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  • Linde Gas Agrees to Pay DOJ More Than $11 Million, Receives Declination of FCPA Charges

    On Friday, June 16, the DOJ issued a declination letter to attorneys for Linde North America Inc. and Linde Gas North America LLC (collectively, “Linde”), in which the DOJ declined prosecution and closed an investigation of Linde and certain of its subsidiaries and affiliates regarding potential FCPA violations that occurred between November 2006 and December 2009. Linde, part of Germany’s Linde Group, which trades only on German stock exchanges and which has no securities registered with the SEC, agreed to pay DOJ a combined $11.2 million in disgorgement and forfeiture. 

    According to the DOJ letter, Spectra Gases, a New Jersey-based company acquired by Linde in October 2006, made corrupt payments to officials at and related to a Republic of Georgia state-owned and controlled entity to ensure continuity of business. Upon discovering this conduct, Linde initiated an internal investigation and subsequently withheld monies earmarked for a company controlled by the Georgian entity. These monies comprise the approximately $3.4 million that Linde agreed to forfeit.

    The DOJ letter stated that its decision is consistent with the FCPA Pilot Program, launched in April 2016 to encourage companies “to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.” Accordingly, the DOJ determined that Linde had, among other things, voluntarily self-reported potential FCPA violations, conducted a thorough and proactive internal investigation, and continues to cooperate fully and remediate its compliance program and internal controls. Notably, the DOJ letter does not foreclose future prosecution of any individuals, and the letter explicitly delineates DOJ’s expectation that Linde will continue cooperating fully in any ongoing investigation of individuals.

    DOJ FCPA Enforcement Action Linde North America Anti-Corruption

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  • Senators Introduce Combating Global Corruption Act of 2017

    Senator Ben Cardin and Republican co-sponsors recently introduced a bill titled the “Combating Global Corruption Act of 2017,” which seeks “to identify and combat corruption in countries, to establish a tiered system of countries with respect to levels of corruption by their governments and their efforts to combat such corruption, and to assess United States assistance to designated countries in order to advance anti-corruption efforts in those countries and better serve United States taxpayers.”

    This bill, if enacted, would require the Secretary of State to publish annual rankings of foreign countries split up into three tiers that depend on whether those countries’ governments comply with “minimum standards for the elimination of corruption.” The introduced bill defines corruption as “the exercise of public power for private gain, including by bribery, nepotism, fraud, or embezzlement.”

    Once a country’s tier-rank is established, the bill would then require the Secretary of State, Administrator of USAID, and the Secretary of Defense to take various steps, including the creation of a “corruption risk assessment” and “corruption mitigation strategy” for U.S. foreign assistance programs; fortified anti-corruption and clawback provisions in contracts, grants and other agreements; disclosure of beneficial ownership for contractors and other participants; and mechanisms to investigate misappropriated funds.

    If passed into law, this bill would create substantial new enforcement powers to combat international corruption activities. And, unlike the current ambiguity under the FCPA regarding its applicability to state-owned or state-controlled enterprises (“SOEs”), as drafted, this bill expressly would cover SOEs. Like the FCPA, however, this bill also contains a broad national security waiver component, if the Secretary of State “certifies to the appropriate congressional committees that such waiver is important to the national security interest of the United States.”

    FCPA Update Anti-Corruption FCPA Bribery Fraud

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  • DOJ’s Trevor McFadden Addresses Anti-Corruption, Export Controls and Sanctions Compliance Summit

    On April 18, Acting Principal Deputy Assistant Attorney General Trevor McFadden spoke at the 10th annual Anti-Corruption, Export Controls and Sanctions Compliance Summit in Washington, D.C. According to Mr. McFadden, the Justice Department “remains committed to enforcing the FCPA and to prosecuting fraud and corruption more generally.” He emphasized the importance of company cooperation, stating that that the department considers voluntary self-disclosures and remedial efforts when making charging decisions. Mr. McFadden also stated that the department is making a “concerted effort to move corporate investigations expeditiously,” adding that FCPA investigations should be “measured in months, not years.”

    Mr. McFadden also discussed an increased prioritization of anti-corruption prosecutions around the world and stated that the DOJ will “seek to reach global resolutions that apportion penalties between the relevant jurisdictions so that companies that want to accept responsibility for misconduct are not unfairly penalized by multiple agencies.”

    Additionally, the department is assessing its FCPA Pilot Program. Last year, as part of the Program, the department began publishing information on cases it declined to prosecute due to voluntary self-disclosure, full cooperation, and comprehensive remediation. Mr. McFadden stated that the Program is “one example of an effort to provide more transparency and consistency for our corporate resolutions” and “will continue in full force.”

    DOJ Anti-Corruption Export Controls Sanctions

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  • South Korea’s Former President, Park Geun-hye, Formally Indicted on Corruption Charges

    On April 17, former South Korean president Park Geun-hye was formally indicted on 18 charges of corruption including bribery, extortion, abuse of power, and leaking state secrets. Ms. Park was impeached in December after months of public protests. Last month, she was removed from office and arrested.

