawyer, was sentenced to 21 months in prison, two years’ supervised release, a $25,000 fine and forfeiture of $149 million. Wojciech Chodan, 74, also a UK citizen who had worked for KBR’s UK subsidiary, was sentenced to a year of unsupervised probation and a $20,000 fine. Both had been extradicted from the UK to be tried in the United States.

And that’s not all, as part of the same U.S. probe, Paris-based Technip SA (TEC), Europe’s second-largest oilfield services provider, agreed pay $338 million to avoid prosecution and resolve claims by the U.S. Security & Exchange Commission (SEC).

The Dutch engineering firm Snamprogetti Netherlands BV, a venture partner, agreed to pay $365 million with the help of former parent company Eni SpA (ENI) to settle criminal and civil allegations.

And JGC Corp., a Tokyo-based construction and engineering company, agreed to pay a $218.8 million criminal penalty to avoid prosecution for its role.

This past week I attended an AmCham (American Chamber of Commerce in Russia) roundtable in Moscow that focused on Russia’s (Business) Competition Law and the U.S. Foreign Corrupt Practices Act. For some time now, AmCham and the Russian Federal Anitmonopoly Service (FAS) have been cooperating in developing new laws and procedures to combat bribery, price fixing, cartels, opaque transactions within supposedly open tenders, mis-use of Russian media for “black” PR campaigns against competitors, so on and so forth.

And FAS is achieving results. Of particular interest to foreign service companies and equipment exporters is the issue of assessing their distributors and intermediaries. Did you know that you aren’t necessary “above it all” if your distributor bribes without your knowledge and then investigators trace back the source of the equipment to you? And that applies to investigations not only under Russian law, but also the U.S. Foreign Corrupt Practices Act.

Read more …

Think the “Foreign Corrupt Practices Act” is a U.S. Issue? Think Again!,” Apr 22, 2012

TRACE International, Inc. is a non-profit membership organization that provides several core services and products, including: due diligence reports on commercial intermediaries; model compliance policies; an online Resource Center with foreign local law summaries, including guidelines on gifts and hospitality; in-person and online anti-bribery training; and research on corporate best practices. TRACE was founded to achieve economies of scale and set a common standard for two shared elements of anti-bribery compliance: due diligence reviews and anti-bribery training for business intermediaries and company employees based around the world.

FAQ: The U.S. Foreign Corrupt Practices Act (FCPA)