The Federal Corrupt Practices Act (“FCPA”) prohibits a U.S. company or person from bribing foreign government officials to obtain a business advantage. Along with this seemingly simple restriction comes accounting and record keeping requirements with which companies must comply. The FCPA requires the implementation of a compliance program which addresses FCPA concerns and establishes an FCPA corporate policy. This webinar covers the basics of the FCPA, including an introduction to the regulators, both the SEC and DOJ, and recent communications to the public regarding the FCPA from these regulatory bodies. The standards for a compliance program review is analyzed, including what makes a program current and effective as well as how often the program requires review. The role of a compliance coordinator is discussed, as is record keeping, training, and retaliation. Finally, meals and entertainment, gifts, travel, charitable contributions, and hiring are all discussed with reference to recent government actions and legal decisions. To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/foreign-corrupt-practices-act-compliance-2020/

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5. Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
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6. Meet the Faculty
MODERATOR:
Rafael X. Zahralddin - Elliott Greenleaf
PANELISTS:
Guillermo Christensen - Ice Miller LLP
Corey Lee - Hunton Andrews Kurth, LLP
Alex Gonzalez - New Jersey Resources Corporation
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7. About This Webinar –
Foreign Corrupt Practices Act Compliance
The Federal Corrupt Practices Act (―FCPA‖) prohibits a U.S. company or person from bribing
foreign government officials to obtain a business advantage. Along with this seemingly
simple restriction comes accounting and record keeping requirements with which companies
must comply. The FCPA requires the implementation of a compliance program which
addresses FCPA concerns and establishes an FCPA corporate policy. This webinar covers
the basics of the FCPA, including an introduction to the regulators, both the SEC and DOJ,
and recent communications to the public regarding the FCPA from these regulatory
bodies. The standards for a compliance program review is analyzed, including what makes a
program current and effective as well as how often the program requires review. The role of a
compliance coordinator is discussed, as is record keeping, training, and retaliation. Finally,
meals and entertainment, gifts, travel, charitable contributions, and hiring are all discussed
with reference to recent government actions and legal decisions.
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8. About This Series -
Corporate & Regulatory Compliance Boot Camp
This webinar series covers corporate and regulatory compliance as it relates to procurement
and government contracting, the Foreign Corrupt Practices Act, data privacy and social
media. The various episodes examine these topics from a company’s perspective, delving
into compliance issues that pertain to specific company practices across industries and
borders and impact companies of all sizes and types.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
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9. Episodes in this Series
#1: Procurement & Government Contracting Compliance
Premiere date: 8/12/20
#2: Foreign Corrupt Practices Act Compliance
Premiere date: 9/16/20
#3: Data Privacy Compliance
Premiere date: 10/14/20
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10. Episode #2
Foreign Corrupt Practices Act Compliance
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11. Foreign Corrupt Practices Act
Telia – The Sweden-based telecommunications provider agreed to pay $965 million in a
global settlement to resolve violations of the FCPA to win business in Uzbekistan. (9/21/17)
Halliburton – The company agreed to pay $29.2 million and a former vice president agreed to
pay a $75,000 penalty to settle charges related to payments made to a local company in
Angola in the course of winning lucrative oilfield services contracts. (7/27/17)
Michael L. Cohen and Vanja Baros – The former Och-Ziff executives were charged with being
the driving forces behind a far-reaching bribery scheme that paid tens of millions of dollars in
bribes to high-level government officials in Africa. (1/26/17) NOTE: Och-Ziff and other
executives settled charges in 2016.
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12. Foreign Corrupt Practices Act
Orthofix International – The Texas-based medical device company agreed to pay more than
$6 million to settle charges that its subsidiary in Brazil used high discounts and improper
payments to induce doctors under government employment to use Orthofix products.
(1/18/17)
SQM - Chilean-based chemical and mining company Sociedad Quimica y Minera de Chile
S.A. agreed to pay more than $30 million to resolve parallel civil and criminal cases finding
that it violated the FCPA by making improper payments to Chilean political figures and others.
