The Foreign Corrupt Practices Act THE FOREIGN CORRUPT PRACTICES ACT: 15 U.S.C. §§ 78dd-1, 78dd-2, 78dd-3, 78m, 78ff 15 US.C. § 78dd-1 [Section 30A of the Securities Exchange Act of 1934] Prohibited foreign trade practices by issuers (a) Prohibition Tt shall be unlawful for any issuer which has a class of securities regis- tered pursuant to section 78] of this title or which is required to file reports under section 780(d) of this title, or for any officer, director, employee, or agent of such issuer or any stockholder thereof acting on behalf of such issuer, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to— (1) any foreign official for purposes of— (A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or (B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person; (2) any foreign political party or official thereof or any candidate for foreign political office for purposes of — (A) (i) influencing any act or decision of such party, official, or candi- date in its or his official capacity, (ii) inducing such party, official, or candidate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advan- tage; or (B) inducing such party, official, or candidate to use its or his influ- ence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person; or (3) any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of — (A) (i) influencing any act or decision of such foreign official, politi- cal party, party official, or candidate in his or its official capacity, (ii) inducing such foreign ofhcial, political party, party official, or candi- date to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or (B) inducing such foreign official, political party, party official, or HOUSE_OVERSIGHT_022594

93 candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person. (b) Exception for routine governmental action Subsections (a) and (g) of this section shall not apply to any facilitat- ing or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the perfor- mance of a routine governmental action by a foreign official, political party, or party official. (c) Affirmative defenses It shall be an affirmative defense to actions under subsection (a) or (g) of this section that— (1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official's, political party’s, party official's, or candidate’s country; or (2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to— A) the promotion, demonstration, or explanation of products or ser- vices; or B) the execution or performance of a contract with a foreign govern- ment or agency thereof. d) Guidelines by Attorney General Not later than one year after August 23, 1988, the Attorney General, after consultation with the Commission, the Secretary of Commerce, the United States Trade Representative, the Secretary of State, and the Secretary of the Treasury, and after obtaining the views of all interested. persons through public notice and comment procedures, shall deter- mine to what extent compliance with this section would be enhanced and the business community would be assisted by further clarification of the preceding provisions of this section and may, based on such determi- nation and to the extent necessary and appropriate, issue— (1) guidelines describing specific types of conduct, associated with common types of export sales arrangements and business contracts, which for purposes of the Department of Justice’s present enforce- ment policy, the Attorney General determines would be in confor- mance with the preceding provisions of this section; and (2) general precautionary procedures which issuers may use on a vol- untary basis to conform their conduct to the Department of Justice’s present enforcement policy regarding the preceding provisions of this section. The Attorney General shall issue the guidelines and procedures referred to in the preceding sentence in accordance with the provisions of subchapter H of chapter 5 of Title 5 and those guidelines and proce- dures shall be subject to the provisions of chapter 7 of that title. (e) Opinions of Attorney General (1) The Attorney General, after consultation with appropriate depart- ments and agencies of the United States and after obtaining the views of all interested persons through public notice and comment pro- cedures, shall establish a procedure to provide responses to specific inquiries by issuers concerning conformance of their conduct with the Department of Justice’s present enforcement policy regarding the pre- ceding provisions of this section. The Attorney General shall, within 30 days after receiving such a request, issue an opinion in response to that request. The opinion shall state whether or not certain speci- fied prospective conduct would, for purposes of the Department of Justice’s present enforcement policy, violate the preceding provisions of this section. Additional requests for opinions may be filed with the Attorney General regarding other specified prospective conduct that is beyond the scope of conduct specified in previous requests. In any action brought under the applicable provisions of this section, there shall be a rebuttable presumption that conduct, which is specified in a request by an issuer and for which the Attorney General has issued an opinion that such conduct is in conformity with the Department of Justice’s present enforcement policy, is in compliance with the preced- ing provisions of this section. Such a presumption may be rebutted by a preponderance of the evidence. In considering the presumption for purposes of this paragraph, a court shall weight all relevant factors, including but not limited to whether the information submitted to the Attorney General was accurate and complete and whether it was within the scope of the conduct specified in any request received by the Attorney General. The Attorney General shall establish the pro- cedure required by this paragraph in accordance with the provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be subject to the provisions of chapter 7 of that title. (2) Any document or other material which is provided to, received by, or prepared in the Department of Justice or any other department or agency of the United States in connection with a request by an issuer under the procedure established under paragraph (1), shall be exempt from disclosure under section 552 of Title 5 and shall not, except with the consent of the issuer, be made publicly available, regardless of whether the Attorney General responds to such a request or the issuer withdraws such request before receiving a response. (3) Any issuer who has made a request to the Attorney General under paragraph (1) may withdraw such request prior to the time the Attorney General issues an opinion in response to such request. Any request so withdrawn shall have no force or effect. (4) The Attorney General shall, to the maximum extent practicable, provide timely guidance concerning the Department of Justice’s HOUSE_OVERSIGHT_022595