    The corruption scandal has also implicated Ms. Park’s longtime confidante, Choi Soon-sil, who is currently on trial on corruption charges. The pair is accused of coercing Korean businesses into donating $68 million to two non-profit foundations that Ms. Choi controlled. Ms. Park and Ms. Choi are also accused of collecting or demanding $52 million in bribes from businesses, including $38 million from Korean conglomerate Samsung, $6.2 million from the retail conglomerate Lotte, and $7.8 million from the telecommunications and semiconductor conglomerate SK. Shin Dong-bin, the chairman of Lotte, was indicted on bribery charges on Monday.

    FCPA Enforcement Action Anti-Corruption Bribery

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  • ING Under Investigation by Dutch and U.S. Authorities for Activities Relating to VimpelCom

    In an annual report filed with the SEC on March 20, 2017, ING Groep, N.V., a Netherlands-based financial services company, stated that it is under criminal investigation by Dutch authorities “regarding various requirements related to the on-boarding of clients, money laundering, and corrupt practices,” and that it has also received “related information requests” from U.S. authorities.  A spokesperson for the Dutch prosecutor reportedly expressed suspicion that ING failed to report irregular transactions and may have enabled international corruption, including unusual payments made by VimpelCom, the Russian telecom company, to a government official in Uzbekistan through a shell company.  VimpelCom settled bribery charges with the U.S. and Dutch governments in February 2016, admitting to paying bribes amounting over $114 million to an Uzbek official and agreeing to pay over $397 million in penalties to the DOJ and SEC for violations of the FCPA.  ING stated that it is cooperating with the ongoing investigations and requests of Dutch and U.S. authorities.

    SEC DOJ Anti-Money Laundering Anti-Corruption ING Groep N.V. Dutch Uzbekistan VimpelCom

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  • FBI Creates Dedicated International Corruption Squads

    On March 30, the Federal Bureau of Investigation (“FBI”) announced the establishment of three international corruption squads dedicated to investigating incidents of foreign bribery and kleptocracy-related criminal activity.  The squads, based in New York, Los Angeles, and Washington, D.C., will work closely with the DOJ’s Fraud Section and the SEC in investigating violations of the FCPA.   Special Agent George McEachern, who heads the International Corruption Unit at FBI Headquarters, stated that the squads were created to address the national and international implications of corruption. The establishment of these new dedicated corruption squads has been spurred, at least in part, by the rise in cooperation among regulatory and law enforcement authorities across the globe to investigate and prosecute foreign corruption. Indeed, the FBI press release noted the Bureau’s partnerships with overseas law enforcement agencies as well as its participation in international working groups such as the Foreign Bribery Task Force. The increased FBI attention is also notable in the context of the rising use of so-called “traditional” white-collar investigative techniques such as wiretaps and confidential informants in FCPA cases, including in the current PetroTiger prosecution and the DOJ’s failed Africa Sting case.

    Bribery Anti-Corruption

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  • FBI Creates Dedicated International Corruption Squads

    On March 30, the Federal Bureau of Investigation (“FBI”) announced the establishment of three international corruption squads dedicated to investigating incidents of foreign bribery and kleptocracy-related criminal activity.  The squads, based in New York, Los Angeles, and Washington, D.C., will work closely with the DOJ’s Fraud Section and the SEC in investigating violations of the FCPA.   Special Agent George McEachern, who heads the International Corruption Unit at FBI Headquarters, stated that the squads were created to address the national and international implications of corruption. The establishment of these new dedicated corruption squads has been spurred, at least in part, by the rise in cooperation among regulatory and law enforcement authorities across the globe to investigate and prosecute foreign corruption. Indeed, the FBI press release noted the Bureau’s partnerships with overseas law enforcement agencies as well as its participation in international working groups such as the Foreign Bribery Task Force. The increased FBI attention is also notable in the context of the rising use of so-called “traditional” white-collar investigative techniques such as wiretaps and confidential informants in FCPA cases, including in the current PetroTiger prosecution and the DOJ’s failed Africa Sting case.

    Bribery Anti-Corruption

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  • FBI Creates Dedicated International Corruption Squads

    On March 30, the Federal Bureau of Investigation (“FBI”) announced the establishment of three international corruption squads dedicated to investigating incidents of foreign bribery and kleptocracy-related criminal activity.  The squads, based in New York, Los Angeles, and Washington, D.C., will work closely with the DOJ’s Fraud Section and the SEC in investigating violations of the FCPA.   Special Agent George McEachern, who heads the International Corruption Unit at FBI Headquarters, stated that the squads were created to address the national and international implications of corruption.

    The establishment of these new dedicated corruption squads has been spurred, at least in part, by the rise in cooperation among regulatory and law enforcement authorities across the globe to investigate and prosecute foreign corruption. Indeed, the FBI press release noted the Bureau’s partnerships with overseas law enforcement agencies as well as its participation in international working groups such as the Foreign Bribery Task Force.

    The increased FBI attention is also notable in the context of the rising use of so-called “traditional” white-collar investigative techniques such as wiretaps and confidential informants in FCPA cases, including in the current PetroTiger prosecution and the DOJ’s failed Africa Sting case.

    DOJ SEC News Bribery Anti-Corruption

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