Foreign Corrupt Practices Act (FCPA)

Corporations creating or expanding their global footprints depend on BakerHostetler to manage sensitive issues stemming from overseas operations that could create exposure for the companies and their employees under U.S. law.

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) continue to focus on enforcement of the Foreign Corrupt Practices Act (FCPA), making compliance more important than ever. U.S. companies and their foreign subsidiaries face significant risk due to recent enactment of similar anticorruption laws by foreign countries, strengthened export control laws and heightened scrutiny of cross-border transactions.

Our FCPA team members draw upon their significant experience to help companies manage risk. We partner with clients to conduct assessments of their internal controls, develop workable risk management processes, implement effective "best practices" compliance programs and proactively spot and investigate possible instances of illegal conduct. We also vigorously and creatively defend our clients in enforcement proceedings should such proceedings arise.

Our attorneys are key members of project teams helping clients defend against and avoid FCPA liability.

Our clients benefit from:

  • Our strong relationships within the DOJ and the SEC.
  • Our relationships with the Serious Fraud Office, the United Nations and other foreign regulators.
  • The firm’s track record of reaching successful resolutions to complex investigations.
  • The insight of former top DOJ prosecutors, veteran civil trial attorneys, former enforcement officials from various federal agencies, from the Department of Energy to the SEC and the National Association of Securities Dealers (now the Financial Industry Regulatory Authority).

The team works closely with our international trade practice, which has significant experience with U.S. export control laws and regulations, anti-boycott regulations and related compliance issues. With complementary strengths in technology transactions and antitrust, the team helps clients navigate all aspects of doing business internationally.

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Compliance and Audit Programs

When dealing with FCPA issues, we typically take the “ounce of prevention” approach. Our FCPA team advises clients on the design and implementation of FCPA compliance and internal audit programs. We work with general counsels and compliance officers to customize policies and processes that enhance a company’s risk management efforts while minimizing operational disruption. Our guidance is comprehensive: evaluating current processes, developing training programs, drafting compliance certification materials and providing ongoing maintenance/adjustment of policies as the company matures.

International Business Transactions

We represent corporate clients of all sizes on business transactions in more than 100 countries. Every year, our lawyers handle billions of dollars in business combinations and financing transactions having global components. We understand both the art of the deal and the special international considerations involved, including FCPA compliance.

We work with clients at every phase of the transaction, ensuring that the deal structure and all contractual agreements are in compliance with FCPA regulations. We also advise companies on engaging foreign consultants and agents, and we frequently help clients perform due diligence with potential international joint venture partners.

If necessary, we represent clients in seeking advisory opinions from the DOJ when the transaction terms or a target company’s compliance track record could pose a potential challenge.

Our attorneys also counsel companies after an international transaction, ensuring that compliance policies and procedures continue to be followed by the resulting entity.

Conducting Internal Investigations - Home and Abroad

Few firms have BakerHostetler’s level of experience advising clients on internal investigations both domestic and international in Brazil, France, India, Panama, Switzerland, England and Russia. We also possess strong knowledge of forensic investigative techniques that may be used during internal corporate investigations.

Our attorneys partner with general counsel, internal and independent auditors, forensic accountants, foreign counsel, and outside investigators as necessary to identify breaches in a company’s international operations and potential areas of exposure. Along the way, the team conducts thorough interviews with all relevant parties, evaluates existing compliance programs, tests control systems and processes, reviews crucial corporate documents and determines the likelihood that enforcement proceedings will commence. We emphasize the importance of electronic discovery and document retention issues at this stage and we provide well-supported, thorough reports to management and directors, ensuring they are fully versed on the findings, as well as potential next steps.

Monitorships, Examinerships and Receiverships

As an increasing number of financial institutions and public corporations become associated with terms such as injunction and indictment, the most secure and cost-effective, way to conduct business is to prevent offending conduct before it happens through Compliance and Monitorships.

While many federal monitors have been named by the DOJ since the program’s inception in 1994, few firms have been appointed by the government multiple times. BakerHostetler has been appointed by the government several times – for Merrill Lynch, the Bank of New York, Mellon Bank and Local 14. Our team brings a recognized reputation for integrity, thorough analysis, and sound judgment, giving us unique insight into business operations, compliance procedures and crisis response. We put that knowledge to use when counseling other companies faced with similar circumstances. BakerHostetler provides more than just counsel to defend clients: we see beyond the horizon to help clients minimize the legal, economic and reputation risks these issues pose.