present enforcement policy with respect to the preceding provi- sions of this section to potential exporters and small businesses that are unable to obtain specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to responses to requests under paragraph (1) concerning conformity of specified prospective conduct with the Department of Justice’s present enforcement policy regarding the preceding provisions of this section and general explana- tions of compliance responsibilities and of potential liabilities under the preceding provisions of this section. (f) Definitions For purposes of this section: (1)(A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person act- ing in an ofhcial capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization. (B) For purposes of subparagraph (A), the term “public international organization” means— (i) an organization that is designated by Executive Order pursuant to section 1 of the International Organizations Immunities Act (22 US.C. § 288); or (ii) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register. 2) (A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if— i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially cer- tain to occur; or ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur. B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware ofa high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist. 3)(A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign official in— i) obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country; ii) processing governmental papers, such as visas and work orders; iii) providing police protection, mail pick-up and delivery, or sched- uling inspections associated with contract performance or inspections related to transit of goods across country; iv) providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or The Foreign Corrupt Practices Act (v) actions of a similar nature. (B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party. (g) Alternative Jurisdiction (1) It shall also be unlawful for any issuer organized under the laws of the United States, or a State, territory, possession, or commonwealth of the United States or a political subdivision thereof and which has a class of securities registered pursuant to section 78/ of this title or which is required to file reports under section 780(d)) of this title, or for any United States person that is an officer, director, employee, or agent of such issuer or a stockholder thereof acting on behalf of such issuer, to corruptly do any act outside the United States in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any of the persons or entities set forth in paragraphs (1), (2), and (3) of this subsection (a) of this section for the purposes set forth therein, irrespective of whether such issuer or such officer, director, employee, agent, or stockholder makes use of the mails or any means or instrumentality of interstate commerce in furtherance of such offer, gift, payment, promise, or authorization. (2) As used in this subsection, the term “United States person” means a national of the United States (as defined in section 101 of the Immigration and Nationality Act (8 U.S.C. § 1101)) or any corpo- ration, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the laws of the United States or any State, territory, possession, or com- monwealth of the United States, or any political subdivision thereof. 15 US.C. § 78dd-2 Prohibited foreign trade practices by domestic concerns (a) Prohibition Tt shall be unlawful for any domestic concern, other than an issuer which is subject to section 78dd-1 of this title, or for any officer, direc- tor, employee, or agent of such domestic concern or any stockholder thereof acting on behalf of such domestic concern, to make use of the mails or any means or instrumentality of interstate commerce HOUSE_OVERSIGHT_022596

95 corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to— (1) any foreign official for purposes of— (A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or (B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person; or (2) any foreign political party or official thereof or any candidate for foreign political office for purposes of — (A) (i) influencing any act or decision of such party, official, or candi- date in its or his official capacity, (ii) inducing such party, official, or can- didate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or (B) inducing such party, official, or candidate to use its or his influ- ence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such domestic concern in obtaining or retaining busi- ness for or with, or directing business to, any person; (3) any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of — (A) (i) influencing any act or decision of such foreign official, politi- cal party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candi- date to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or (B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person. (b) Exception for routine governmental action Subsections (a) and (i) of this section shall not apply to any facilitat- ing or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the perfor- mance of a routine governmental action by a foreign official, political party, or party official. (c) Affirmative defenses Tt shall be an affirmative defense to actions under subsection (a) or (i) of this section that— (1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official's, political party’s, party official's, or candidate’s country; or (2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to— A) the promotion, demonstration, or explanation of products or ser- vices; or B) the execution or performance of a contract with a foreign govern- ment or agency thereof. d) Injunctive relief 1) When it appears to the Attorney General that any domestic con- cern to which this section applies, or officer, director, employee, agent, or stockholder thereof, is engaged, or about to engage, in any act or practice constituting a violation of subsection (a) or (i) of this sec- tion, the Attorney General may, in his discretion, bring a civil action in an appropriate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond. (2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is necessary and proper to enforce this section, the Attorney General or his designee are empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books, papers, or other documents which the Attorney General deems relevant or material to such investigation. The attendance of witnesses and the production of documentary evi- dence may be required from any place in the United States, or any territory, possession, or commonwealth of the United States, at any designated place of hearing. (3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Attorney General or his designee, there to produce records, if so HOUSE_OVERSIGHT_022597

ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as acontempt thereof. All process in any such case may be served. in the judicial district in which such person resides or may be found. The Attorney General may make such rules relating to civil investiga- tions as may be necessary or appropriate to implement the provisions of this subsection. (e) Guidelines by Attorney General Not later than 6 months after August 23, 1988, the Attorney General, after consultation with the Securities and Exchange Commission, the Secretary of Commerce, the United States Trade Representative, the Secretary of State, and the Secretary of the Treasury, and after obtain- ing the views of all interested persons through public notice and com- ment procedures, shall determine to what extent compliance with this section would be enhanced and the business community would be assisted by further clarification of the preceding provisions of this section and may, based on such determination and to the extent neces- sary and appropriate, issue— (1) guidelines describing specific types of conduct, associated with common types of export sales arrangements and business contracts, which for purposes of the Department of Justice’s present enforce- ment policy, the Attorney General determines would be in confor- mance with the preceding provisions of this section; and (2) general precautionary procedures which domestic concerns may use on a voluntary basis to conform their conduct to the Department of Justice’s present enforcement policy regarding the preceding provi- sions of this section. The Attorney General shall issue the guidelines and procedures referred to in the preceding sentence in accordance with the provi- sions of subchapter H] of chapter 5 of Title 5 and those guidelines and procedures shall be subject to the provisions of chapter 7 of that title. (f) Opinions of Attorney General (1) The Attorney General, after consultation with appropriate depart- ments and agencies of the United States and after obtaining the views of all interested persons through public notice and comment procedures, shall establish a procedure to provide responses to specific inquiries by domestic concerns concerning conformance of their conduct with the Department of Justice’s present enforcement policy regarding the pre- ceding provisions of this section. The Attorney General shall, within 30 days after receiving such a request, issue an opinion in response to that request. The opinion shall state whether or not certain specified prospective conduct would, for purposes of the Department of Justice’s present enforcement policy, violate the preceding provisions of this sec- tion. Additional requests for opinions may be filed with the Attorney General regarding other specified prospective conduct that is beyond the scope of conduct specified in previous requests. In any action brought under the applicable provisions of this section, there shall be a rebuttable presumption that conduct, which is specified in a request The Foreign Corrupt Practices Act by a domestic concern and for which the Attorney General has issued. an opinion that such conduct is in conformity with the Department of Justice's present enforcement policy, is in compliance with the preced- ing provisions of this section. Such a presumption may be rebutted by a preponderance of the evidence. In considering the presumption for pur- poses of this paragraph, a court shall weigh all relevant factors, including but not limited to whether the information submitted to the Attorney General was accurate and complete and whether it was within the scope of the conduct specified in any request received by the Attorney General. The Attorney General shall establish the procedure required by this paragraph in accordance with the provisions of subchapter I of chapter 5 of Title 5 and that procedure shall be subject to the provisions of chapter 7 of that title. (2) Any document or other material which is provided to, received by, or prepared in the Department of Justice or any other department or agency of the United States in connection with a request by a domes- tic concern under the procedure established under paragraph (1), shall be exempt from disclosure under section 552 of Title 5 and shall not, except with the consent of the domestic concern, by made publicly available, regardless of whether the Attorney General response to such a request or the domestic concern withdraws such request before receiving a response. (3) Any domestic concern who has made a request to the Attorney General under paragraph (1) may withdraw such request prior to the time the Attorney General issues an opinion in response to such request. Any request so withdrawn shall have no force or effect. (4) The Attorney General shall, to the maximum extent practicable, provide timely guidance concerning the Department of Justice’s pres- ent enforcement policy with respect to the preceding provisions of this section to potential exporters and small businesses that are unable to obtain specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to responses to requests under para- graph (1) concerning conformity of specified prospective conduct with the Department of Justice’s present enforcement policy regard- ing the preceding provisions of this section and general explanations of compliance responsibilities and of potential liabilities under the preceding provisions of this section. (g) Penalties (1)(A) Any domestic concern that is not a natural person and that violates subsection (a) or (i) of this section shall be fined not more than $2,000,000. HOUSE_OVERSIGHT_022598

