FCPA Compliance and Ethics Blog

December 19, 2013

Letter from China-Interview with Amy Sommers

Filed under: Amy Sommers,Corruption in China — tfoxlaw @ 12:01 am

Amy SommersEd. Note-this article is one of a continuing series of interviews of thought leaders in FCPA, Bribery Act and anti-corruption/anti-bribery. In this blog post, I interview Amy Sommers, partner in the Shanghai office of K&L Gates, an international law firm.

1.                Where did you go to university and what experiences there led to your current profession?

For both undergraduate and law school I attended the University of Washington. Geographically, Seattle’s proximity to East Asia has influenced the UW in a number of ways. Among the influences has been a history of strong research and teaching emphasis across a range of disciplines regarding China. The law school had, and still has, an excellent East Asian Law Program and I was fortunate to study with some very good professors, which provided me a solid grounding to pursue my interest in a China-focused legal career.

2.                You began your academic study of the Chinese language in college. What led to your interest in this language?

Shortly after China and the United States had resumed formal diplomatic relations, I entered college and growing up in Seattle, China was high on the radar screen for local news coverage. For example, Seattle was the last city Deng Xiaoping visited on his 1979 tour of the United States, so there were lots of stories in the news speculating about what was going to happen in China and with China. Boeing was then a major employer in the Pacific Northwest and an early beneficiary of China’s opening up, so it seemed apparent that these political and foreign relations changes were going to have some sort of implications in the coming decades. I was interested in foreign languages and also wanted to study law; it occurred to me that if China was in fact going to open up to the West, there would be need for US lawyers who knew about China. So, that was the operating assumption with which I proceeded in my major with the Jackson School of International Studies and later, law school and in my work as a corporate lawyer.

3.                What caused you to move professionally to China for your practice?

I was working in Seattle and about 30% of my practice had a Greater China nexus, but by 2003, the economic restructuring and investments China had been actively making in the prior decade were starting to really pay off. To me it seemed akin to the excitement that had been present on the US West Coast during the 1990’s ecommerce transformation and I felt that I wanted to be at the epicenter, doing this work full time. So, I persuaded my family to take the plunge, and my husband, our two then-small sons (ages 8 and 3) and I moved to Shanghai.

4.                You have worked in China for 10 years as an attorney. What changes have you seen over the years in the practice of law by Western firms?

In the early days of China’s reform, the distinguishing feature for Western law firms was whether they had an office in China. For many years, foreign law firms could have only one, so having two (say one in Beijing and one in Shanghai) wasn’t even an option. Firms prided themselves on simply having a presence here and a lot of their work focused on registering representative offices or forming joint ventures for foreign companies.

Today, the world has changed. Foreign-invested companies often have in-house counsel based in China, many of whom were educated here and who are deeply knowledgeable about the offerings not only of foreign law firms, but also domestic PRC firms. They’re informed consumers of legal services, and law firms now must demonstrate expertise in specialized areas — simply being a ‘China lawyer’ isn’t sufficient. Moreover, whereas China was originally largely a ‘workshop’ for products produced to be exported from China, in the last decade, the play has changed to China-as-the-market, with companies seeking to make increasingly sophisticated investments to position them to distribute products and services within China. Chinese law has been changing and maturing to reflect the economy’s development and transformation.  Chinese law firms have grown in the sophistication of their offering as well, so you have a trifecta of a more complex market, clients wanting to do more challenging and ambitious projects and lots more competition from Western and domestic firms.  It’s fascinating and I feel incredibly fortunate to be here working with such talented and capable people.

5.         I have opined that the GSK anti-corruption enforcement matter in China will be a game changer in international anti-corruption/anti-bribery enforcement. From your perspective, what do you believe it portends, if anything?

Yes, when you and I did a panel on China’s enforcement action against GSK for the Society of Corporate Compliance & Ethics’ National Conference in Washington in October, I was very interested to hear the perspective of you as someone deeply knowledgeable about anti-corruption compliance and who is viewing events from outside of China.

Prior to 2013, then I spoke to Western audiences about anti-corruption enforcement risks and mentioned the importance of China’s commercial bribery enforcement as a risk factor in its own right, as well as a potential catalyst for broader enforcement, the message did not seem to resonate. With the booming echo of the DOJ’s and SEC’s active FCPA enforcement efforts in the past 8 years ringing in their ears, it’s perhaps understandable that that message was drowned out. As we approach the end of 2013, I think your characterization of China’s action as a game-changer is on the money.  Today companies are evaluating China-initiated enforcement as a factor to be considered in their compliance efforts.

China’s initiation of this case has been a success for China on various levels, so there’s no question that there will be others brought.  The industry that the Chinese government has said publicly that it intends to tackle next is medical devices, but we should not assume that that will be the end of the journey.  Moreover, the question that is still unanswered is whether other jurisdictions in Asia Pacific will elect to emulate China’s example. Some news sources have reported that Asia Pacific-based regulators have expressed that intention, so I suspect they will: going after alleged corruption in the interests of protecting consumers is a desirable aim.  So, while for the moment companies seem to focusing on getting their China compliance house in order, it might be advisable to broaden that effort to other locales in Asia where there is a combination of strong economic growth and relatively high perceived corruption risk.

Amy Sommers can be reached via email at amy.sommers@klgates.com.

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, 2013

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