(1/13/17)
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13. Foreign Corrupt Practices Act
Biomet - The Warsaw, Ind.-based medical device manufacturer agreed to pay more than $30
million to resolve SEC and Justice Department investigations into the company's anti-bribery
violations in Brazil and Mexico. (1/12/17)
Cadbury Limited/Mondelez International - The global snacking business agreed to pay a $13
million penalty for FCPA violations occurring after Mondelez (then Kraft Foods Inc.) acquired
Cadbury and its subsidiaries, including one in India that proceeded to make illicit payments to
obtain government licenses and approvals for a chocolate factory in Baddi. (1/6/17)
Source- https://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml
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14. Foreign Corrupt Practices Act
• U.S. businesses with foreign contacts
• Foreign subsidiaries of U.S. businesses
• Select foreign companies and individuals
• Catch-All - ―any person‖ who commits bribery on a U.S. Territory
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15. Issuers
• Issuers are defined as a publicly traded company with 500 or more shareholders and
more than $1 million in total assets
• Domestic Issuers are responsible for the acts of officers, employees, agents, and other
representatives
• Domestic Issuers are responsible for subsidiaries, even if they don’t have a 50%
ownership interest
• FCPA accounting and reporting requirements for Issuers
• Issuers have enhanced penalties for non-compliance
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16. Domestic Concerns
• Any business organized in the United States, U.S. citizen or resident
• Domestic Issuers are responsible for the acts of officers, employees, agents, and other
representatives
• Domestic Issuers are responsible for subsidiaries, even if they don’t have a 50%
ownership interest
• Domestic Concerns are subject to anti-bribery rules, but not reporting requirements
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17. Accounting and Record Keeping for Issuers
• Issuers must keep detailed records
• FCPA accounting provisions facilitate exposing illegal payments
• Records
 ―Accurately and Fairly‖ reflect all of the issuer’s transactions and assets
 ―Reasonable Detail‖
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18. Bribery of Foreign Officials
• Issuers, Domestic Concerns, and their agents or representatives are subject to the
FCPA’s anti-bribery rules
 U.S. nationals and businesses (including foreign subsidiaries) can not engage in
bribery of foreign officials
 Foreign nationals and businesses in the U.S. or it's territories can not engage in
bribery of foreign officials
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19. Business Scenarios with Elevated Risk
• Permitting / licensing
 E.g., payment to expedite a federal/regional/municipal/local permit to operate a certain
type of facility; payment to obtain environmental or construction permit without
conforming to all requirements
• Government contracts
 E.g., payment to win or extend a government contract or to gain an advantage in
negotiations with a government customer
• Public procurement
 E.g., payment to gain an advantage in a tender (disqualify another bidder, influence
tender specifications, obtain confidential tender information, etc.)
• Customs
 E.g., payment to avoid required registration; payment to avoid or lower duties
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20. Bribery - Foreign Officials
• Foreign Officials – intentionally broad definition
 Not limited to public officials in foreign governments
 Political parties, their officials, and all candidates for public office
 Employees of state-owned or state-controlled corporations (e.g. universities,
hospitals, utilities)
 Officers and employees of public international organizations (organizations whose
employees are treated the same as diplomats; e.g. World Bank, EBRD)
 Intermediaries officially acting on behalf of a foreign official
 Relatives or dependents of a foreign official
• Significant risk in many countries (e.g. China): an employee of a seemingly private
enterprise may be an ―official‖ under the FCPA
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21. Bribery - Improper Payments
• ―Payment‖ – not just money but anything of value
• Includes promises, offers, and the authority to make payments in addition to payments
that are completed
• Foreign official does not have to receive the benefit of the payment
• Can’t use a surrogate/intermediary – an indirect payment is a payment
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22. Level of Knowledge Required for Payments
• Payor doesn’t need to know that a payment is or may be improper
• ―Conscious disregard of suspicious circumstances‖
• ―Deliberate ignorance‖ of an illegal payment
• ―Corruptly‖ = intent ―to induce the recipient to misuse his official or to influence someone
else to do so.‖
• Voluntarily and with ―bad purpose‖ in order to ―obtain or retain business‖
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23. Allowable Payments
• Foreign officials requesting or suggesting the bribe does not sanitize the transaction or
reduce liability
• Extortion payments are not subject to liability under the FCPA
 Narrow exception, does not include economic coercion
• Payment made with conscious disregard of circumstances suggesting that a foreign
official will benefit from it likely violates the FCPA
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24. Allowable Payments
• Must be carefully exercised as there are narrow exceptions
 ―Expedite or to secure the performance of a routine governmental action‖ - ―Grease
payments‖ allowed for expediting non-discretionary actions by minor officials
 Payments explicitly allowed under the host country’s written laws
 Reasonable and bona fide expenditures that are directly related to promotion or
demonstration of products or the performance of a government contract are allowed
(payments designed to cover travel and lodging incurred by government officials as
part of normal business operations
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25. Key Risk Area - Third Parties
• Indirect payments are improper: e.g., through consultants, sales agents, customs
agents, distributors, contractors, lawyers, etc.