97 (B) Any domestic concern that is not a natural person and that vio- lates subsection (a) or (i) of this section shall be subject to a civil pen- alty of not more than $10,000 imposed in an action brought by the Attorney General. (2)(A) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domestic concern, who willfully violates subsection (a) or (i) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both. (B) Any natural person that is an officer, director, employee, or agent of a domestic concern, or stockholder acting on behalf of such domes- tic concern, who violates subsection (a) or (i) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General. (3) Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of a domestic concern, such fine may not be paid, directly or indirectly, by such domestic concern. (h) Definitions For purposes of this section: (1) The term “domestic concern” means— (A) any individual who is a citizen, national, or resident of the United States; and (B) any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States or a terri- tory, possession, or commonwealth of the United States. (2)(A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person act- ing in an ofhcial capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization. B) For purposes of subparagraph (A), the term “public international organization” means— i) an organization that has been designated by Executive order pursu- ant to Section 1 of the International Organizations Immunities Act 22 US.C. § 288); or ii) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register. 3)(A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if— i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially cer- tain to occur; or ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur. B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist. 4)(A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign ofhcial in— i) obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country; ii) processing governmental papers, such as visas and work orders; iii) providing police protection, mail pick-up and delivery, or sched- uling inspections associated with contract performance or inspections related to transit of goods across country; iv) providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or v) actions of a similar nature. B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party. (5) The term “interstate commerce” means trade, commerce, transpor- tation, or communication among the several States, or between any foreign country and any State or between any State and any place or ship outside thereof, and such term includes the intrastate use of — A) atelephone or other interstate means of communication, or B) any other interstate instrumentality. i) Alternative Jurisdiction 1) It shall also be unlawful for any United States person to corruptly do any act outside the United States in furtherance of an offer, pay- ment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of any- thing of value to any of the persons or entities set forth in paragraphs (1), (2), and (3) of subsection (a), for the purposes set forth therein, irrespective of whether such United States person makes use of the mails or any means or instrumentality of interstate commerce in fur- therance of such offer, gift, payment, promise, or authorization. HOUSE_OVERSIGHT_022599

(2) As used in this subsection, a “United States person” means a national of the United States (as defined in section 101 of the Immigration and Nationality Act (8 U.S.C. § 1101)) or any corpo- ration, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the laws of the United States or any State, territory, possession, or com- monwealth of the United States, or any political subdivision thereof. 15 US.C. § 78dd-3 Prohibited foreign trade practices by persons other than issuers or domestic concerns (a) Prohibition It shall be unlawful for any person other than an issuer that is subject to section 78dd-1 [Section 30A of the Exchange Act] of this title or a domestic concern, or for any officer, director, employee, or agent of such person or any stockholder thereof acting on behalf of such per- son, while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance ofan offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to— (1) any foreign official for purposes of — (A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or (B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such person in obtaining or retaining business for or with, or directing business to, any person; (2) any foreign political party or official thereof or any candidate for foreign political office for purposes of — (A) (i) influencing any act or decision of such party, official, or candi- date in its or his official capacity, (ii) inducing such party, official, or can- didate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage; or (B) inducing such party, official, or candidate to use its or his influ- ence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such person in obtaining or retaining business for or with, or directing business to, any person; or (3) any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of — The Foreign Corrupt Practices Act (A) (i) influencing any act or decision of such foreign official, politi- cal party, party official, or candidate in his or its official capacity, (ii) inducing such foreign offcial, political party, party official, or candi- date to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or (B) inducing such foreign official, political party, party official, or can- didate to use his or its influence with a foreign government or instru- mentality thereof to affect or influence any act or decision of such gov- ernment or instrumentality, in order to assist such person in obtaining or retaining business for or with, or directing business to, any person. (b) Exception for routine governmental action Subsection (a) of this section shall not apply to any facilitating or expediting payment to a foreign official, political party, or party ofh- cial the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official. (c) Affirmative defenses Tt shall be an affirmative defense to actions under subsection (a) of this section that— (1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official's, political party's, party official’s, or candidate’s country; or (2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to— A) the promotion, demonstration, or explanation of products or ser- vices; or B) the execution or performance of a contract with a foreign govern- ment or agency thereof. d) Injunctive relief 1) When it appears to the Attorney General that any person to which this section applies, or officer, director, employee, agent, or stock holder thereof, is engaged, or about to engage, in any act or practice HOUSE_OVERSIGHT_022600

