FCPA Compliance and Ethics Blog

November 26, 2012

Beacon Events Compliance Conference in Beijing – I Wish I Could Be There

In the Sherlock Holmes story “The Final Problem” Conan Doyle tried to kill off his fictional detective by having him go over Reichenbach Falls in Switzerland locked in mortal combat with his arch nemesis Dr. Moriarty. However, readers of the Holmes’ short stories protested so much that Doyle had to resurrect him a short story entitled “The Adventure of the Empty House”. What do these stories have to do with compliance? I had been scheduled to chair and participate in the Advanced Anti-Corruption Compliance Strategies Summit being held in Beijing from 4th to 6th December, however as I have not been cleared yet to travel after my recent surgery I cannot do so. So unlike Holmes, I will not disappear, just be land-locked here in Houston.

To say I am disappointed that I cannot attend would be putting it mildly as it will be one of the top compliance-related conferences in the Far East for 2012. If you have not had the opportunity to attend a compliance-related conference tailored to the challenges of working in the Far East this would be the conference for you. Even if you have attended such an event, this conference focuses on China and will give you more insight into how to do business under a plethora of anti-corruption and anti-bribery laws, from the US Foreign Corrupt Practices Act (FCPA) to the UK Bribery Act and the recently enacted PRC China anti-bribery legislation.

The person who will take my slot as conference Chairperson is certainly not unfamiliar to coming off the bench. Indeed he is one of the top compliance counsels in the region, Eric Carlson, of the law firm of Covington and Burling LLP. In addition to practicing law, Eric is also a Contributing Editor to the FCPA Blog. In other words, this guy knows his compliance stuff. In addition to presenting my review of 2012 FCPA enforcement and lessons learned, Eric is also on tap to speak about the specific lessons which impact foreign companies operations in China. As a partner in the firm’s Beijing office, he is uniquely placed to do so.

So what are some of the subjects that will be covered? Consider these: 2012 – The FCPA year in review – what we have learned about best practices from the year’s enforcement actions; Official View: Current PRC focus and trends – commercial bribery enforcement; UK Bribery Act – Update on the UK Bribery Act and enforcement a year after implementation; Expert View on the Implications of Recent FCPA-Related Developments – Analyses of Recent Cases and Insights into Future US Government Enforcement Priorities That May Impact China Operations; Managing the multi-jurisdictional aspects of compliance in Asia when multiple parties are interested, plus an update on the new provincial / local laws in China, which could increase risks of debarment; Live examples of strong internal controls and compliance programs – Case studies of changes implemented in the past year to meet or exceed changing global and local regulatory expectations; Sustainable Compliance: Making the Case for Less is More; How to personalize a policy for your company, taking into consideration the specific challenges your employees really face on a day to day basis; Creating robust agreements with Third parties – how to ensure integrity and compliance without losing important partners; Robust due diligence and monitoring of suppliers to ensure a culture of integrity in your supply chain; Supply chain issues and non-governmental bribery – how much oversight is required over downstream parties like agents, intermediaries, distributors, retailers to avoid prosecution and reputation risk?; and a Dodd-Frank Whistleblower Update.

In addition to the above the first day of the conference is Workshop Day with two great workshops, one will focus on ‘Step by Step Guidance on Best Practice for Investigations’ and the second on how to ‘Update Your Compliance Plan and Effectively Assess and Manage Risk’ The second workshop is further broken down into two subparts: Part I: Quickly get up to speed with the latest anti-corruption developments to make sure your programs are defendable and Part II: Effective risk assessment, risk management and risk mitigation for bribery and fraud risk in China. The conference will also have special in-depth tracks for a more detailed exploration of subjects such as internal investigations and managing compliance in the mergers and acquisitions (M&A) context and in joint ventures (JV’s).

The topics will be among the most relevant and informative that you could ask for. They include FCPA prosecutions and enforcement actions, risk assessments and risk intelligence, dealing with facilitation payments, FPCA compliance training, and FCPA risk assessment in M&A work and in dealing with JV’s, auditing and compliance convergence. Simply put, the scope of the Beacon Events conference is as broad and far-ranging as you might ask for; nevertheless the focus is on the compliance practitioner and the business of doing compliance inside a corporation.

Bottom Line: This is one of the very best FCPA conferences that has ever been staged in Beijing. It will offer some of the most cutting edge best practices on a wide variety of issues that bedevil compliance practitioners on a day-to-day basis. This list of speaker is the most ‘A-List’ that has ever been seen at such an event in Beijing. You owe it to yourself to attend. I am just sorry that I cannot do so.

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For information on the Conference, click here. For readers of this blog, a discount is offered by Beacon Events. You can receive the discount by entering the online discount code: AC678TFL15. You can also use this discount code if you register directly with Beacon Events.

 This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

New Charges for News Corp: Are FCPA Charges Just Around the Corner?

When you have eliminated the impossible, whatever remains, however improbable, must be the truth.