• Third parties play a role in the majority of all FCPA enforcement actions
• Ignorance is not bliss – companies must act upon third-party ―red flags.‖ E.g.:
• Red flags are not a violation but warrant further inquiry, particularly depending on the
third party’s role and the potential for improper activity
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1. Shell company / inadequate staff
2. Little experience or insufficient qualifications
in its line of work
3. Negative or questionable reputation in its
market
4. Uses bank accounts in off-shore havens or
unrelated countries
5. Bank accounts in off-shore havens or
unrelated countries
6. Vague language in invoices to describe its
services
7. An official requested the use of this third
party
8. Is owned by or related to an official

26. Key Risk Area - Improper Payment Types
• Travel and Hospitality
 E.g., airfare (esp. first-class), hotel stays, expenses, and/or high per-diems, particularly
in popular destinations or locations without a business nexus, or for family members even
where a business purpose exists
• Gifts and Entertainment
 E.g., extravagant gift-giving (luxury watches, shopping sprees, computer equipment,
etc.), expensive wine-and-dine, or multiple gifts of smaller value
• Charitable/political contributions
 E.g., donation to a charity associated with a government official’s relative or to a
political party, seeking for the official to exercise any authority or influence
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27. Enforcement
• SEC
 Civil suits and enforcement of FCPA’s accounting requirements
• DEPARTMENT OF JUSTICE
 Criminal prosecution
• Agencies work together through referrals and will work together on some cases
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28. Disgorgement (SEC Act of 1934) - Telia
• Telia Company AB's $965.6 million settlement September 2017 included disgorgement to
the SEC of $457 million, the biggest disgorgement ever ordered in an FCPA enforcement
action.
• Telia won't actually pay the SEC $457 million in disgorgement.
• About $40 million of the disgorgement will be satisfied by a forfeiture payment to the DOJ.
• Up to $208.5 million will be offset for any confiscation or forfeiture payment Telia makes to
Swedish or Dutch prosecutors.
• So from the total disgorgement of $457 million ordered by the SEC, subtract $40 million
for the DOJ forfeiture, and $208.5 million for the Dutch and Swedish payments.
• That leaves disgorgement actually payable to the SEC of $208.5 million, or half of the
ordered $457 million.
Source http://www.fcpablog.com/blog/2017/9/25/telia-also-tops-our-new-top-ten-disgorgements-list.html
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29. Prison Sentences and Yates Memo
Top Five Longest FCPA Related Prison Sentences:
1. Joel Esquenazi: 180 months (2011)
2. William Jefferson: 156 months (2009)
3. Charles Paul Edward Jumet: 87 months (2010)
4. Carlos Rodriguez: 84 months (2011)
5. Douglas Murphy: 63 months (2005)
Source - http://www.fcpablog.com/blog/2017/9/25/telia-also-tops-our-new-top-ten-
disgorgements-list.html
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30. Prison Sentences and Yates Memo
• Companies will have to turn over information on involved individuals in order to get
cooperation credit
• All investigations will start with a focus on individuals in a company
• Criminal and civil attorneys will work in lockstep on corporate cases, sharing information
freely
• Senior DOJ attorneys approve protection
• Individual actions have to be resolved or have a plan before corporate actions can be
resolved
• Civil actions will be pursued against culpable individuals, even if they can’t pay a
substantial fine
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31. Yates Memo Liability
• Corporations are responsible for the criminal acts of their employees
 Acting in apparent or actual scope of employment and
 Intends in part to benefit the company
 Even if the actions violate Corporate policy or express corporate order
 If the employee is guilty the company is guilty
• Corporation’s timely and voluntary disclosure is helpful
• Corporation’s remedial actions are helpful
• Corporate compliance, existence and effectiveness, also are evaluated
• Upjohn – Corporate Miranda
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32. Dodd-Frank Act – Private Referrals and
Whistleblower Protections
• Whistleblowers, including foreign nationals, can apply for monetary rewards based on
reporting bribery prohibited under the FCPA.