99 constituting a violation of subsection (a) of this section, the Attorney General may, in his discretion, bring a civil action in an appropri- ate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond. (2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is necessary and proper to enforce this section, the Attorney General or his designee are empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books, papers, or other documents which the Attorney General deems relevant or material to such investigation. ‘The attendance of witnesses and the production of documentary evi- dence may be required from any place in the United States, or any territory, possession, or commonwealth of the United States, at any designated place of hearing. (3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Attorney General or his designee, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof. (4) All process in any such case may be served in the judicial district in which such person resides or may be found. The Attorney General may make such rules relating to civil investigations as may be necessary or appropriate to implement the provisions of this subsection. (e) Penalties (1)(A) Any juridical person that violates subsection (a) of this section shall be fined not more than $2,000,000. (B) Any juridical person that violates subsection (a) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General. (2)(A) Any natural person who willfully violates subsection (a) of this section shall be fined not more than $100,000 or imprisoned not more than 5 years, or both. (B) Any natural person who violates subsection (a) of this section shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Attorney General. (3) Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of a person, such fine may not be paid, directly or indirectly, by such person. (f) Definitions For purposes of this section: (1) The term “person,” when referring to an offender, means any natu- ral person other than a national of the United States (as defined in 8 US.C. § 1101) or any corporation, partnership, association, joint- stock company, business trust, unincorporated organization, or sole proprietorship organized under the law of a foreign nation or a politi- cal subdivision thereof (2)(A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person act- ing in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization. For purposes of subparagraph (A), the term “public international organization” means— (i) an organization that has been designated by Executive Order pur- suant to Section 1 of the International Organizations Immunities Act (22 US.C. § 288); or (ii) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register. 3)(A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if— i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such result is substantially cer- tain to occur; or ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur. B) When knowledge of the existence of a particular circumstance is required for an offense, such knowledge is established if a person is aware of a high probability of the existence of such circumstance, unless the person actually believes that such circumstance does not exist. 4)(A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign ofhcial in— i) obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country; ii) processing governmental papers, such as visas and work orders; iii) providing police protection, mail pick-up and delivery, or sched- uling inspections associated with contract performance or inspections related to transit of goods across country; iv) providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or v) actions of a similar nature. HOUSE_OVERSIGHT_022601

(B) The term “routine governmental action” does not include any decision by a foreign official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by a foreign official involved in the decision-making process to encourage a decision to award new business to or continue business with a particular party. (5) The term “interstate commerce” means trade, commerce, transpor- tation, or communication among the several States, or between any foreign country and any State or between any State and any place or ship outside thereof, and such term includes the intrastate use of — (A) a telephone or other interstate means of communication, or (B) any other interstate instrumentality. oe OR OF 15 US.C. § 78m [Section 13 of the Securities Exchange Act of 1934] Periodical and other reports (a) Reports by issuer of security; contents Every issuer of a security registered pursuant to section 78] of this title shall file with the Commission, in accordance with such rules and reg- ulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security— (1) such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an applica- tion or registration statement filed pursuant to section 78] of this title, except that the Commission may not require the filing of any material contract wholly executed before July 1, 1962. (2) such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent pub- lic accountants, and such quarterly reports (and such copies thereof), as the Commission may prescribe. Every issuer of a security registered on a national securities exchange shall also file a duplicate original of such information, documents, and reports with the exchange. In any registration statement, periodic report, or other reports to be filed with the Commission, an emerging growth company need not present selected financial data in accor- dance with section 229.301 of title 17, Code of Federal Regulations, for any period prior to the earliest audited period presented in con- nection with its first registration statement that became effective under this chapter or the Securities Act of 1933 [15 U.S.C. §§ 77a, et seq.| and, with respect to any such statement or reports, an emerg- ing growth company may not be required to comply with any new The Foreign Corrupt Practices Act or revised financial accounting standard until such date that a com- pany that is not an issuer (as defined under section 7201 of this title) is required to comply with such new or revised accounting standard, if such standard applies to companies that are not issuers. (b) Form of report; books, records, and internal accounting; directives (1) The Commission may prescribe, in regard to reports made pursu- ant to this chapter, the form or forms in which the required informa- tion shall be set forth, the items or details to be shown in the balance sheet and the earnings statement, and the methods to be followed in the preparation of reports, in the appraisal or valuation of assets and liabilities, in the determination of depreciation and depletion, in the differentiation of recurring and nonrecurring income, in the differen- tiation of investment and operating income, and in the preparation, where the Commission deems it necessary or desirable, of separate and/or consolidated balance sheets or income accounts of any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer; but in the case of the reports of any person whose methods of accounting are prescribed under the provisions of any law of the United States, or any rule or regulation thereunder, the rules and regulations of the Commission with respect to reports shall not be inconsistent with the requirements imposed by such law or rule or regulation in respect of the same subject matter (except that such rules and regulations of the Commission may be inconsistent with such requirements to the extent that the Commission determines that the public interest or the protection of investors so requires). (2) Every issuer which has a class of securities registered pursuant to section 78] of this title and every issuer which is required to file reports pursuant to section 780(d) of this title shall— (A) make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; B) devise and maintain a system of internal accounting controls suf- ficient to provide reasonable assurances that— i) transactions are executed in accordance with management's general or specific authorization; ii) transactions are recorded as necessary (I) to permit preparation of financial statements in conformity with generally accepted accounting HOUSE_OVERSIGHT_022602 100

