For the last twenty years, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have aggressively enforced the Foreign Corrupt Practices Act (FCPA) against domestic and foreign companies and their executives and agents. Corporate FCPA resolutions for bribery offenses involving foreign officials and related accounting violations have reached billions of dollars for single companies, and executives and agents have been sent to jail for years. More recently, these agencies have intensified their enforcement efforts, leveraging sophisticated investigative tools, expanded resources, and cross-border cooperation to combat corruption on a global scale. During the Biden Administration, the White House designated corruption as a national security priority, and Congress passed the Foreign Extortion Prevention Act (FEPA) which allows the DOJ to prosecute in the U.S. foreign officials who demand or receive bribes from U.S. companies or the issuers of securities in the U.S.
DOJ Enforcement
The DOJ leads the criminal enforcement of the FCPA, focusing on prosecuting companies and individuals involved in criminal bribery and corruption schemes. The Criminal Division’s Fraud Section, particularly its FCPA Unit, spearheads these efforts, often coordinating with local U.S. Attorney’s Offices. In its enforcement strategy, the DOJ relies on extensive international cooperation, whistleblower tips, and corporate self-disclosures to uncover and prosecute misconduct. Resolutions often involve significant financial penalties, compliance monitorships, and cooperation agreements.
SEC Enforcement
The SEC civilly enforces the FCPA’s anti-bribery and related accounting control provisions, targeting companies that issue securities in the U.S. and their employees, executives, and agents. Its enforcement actions often focus on deficient internal controls that enable bribery or the falsification of books and records to conceal illicit payments. The SEC pursues civil remedies, including the disgorgement of ill-gotten gains, other monetary penalties, and injunctive relief.
Joint Enforcement and Collaboration
Coordination between the DOJ and the SEC has become a hallmark of FCPA enforcement. Although these agencies conduct their own independent investigations, they typically coordinate with company counsel to align their investigations, for example by receiving parallel disclosures of evidence and by coordinating resolutions to avoid unfairly duplicate penalties. Coordination with foreign government enforcement agencies has also become increasingly common, with U.S. authorities communicating regularly with some governments to investigate and prosecute corruption cases spanning multiple jurisdictions.
Key Trends in FCPA Enforcement
- Increased Resources and Expertise: Both the DOJ and SEC have dedicated significant resources to FCPA enforcement, including specialized teams with deep expertise in anti-corruption law and investigations. The Federal Bureau of Investigation (FBI) also has allocated significant resources specifically to FCPA enforcement.
- Emphasis on Corporate Accountability: These enforcement agencies increasingly demand that companies demonstrate or develop robust compliance programs as part of resolutions, emphasizing the importance of preventing violations before they occur or detecting and addressing them when they occur.
- Whistleblower Incentives: The DOJ and the SEC have developed programs that offer financial rewards for reporting violations. The SEC’s Office of the Whistleblower has seen a surge in tips and disclosures since its implementation in 2011 in the aftermath of the financial crisis.
- Cross-Border Coordination: Coordination and cooperation with foreign enforcement authorities has resulted in significant, global settlements and enhanced the effectiveness of enforcement actions.
Navigating FCPA Risks
Businesses operating internationally face elevated FCPA risk and therefore face an elevated risk of enforcement scrutiny, requiring proactive measures to ensure compliance and mitigate potential liabilities. Skilled and experienced counsel is essential to navigating the complexities of FCPA investigations and enforcement actions. Tim Treanor is nationally and globally recognized for his leadership in anti-corruption and FCPA enforcement. Over the years, he has represented numerous individuals and entities in FCPA matters and negotiated numerous significant enforcement resolutions. With a deep understanding of the DOJ’s and SEC’s enforcement priorities, Tim offers strategic guidance and representation to clients seeking to address FCPA risks and to respond to government investigations effectively.