• The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that the
U.S. Securities Exchange Commission (SEC) pay whistleblowers monetary rewards (Ten to
thirty percent of the amount recovered) if they provide the U.S. government with information
that leads to the successful enforcement of the FCPA.
• The Act is applicable even if bribes are paid in a foreign country and the whistleblower is
a foreign national.
• Anonymity is protected and there are anti-retaliation provisions that provide protection for
employees who work in the United States
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33. Wildlife Crimes (Case Study on Concurrent Liability with Other
Federal and International Compliance)
• Wildlife trafficking and related wildlife crimes often involve FCPA violations.
• Example, if a publicly traded cargo company bribed an official at a Liberian port so that
the company could load ivory (or illegal timber, etc.) onto the ship without the official
interfering, this would be a violation of the FCPA.
• Whistleblowers worldwide can qualify for monetary rewards when reporting wildlife
trafficking, illegal logging and illegal fishing.
 The Lacey Act and the Endangered Species Act, direct the Fish and Wildlife
Service, the National Marine Fisheries Service and the Departments of Interior,
Commerce, Treasury and Agriculture to pay monetary rewards to persons who
disclose original information concerning wildlife crimes that results in a successful
enforcement action.
 Whistleblowers may also qualify for rewards under the Foreign Corrupt Practices
Act and the Act to Prevent Pollution from Ships/ Marpol Protocol.
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34. Penalties
• PUBLICLY TRADED COMPANIES
 Barred from doing business with government agencies or contractors
 Export licenses suspended or debarred from the Commodity Futures Trading
Commission
 FCPA can trigger other enforcement actions from a variety of agencies
• Willful violations can result in $25 million fines for accounting violations and $2 million for
a violation of anti-bribery provisions
• Civil penalties of up to $10,000 per violation
• Defense costs are substantial
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35. SEC FCPA Opinion Procedure
• Issuers and Domestic Concerns can obtain an opinion of the Attorney General as to
whether specific, prospective, not hypothetical, conduct on firm’s with the Department’s
present enforcement policy regarding the anti-bribery provisions of the FCPA. Response is
required by 30 days of the receipt of complete information in a request.
 Must be submitted in writing
 Actual and not hypothetical requirement does not require an executed contract
 Only applies to the applicant parties
 Requires
o Disclosure of all relevant and material information
o Authorized by the CEO and signed by a senior officer that has the operational
responsibility for the conduct under review
o The Justice Department can require the CEO of the applicant and any
subsidiaries to also attest to the truth of the submission
• Does not excuse the applicant from the accounting requirements.
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36. Penalties
• Accounting
 Willful violations by individuals can be up to $5 million and twenty years in prison for
each violation
• Anti-bribery
 Willful violations by individuals can be up to $100,000 and five years in prison for each
violation
• Civil penalties can be up to $10,000 per violation
• Corporations can not indemnify or pay any fines levied against their employees or agents
under the FCPA
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37. FCPA Compliance
• Any payments to foreign officials must be scrutinized or avoided
• Due diligence on foreign partners and surrogates is crucial (including continuous review of
books and records)
• Contracts must include FCPA compliance provisions, including that a violation is a
material breach
• Avoid cash payments (harder to track and reduce the ability to make transactions
transparent) and keep fees reasonable to avoid making transfers suspect
• Codes of conduct, education, reporting protocols, and careful screening of all employees,
especially those working abroad
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38. About the Faculty
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39. About The Faculty
Rafael X. Zahralddin - RXZA@elliottgreenleaf.com
Rafael X. Zahralddin-Aravena is a Shareholder, Director, and Chair of his firm’s Commercial
Bankruptcy and Restructuring Practice. He founded the Elliott Greenleaf Delaware office in
2007, which specializes in business law, as its first Managing Shareholder. He works as a
litigator and advises businesses on issues of compliance, corporate formation, corporate
governance, insolvency, distressed mergers and acquisition, commercial transactions, cyber
law, and international and cross border issues. He has been lead counsel in several
significant matters including serving as special litigation counsel in Washington Mutual, the
largest bank insolvency in U.S. history. In the Nortel bankruptcies he successfully secured a
settlement of more than $50 million for the permanently disabled former employees of the
company. The firm and Mr. Zahralddin were named among the firms that received multiple
awards in 2014, culminating in the Large Company Transaction of the Year Award from the
Turnaround Management Association for their work in the AgFeed USA, Inc. bankruptcy,
which involved the sale of the U.S. and China assets of a publicly traded company.