101 principles or any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance with manage- ment’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the exist- ing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (C) notwithstanding any other provision of law, pay the allocable share of such issuer of a reasonable annual accounting support fee or fees, determined in accordance with section 7219 of this title. (3)(A) With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsec- tion shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provi- sions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance. (B) Each head of a Federal department or agency of the United States who issues such a directive pursuant to this paragraph shall main- tain a complete file of all such directives and shall, on October 1 of each year, transmit a summary of matters covered by such directives in force at any time during the previous year to the Permanent Select Committee on Intelligence of the House of Representatives and the Select Committee on Intelligence of the Senate. (4) No criminal liability shall be imposed for failing to comply with the requirements of paragraph (2) of this subsection except as pro- vided in paragraph (5) of this subsection. (5) No person shall knowingly circumvent or knowingly fail to imple- ment a system of internal accounting controls or knowingly falsify any book, record, or account described in paragraph (2). (6) Where an issuer which has a class of securities registered pursu- ant to section 78] of this title or an issuer which is required to file reports pursuant to section 780(d) of this title holds 50 per centum or less of the voting power with respect to a domestic or foreign firm, the provisions of paragraph (2) require only that the issuer proceed in good faith to use its influence, to the extent reasonable under the issuer's circumstances, to cause such domestic or foreign firm to devise and maintain a system of internal accounting controls consistent with paragraph (2). Such circumstances include the relative degree of the issuer’s ownership of the domestic or foreign firm and the laws and practices governing the business operations of the country in which such firm is located. An issuer which demonstrates good faith efforts to use such influence shall be conclusively presumed to have complied with the requirements of paragraph (2). (7) For the purpose of paragraph (2) of this subsection, the terms “rea- sonable assurances” and “reasonable detail” mean such level of detail and degree of assurance as would satisfy prudent officials in the con- duct of their own affairs. ea 15 US.C. § 78ff Penalties [Section 32 of the Securities Exchange Act of 1934] (a) Willful violations; false and misleading statements Any person who willfully violates any provision of this chapter (other than section 78dd-1 of this title [Section 30A of the Exchange Act]), or any rule or regulation thereunder the violation of which is made unlawful or the observance of which is required under the terms of this chapter, or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or docu- ment required to be filed under this chapter or any rule or regulation thereunder or any undertaking contained in a registration statement as provided in subsection (d) of section 780 of this title, or by any self-regulatory organization in connection with an application for membership or participation therein or to become associated with a member thereof, which statement was false or misleading with respect to any material fact, shall upon conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both, except that when such person is a person other than a natural person, a fine not exceeding $25,000,000 may be imposed; but no person shall be subject to imprisonment under this section for the violation of any rule or regulation if he proves that he had no knowledge of such rule or regulation. (b) Failure to file information, documents, or reports Any issuer which fails to file information, documents, or reports required to be filed under subsection (d) of section 780 of this title or any rule or regulation thereunder shall forfeit to the United States the sum of $100 for each and every day such failure to file shall continue. Such forfeiture, which shall be in lieu of any criminal penalty for such failure to file which might be deemed to arise under subsection (a) of this section, shall be payable into the Treasury of the United States and shall be recoverable in a civil suit in the name of the United States. c) Violations by issuers, officers, directors, stockholders, employees, or agents of issuers 1)(A) Any issuer that violates subsection (a) or (g) of section 78dd-1 Section 30A of the Exchange Act] of this title shall be fined not more than $2,000,000. B) Any issuer that violates subsection (a) or (g) of section 78dd-1 HOUSE_OVERSIGHT_022603

[Section 30A of the Exchange Actlof this title shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission. (2)(A) Any officer, director, employee, or agent of an issuer, or stock- holder acting on behalf of such issuer, who willfully violates subsec- tion (a) or (g) of section 78dd-1 [Section 30A of the Exchange Act] of this title shall be fined not more than $100,000, or imprisoned not more than 5 years, or both. (B) Any officer, director, employee, or agent of an issuer, or stock- holder acting on behalf of such issuer, who violates subsection (a) or (g) of section 78dd-1 [Section 30A of the Exchange Act] of this title shall be subject to a civil penalty of not more than $10,000 imposed in an action brought by the Commission. (3) Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of an issuer, such fine may not be paid, directly or indirectly, by such issuer. The Foreign Corrupt Practices Act 102 HOUSE_OVERSIGHT_022604

HOUSE_OVERSIGHT_022605

