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Foreign Corrupt Practices Act & Anti-Corruption
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  • SFO Announces Charges Against Barclays and Four Former Executives in Qatar Capital Raising Matter

    On Tuesday, June 20, the UK Serious Fraud Office (“SFO”) announced charges against Barclays Plc and four former executives for conspiracy to commit fraud and provision of unlawful financial assistance in violation of the Companies Act 1985. These charges relate to Barclay Plc’s capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd in June and October 2008, as well as to a $3 billion loan facility made available to the State of Qatar acting through the Ministry of Economy and Finance in November 2008. According to the SFO press release, the investigation was first announced in 2012, and the individuals charged include a former Chief Executive Officer of Barclay Plc, a former Executive Chairman of Barclay Capital Investment Banking and Investment Management in Middle East and North Africa, a former Chief Executive of Barclay Wealth and Investment Management, and a former European Head of Barclay Plc’s Financial Institutions Group.

    While no US-based charges have been announced, the SFO’s announcement comes on the heels of Barclays Plc’s March 2017 disclosure to the SEC in which the company stated that “the DOJ and SEC are undertaking an investigation into whether the Group’s relationships with third parties who assist Barclays Plc to win or retain business are compliant with the U.S. Foreign Corrupt Practices Act.”

    SEC UK Serious Fraud Office Barclays Fraud Qatar Holding Challenger Universal

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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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  • Four Businessmen and Two Mexican Government Officials Plead Guilty in Aircraft Maintenance Bribery Scheme

    On December 27, the DOJ announced the unsealing of charges against four businessman and two Mexican officials involved in a scheme to secure aircraft maintenance and repair contracts with Mexican government-owned companies. Douglas Ray, Victor Hugo Valdez Pinon, Kamta Ramnarine, and Daniel Perez all pleaded guilty to conspiracy to violate the FCPA, with Ray and Valdez Pinon separately pleading guilty to conspiracy to commit wire fraud. Additionally, Ernesto Hernandez Montemayor and Ramiro Ascencio Nevarez, both former officials with Mexican state-owned companies, each pleaded guilty to one count of conspiracy to commit money laundering.

    According to the DOJ, the defendants admitted that between 2006 and 2016, millions of dollars were paid to numerous Mexican government officials to secure aircraft parts and servicing contracts with Mexican government-owned companies. The defendants also admitted to laundering the proceeds of the bribery scheme. In total, Ray, Valdez Pinon, Ramnarine, and Perez paid more than $2 million in bribes to Mexican officials, including Hernandez Montemayor and Nevarez.

    Navarez was sentenced in May to 15 months in prison; the remaining defendants have yet to be sentenced.

    DOJ FCPA Fraud Anti-Money Laundering

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