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40. Guillermo Christensen – guillermo.christensen@icemiller.com
Guillermo Christensen combines 30 years of international work as a CIA intelligence officer and an attorney
in the private sector to inform the advice he provides to clients on white collar/government investigations,
cybersecurity and national security. A partner in Ice Miller’s Washington DC office, Guillermo has conducted
sensitive investigations on FCPA, OFAC and export control matters for clients in high-risk jurisdictions —
spanning the Middle East, (Kurdistan/Iraq, Saudi Arabia, Kuwait, UAE, and Egypt); Latin America (Mexico,
Venezuela, Colombia, Ecuador, Argentina), Asia and Africa. Guillermo also conducts diligence of third
parties for clients, including several in Myanmar, Brunei, Malaysia, China, Chad, Angola, Nigeria. Drawing
on his public and private sector international experience, he provides market entry counseling to clients, and
designs and implements tailored compliance and ethics programs for small- to large public companies.
Guillermo returned to public service in 2010-2011 to serve as the Science and Technology Advisor to the
U.S. Mission to the OECD in Paris, France. He is a life member of the Council on Foreign Relations and
currently serves on the international advisory board of the Reeves Center at William and Mary. Born in
Argentina, Guillermo is active with the Hispanic community and is a 2016 Fellow of the Leadership Council
on Legal Diversity.
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About The Faculty

41. About The Faculty
Corey Lee – leec@hunton.com
Corey is a partner in the Miami office of Hunton Andrews Kurth LLP. Corey has experience
conducting internal investigations, including investigations related to the Foreign Corrupt
Practices Act (FCPA), theft of trade secrets, healthcare fraud, False Claims Act and
Racketeer Influenced and Corrupt Organizations Act (RICO). He generally works with
financial services, health care, consumer and retail companies. Corey also regularly assists
his clients with establishing FCPA compliance programs, and provides FCPA compliance
training to employees. Corey also has an active commercial litigation practice, litigating
matters arising from information security and data breach incidents, contract disputes, class
actions, business torts, securities litigation, product liability litigation, and electronic discovery.
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42. About The Faculty
Alex Gonzalez – AGonzalez@NJResources.com
Alex Gonzalez is Assistant General Counsel at New Jersey Resources Corporation, a publicly traded
energy company in its day-to-day operations including: transactions, M&A, securities, finance, information
technology, cybersecurity, compliance, investor relations, corporate communications and governance.
Prior to joining New Jersey Resources, Alex was an Associate at Dechert LLP and Pepper Hamilton LLP.
He clerked for the Honorable Eduardo C. Robreno on the Federal District Court for the Eastern District of
Pennsylvania and externed for the Honorable Dolores K. Sloviter on the United States Court of Appeals
for the Third Circuit.
Alex has received accolades and awards for his work in the legal profession and in the community,
including recognition as a Top Lawyer Under 40 by the Hispanic National Bar Association in 2020. Mr.
Gonzalez is a 2020 Lead New Jersey Fellow and an Alumni Steering Committee Member of the Rutgers
Center for Corporate Law and Governance. Alex received his J.D. from Rutgers School of Law, with
honors, in 2007, and his B.A. from Rutgers College in 2004.
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43. Questions or Comments?
If you have any questions about this webinar that you did not get to ask during the live
premiere, or if you are watching this webinar On Demand, please do not hesitate to email us
at info@financialpoise.com with any questions or comments you may have. Please include
the name of the webinar in your email and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
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44. About Financial Poise
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