ENDNOTES 'S. Rep. No. 95-114, at 4 (1977) [hereinafter S. Rep. No. 95-114], available at http ://www.justice.gov/' criminal/fraud/ fcpa/ history/ 1977/ senaterpt-95-114.pdf. * Id; H.R. Rep. No. 95-640, at 4-5 (1977) [hereinafter H. R. Rep. No. 95-640], available at http ://www.justice.gov/criminal/fraud/fcpa/ history/1977/houseprt-95-640.pdf. ‘The House Report made clear Congress's concerns: The payment of bribes to influence the acts or decisions of foreign officials, foreign political parties or candidates for foreign political office is unethical. It is counter to the moral expectations and values of the American public. But not only is it unethical, it is bad business as well. It erodes public confidence in the integrity of the free market system. It short- circuits the marketplace by directing business to those companies too inefficient to compete in terms of price, quality or service, or too lazy to engage in honest salesmanship, or too intent upon unloading marginal products. In short, it rewards corruption instead of efficiency and puts pressure on ethical enterprises to lower their standards or risk losing business. Td. 3 See, e.g, U.S. AGENCY FOR INT'L Dev., USAID ANTICORRUPTION STRATEGY 5-6 (2005), available at http://transition.usaid.gov/policy/ ads/200/200mbo.pdf. The growing recognition that corruption poses asevere threat to domestic and international security has galvanized efforts to combat it in the United States and abroad. See, CLs Intl Anti- Corruption and Good Governance Act of 2000, Pub. L. No. 106-309, § 202, 114 Stat. 1090 (codified as amended at 22 US.C. §§ 2151-2152 (2000)) (noting that “[w]idespread corruption endangers the stability and security of societies, undermines democracy, and jeopardizes the social, political, and economic development ofa society. vee [and that] [clorruption facilitates criminal activities, such as money laundering, hinders economic development, inflates the costs of doing business, and undermines the legitimacy of the government and public trust”). 4 See Maryse Tremblay & Camille Karbassi, Corruption and Human Trafficking 4 (Transparency Int'l, Working Paper No. 3,201 1), available at http: //issuu.com/ transparencyinternational/ docs/ ti-working_paper_ human_trafficking 28 _jun_2011; U.S. AGENCY FoR INT’L Dev. FOREIGN AID IN THE NATIONAL INTEREST 40 (2002), available at http://pdfusaid.gov/pdf_docs/PDABW900.pdf (“No problem does more to alienate citizens from their political leaders and institutions, and to undermine political stability and economic development, than endemic corruption among the government, political party leaders, judges, and bureaucrats. The more endemic the corruption is, the more Endnotes likely itis to be accompanied by other serious deficiencies in the rule of law: smuggling, drug traficking, criminal violence, human rights abuses, and personalization of power.’). > President George W. Bush observed in 2006 that “the culture of corruption has undercut development and good governance and .... impedes our efforts to promote freedom and democracy, end poverty, and combat international crime and terrorism.” President’s Statement on Kleptocracy, 2 Pus. Papers 1504 (Aug. 10, 2006), available at http i//; georgewbush-whitehouse.archives.gov/ news/ releases/2006/08/20060810.html. The administrations of former President George W. Bush and President Barack Obama both recognized the threats posed to security and stability by corruption. For instance, in issuing a proclamation restricting the entry of certain corrupt foreign public officials, former President George W. Bush recognized “the serious negative effects that corruption of public institutions has on the United States’ efforts to promote security and to strengthen democratic institutions and free market systems... .” Proclamation No. 7750, 69 Fed. Reg. 2287 (Jan. 14, 2004). Similarly, President Barack Obama's National Security Strategy paper, released in May 2010, expressed the administration’s efforts and commitment to promote the recognition that “pervasive corruption is a violation of basic human rights and a severe impediment to development and global security.” THE WHITE House, NATIONAL SECURITY STRATEGY 38 (2010), available at http:// www.whitehouse.gov/ sites/default/files/rss_viewer/ national_security_ strategy.pdf. 6 See, C85 INT’L CHAMBER OF COMMERCE, ET AL., CLEAN BUSINESS Is Goop BusINEss: THE BUSINESS CASE AGAINST CORRUPTION (2008), available at http ://www.unglobalcompact.org/docs/news_ events/8.1/ clean_business_is_good_business. pdf; ; World Health Org., Fact Sheet No. 335, Medicines: Corruption and Pharmaceuticals (Dec. 2009), available at http ://wwwowho.int/mediacentre/factsheets/fs335/ en/; Daniel Kaufmann, Corruption: The Facts, FOREIGN Por’y, Summer 1997, at 119-20; Paolo Mauro, Corruption and Growth, 110 Q. J. Econ. 681, 683, 705 (1995) (finding that “corruption lowers private investment ... [and] reduc[es] economic growth ...”); THE WorLD BANK, THE Data REVOLUTION: MEASURING GOVERNANCE AND CORRUPTION, (Apr. 8, 2004), available at http ://go.worldbank.org/87JUY8 GJHO. ’ See, e.g., The Corruption Eruption, ECONOMIST (Apr. 29, 2010), available at http://www.economist.com/node/ 16005114 (“The hidden costs of corruption are almost always much higher than companies imagine. Corruption inevitably begets ever more corruption: bribe-takers keep returning to the trough and bribe-givers open themselves up to blackmail”); Daniel Kaufmann and Shang-Jin Wei, Does “Grease Money” Speed Up the Wheels of Commerce? 2 (Nat'l Bureau of Econ. Research, Working Paper No. 7093, 1999), available at http ://www.nber.org/ papers/w7093.pdf (“Contrary to the ‘efficient grease’ theory, we find 104 HOUSE_OVERSIGHT_022606

105 that firms that pay more bribes are also likely to spend more, not less, management time with bureaucrats negotiating regulations, and face higher, not lower, cost of capital.”). 