~ Sherlock Holmes in The Sign of the Four by Arthur Conan Doyle

Last Wednesday was the 125th anniversary of the first appearance of the world’s greatest consulting detective – Sherlock Holmes when the first Holmes novel, A Study in Scarlet, appeared in Beeton’s Christmas Annual in 1887. This week we will celebrate one of my favorite works of fiction, while trying to draw some compliance parallels, under both the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. We begin with The Sign of the Four because it is the one novel by Arthur Conan Doyle which has everything: swirling fog, a lost treasure, a chase, Holmes’ cocaine use and a damsel in distress. It is also the novel in which Holmes’ companion Dr. John Watson meets his bride Miss Mary Morstan. olhh

Much like The Sign of Four, the News Corp matter would seem to have everything. Last week charges were brought against Rebekah Brooks, who ran Murdoch’s newspaper holdings in Britain, Andy Coulson, former editor of the now defunct News of the World, and two other former News International employees. According to a Press Release from the Crown Prosecution Services (CPS), “We have concluded, following a careful review of the evidence, that Bettina Jordan-Barber, John Kay and Rebekah Brooks should be charged with a conspiracy to commit misconduct in public office between 1 January 2004 and 31 January 2012. This conspiracy relates to information allegedly provided by Bettina Jordan-Barber for payment, which formed the basis of a series of news stories published by The Sun. It is alleged that approximately £100,000 was paid to Bettina Jordan-Barber (a Ministry of Defence [MOD] employee) between 2004 and 2011.”

Dan Sabbagh, in a Guardian article entitled “Rebekah Brooks and Andy Coulson charges set new context for Leveson”, noted that “Significantly, the CPS said that the charges against the two for alleged misconduct in a public office cover the period between 2004 and as recently as 2011 – when payments to MoD official Bettina Jordan-Barber totalling about £100,000 are alleged to have been made.” This means that the payments lasted beyond the date that was alleged to have been for the phone-hacking scandal, “Hacking charges laid by the CPS against Brooks, Coulson and others range from October 2000 to August 2006, before the younger (James) Murdoch arrived at Wapping.” These payments to Jordan-Barbara were alleged to be in excess of ₤100,000.

These charges may mean significantly more international legal problems for News Corp, specifically regarding liability under the FCPA. Ed Pilkington and Dominic Rushe, also writing in the Guardian in an article entitled “News Corp exposed to growing legal threat following charges for tabloid duo”, quoted Professor Mike Koehler (the “FCPA Professor”) who said “the charges would be hard for the Department of Justice and the Securities and Exchange Commission to ignore [regarding a violation of the US FCPA]. We have been hearing allegations for a year and a half now, now we clearly have charges against high ranking officials at a foreign subsidiary.”

So how might Brooks and Coulson be liable under the FCPA? The recently released US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) “A Resource Guide to the U.S. Foreign Corrupt Practices Act” explains that an individual may be liable for conspiracy to violate the FCPA without having committed a substantive FCPA violation.

Under US law, individuals or companies that aid or abet a crime, including a FCPA violation, are as guilty as if they had directly committed the offense themselves. The aiding and abetting statute provides that whoever “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission,” or “will­fully causes an act to be done which if directly performed by him or another would be an offense against the United States,” is punishable as a principal. Aiding and abetting is not an independent crime, and the government must prove that an underlying FCPA violation was committed.

Both individuals, who are foreign nations and companies, may also be liable for conspiring to violate the FCPA, i.e., for agreeing to commit an FCPA violation, even if they are not, or could not be, indepen­dently charged with a substantive FCPA violation. So both a foreign national such as Brooks and Coulson could be convicted of conspiring with a domestic concern to violate the FCPA. Under certain circumstances, they could also be held liable for the domestic concern’s substantive FCPA violations under Pinkerton v. United States, which imposes liability on a defendant for reasonably foreseeable crimes committed by a co-conspirator in furtherance of a conspiracy that the defendant joined.

A foreign individual may be held liable for aiding and abetting a FCPA violation or for conspiring to violate the FCPA, even if the foreign company or indi­vidual did not take any act in furtherance of the corrupt payment while in the territory of the US. In con­spiracy cases, the US generally has jurisdiction over all the conspirators where at least one conspirator is an issuer, such as the US Corporation News Corp, who commits a reasonably fore­seeable overt act within the US. For example, if a foreign company or individual conspires to violate the FCPA with someone who commits an overt act within the US, the US can prosecute the foreign company or individual for the conspiracy. The same prin­ciple applies to aiding and abetting violations. For instance, even though they took no action in the US, Japanese and European companies were charged with con­spiring with and aiding and abetting a domestic concern’s FCPA violations.

Pilkington and Rushe predicted that “the new charges will increase pressure on the company. They cited a further quote from the FCPA Professor “This latest news is an escalation of the FCPA case.” Further, he told them that “US authorities would be looking to see how high up the chain of command the bribery scandal reached. The question will be what did James know and when did he know it.”

Even more ominously for News Corp, Pilkington and Rushe reported that “This week the Daily Beast alleged that the Murdoch tabloids the Sun and the New York Post may have made payments to a US official on American soil in order to obtain a photo of a captive Saddam Hussein, the deposed Iraqi leader, in his underwear. News Corporation has denied the claims.”

Where does this leave News Corp? It may be in quite a precarious position now. First there are the two high ranking former News Corp employees charged with conspiracy to commit bribery of a UK government official. Brooks was the former Sun editor and later ran the Murdoch’s holdings in the UK. Coulson was the former editor of the now defunct News of the World and later Director of Communications for UK Prime Minister David Cameron. As stated by the FCPA Professor in the article, what about the knowledge of James Murdoch? While the phone hacking charges may have occurred before he was involved in News Corp’s UK operations, the dates of the alleged payments may certainly impact him as well. All we can say with certainty is…watch this space.

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I will be discussing the recently released FCPA Guidance next Tuesday afternoon in a webinar, hosted by World Compliance. The event will be held at 2 PM CST. Details and registration can be found here. I hope that you can attend.

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This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

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