When companies recognize a potential area of exposure, we can step in to conduct risk assessment, counsel board members and executives on decision-making and recommend voluntary action such as development of internal monitorship programs. Our attorneys are routinely engaged to provide counsel on and have served as government-appointed monitors and examiners of financial institutions and other entities. They have designed and implemented compliance programs, advised on preventive measures and guided clients through the collateral consequences of government proceedings. We regularly conduct internal investigations on behalf of corporate boards, audit committees and special committees, and provide legal and tactical advice to those entities in response to the findings of such investigations.

Simply put, we understand the government's inquiry process and know how to manage the resources and complexities of major investigations. We work to keep our clients out of the headlines and in compliance with today's regulatory and statutory requirements.

Representing Clients in Enforcement Proceedings

When an action by the SEC or DOJ is likely, we prepare our clients for the proceedings and work with them every step of the way. Our considerable experience within the government sector affords us a high level of familiarity with the enforcement process. We often can negotiate the terms of the investigation with regulatory officials, helping to more accurately focus its scope and the company’s requirements. Our team of experienced trial attorneys vigorously advocates for our clients during settlement proceedings, and we represent clients during any government prosecution, civil suit, or private litigation that stems from the FCPA action.

Select Experience

  • Retained by small arms manufacturer to provide external FCPA counsel and support on day-to-day basis.
  • Represented a market-leading energy company when the due diligence surrounding an anticipated acquisition brought concerns of possible FCPA violations committed by a former foreign agent of a successor entity. We verified the integrity of the client’s operations and made recommendations to enhance the company’s controls as the transaction moved forward.
  • Represented a multi-national company in an acquisition of foreign subsidiaries with pre-existing FCPA violations. In addition to advice concerning the legal ramifications of the transaction, the team investigated and analyzed the economic impact of improperly obtained contracts on the current and future financial performance of the acquired subsidiaries.
  • Conducted an investigation involving a major financial services institution concerning poor accounting practices for expenditures relating to overseas sponsorships.
  • Advised a Swiss-based manufacturer on FCPA risks associated with a contemplated initial public offering in the U.S., in light of the Company’s past history of making improper payments to government agents.
  • Advised a private aviation services provider on the risks attendant to maintaining a subsidiary and doing business in India.
  • Advised a major American energy company regarding the FCPA risks and requirements associated with doing business with the Nigerian National Petroleum Corporation.
  • Advised a U.S.-based hedge fund in connection with FCPA issues in Central Asia.
  • Advised a U.S. bus manufacturer on avoiding FCPA problems in business transactions with Angola and other oil-producing nations.
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Experience

  • Retained by small arms manufacturer to provide external FCPA counsel and support on day-to-day basis.
  • Represented a market-leading energy company when the due diligence surrounding an anticipated acquisition brought concerns of possible FCPA violations committed by a former foreign agent of a successor entity. We verified the integrity of the client’s operations and made recommendations to enhance the company’s controls as the transaction moved forward.
  • Represented a multi-national company in an acquisition of foreign subsidiaries with pre-existing FCPA violations. In addition to advice concerning the legal ramifications of the transaction, the team investigated and analyzed the economic impact of improperly obtained contracts on the current and future financial performance of the acquired subsidiaries.
  • Conducted an investigation involving a major financial services institution concerning poor accounting practices for expenditures relating to overseas sponsorships.
  • Advised a Swiss-based manufacturer on FCPA risks associated with a contemplated initial public offering in the U.S., in light of the Company’s past history of making improper payments to government agents.
  • Advised a private aviation services provider on the risks attendant to maintaining a subsidiary and doing business in India.
  • Advised a major American energy company regarding the FCPA risks and requirements associated with doing business with the Nigerian National Petroleum Corporation.
  • Advised a U.S.-based hedge fund in connection with FCPA issues in Central Asia.
  • Advised a U.S. bus manufacturer on avoiding FCPA problems in business transactions with Angola and other oil-producing nations.
  • Assisted commercial and institutional clients on FCPA and anti-bribery compliance, risk assessment, and due diligence.

Recognition

  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)

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