8 For example, in a number of recent enforcement actions, the same employees who were directing or controlling the bribe payments were also enriching themselves at the expense of the company. See, e.g., Complaint, SEC vy. Peterson, No. 12-cv-2033 (E.D.NY. 2012), ECF No. 1, available at http ://www.sec.gov/litigation/complaints/20 12/ comp-pr2012-78.pdf; Criminal Information, United States v. Peterson, No. 12-cr-224 (E.D.N.Y. 2012), ECF No. 7 [hereinafter United States v. Peterson|, available at http: //www.justice.gov/ criminal/fraud/ fepa/ cases/ petersong/ petersong-information.pdf; Plea Agreement, United States v. Stanley, No. 08-cr-597 (S.D. Tex. 2008), ECF No. 9 [hereinafter United States v. Stanley] , available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/, stanleya/ 09-03-08stanley- plea-agree.pdf; Plea Agreement, United States v. Sapsizian, No. 06-cr-20797 (S.D. Fla. 2007), ECF No. 42 [hereinafter United States v. Sapsizian|, available at http: //wwwjustice. gov/ criminal/fraud/ fcpa/ cases/sapsizianc/' 06-06-07 sapsizian- plea.pdf. ? See, 6.8, Complaint, SEC y. Tyco Int'l Ltd., 06-cv-2942 (S.D.N-Y. 2006), ECF No. 1 [hereinafter SEC v. Tyco Int'l], available at http://www.sec. gov/litigation/complaints/2006/comp 1 9657.pdf; Complaint, SEC v. Willbros Group, Inc. No. 08-cv- 1494 (S.D. Tex. 2008), ECF No. 1 [hereinafter SEC v. Willbros|, available at http ://www.sec.gov/ litigation/ complaints/2008/comp20571 pdf. 10 See Plea Agreement, United States v. Bridgestone Corp., No. 11-cr- 651 (S.D. Tex. 2011), ECF No. 21, available at http://www.justice.gov/ criminal/fraud/fcpa/cases/bridgestone/ 10-05-1 Ibridgestone-plea.pdf. " See S. Rep. No. 95-114, at 6; H.R. Rep, 95-640, at 4; see also A. Carl Kotchian, The Payoff: Lockheed’ 70-Day Mission to Tokyo, SATURDAY Rev., Jul. 9, 1977, at 7. US, SEC. AND EXCHANGE COMM., REPORT OF THE SECURITIES AND EXCHANGE COMMISSION ON QUESTIONABLE AND ILLEGAL CORPORATE PAYMENTS AND PRACTICES 2-3 (1976). 3 See H.R. Rep. No. 95-640, at 4-5; S. Rep. No. 95-114, at 3-4. “FR. Rep. No. 95-640, at 4-5; S. Rep. No. 95-114, at 4. The Senate Report observed, for instance, that “[m]anagements which resort to corporate bribery and the falsification of records to enhance their business reveal a lack of confidence about themselves,’ while citing the Secretary of the Treasury's testimony that “| p|aying bribes—apart from being morally repugnant and illegal in most countries—is simply not necessary for the successful conduct of business here or overseas.” Jd. '5 See S. Rep. No. 100-85, at 46 (1987) (recounting FCPA’s historical background and explaining that “a strong antibribery statute could help US. corporations resist corrupt demands. ...”) [hereinafter S. Rep. No. 100-85]. 16S. Rep. No. 95-114, at 7. '7Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100- 418, § 5003, 102 Stat. 1107, 1415-25 (1988); see also H.R. Rep. No. 100-576, at 916-24 (1988) (discussing FCPA amendments, including changes to standard of liability for acts of third parties) [hereinafter H.R. Rep. No. 100-576]. '8 See Omnibus Trade and Competitiveness Act of 1988, § 5003(d). The amended statute included the following directive: Tt is the sense of the Congress that the President should pursue the negotiation of an international agreement, among the members of the Organization of Economic Cooperation and Development, to govern persons from those countries concerning acts prohibited with respect to issuers and domestic concerns by the amendments made by this section. Such international agreement should include a process by which problems and conflicts associated with such acts could be resolved. Id.; see also S. Rev. No. 105-277, at 2 (1998) (describing efforts by Executive Branch to encourage U.S. trading partners to enact legislation similar to FCPA following 1988 amendments) [hereinafter S. Rep. No. 105-277]. ! Convention on Combating Bribery of Foreign Public Officials in International Business Transactions art. 1.1, Dec. 18, 1997, 37 LL.M. 1 [hereinafter Anti-Bribery Convention]. The Anti-Bribery Convention requires member countries to make it a criminal offense “for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, toa foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.” The Convention and its commentaries also call on all parties (a) to ensure that aiding and abetting and authorization of an act of bribery are criminal offenses, (b) to assert territorial jurisdiction “broadly so that an extensive physical connection to the bribery act is not required,” and (c) to assert nationality jurisdiction consistent with the general principles and conditions of each party’s legal system. Jd. at art. 1.2, cmts. 25, 26. 20 See International Anti-Bribery and Fair Competition Act of 1998, Pub. L. 105-366, 112 Stat. 3302 (1998); see also S. Rep. No. 105-277, at 2-3 (describing amendments to “the FCPA to conform it to the requirements of and to implement the OECD Convention’). 21 There is no private right of action under the FCPA. See, CBs Lamb v. Phillip Morris, Inc., 915 F.2d 1024, 1028-29 (6th Cir. 1990); McLean vy. Int'l Harvester Co., 817 F2d 1214, 1219 (Sth Cir. 1987). “US. DEPT. OF JUSTICE, US. ATTORNEYS’ MANUAL § 9-47.110 (2008) [hereinafter USAM ], available at http://wwwjustice.gov/usao/ eousa/: foia_reading_room/ usam/. 23Go to http: //export.gov/ worldwide_us/ index.asp for more information. 4 Additional information about publicly available market research and due diligence assistance is available online. See In] Trade Admin., Market Research and Due Diligence, available at http ://export.gov/ salesandmarketing/ eg_main_01 8204.as Pp. The International Company Profile reports include a listing of the potential partner’s key officers and senior management; banking relationships and other financial information about the company; and market information, including sales and profit figures and potential liabilities. They are not, however, intended to substitute for a company’s own due diligence, and the Commercial Service does not offer ICP in countries where Dun & Bradstreet or other private sector vendors are already performing this service. See In] Trade Admin., International Company Profile, available at http ://export.gov/, salesandmarketing/ eg_main_018198.asp. * The Commercial Services’ domestic and foreign offices can also be found at http://export.gov/usofhices/index.asp and http://export.gov/ worldwide_us/index.as Pp. 26 This form can be located at hetp:/ /tec.export.gov/Report_a_Barrier/ index.asp. ~ See IN’L' TRADE ADMIN., DOING BusINEsS IN” GUIDES, available at http ://export.gov/about/eg_main_0 16806.asp. 8 ‘The Business ErHics MANUAL is available at http ff www.ita.doc.gov/ goodgovernance/| business_ethics/ manual.asp. 22 Information about the Advocacy Center can be found at hetp:/ /export. gov/ advocacy. 40 Reports on US. compliance with these treaties can be found at http:// www.justice.gov/ criminal/fraud/ fcpa/ intlagree/ . 3! See Statement on Signing the International Anti-Bribery and Fair Competition Act of 1998, 34 WEEKLY Comp. Pres. Doc. 2290, 2291 (Nov. 10, 1998) “U.S. companies have had to compete on an uneven playing field.... The OECD Convention. .. is designed to change all that. Under the Convention, our major competitors will be obligated to criminalize the bribery of foreign public officials in international business transactions.’). » Colombia is also a member of the Working Group and is expected to accede to the Anti-Bribery Convention. 3 OECD, Country Monitoring of the OECD Anti-Bribery Convention, available at http ://www.oecd.org/document/ 12/0,3746, en_2649_34859_35692940_1_1 1 _1,00.html. 34 OECD, Phase 3 Country Monitoring of the OECD Anti-Bribery Convention, available at http ://www.oecd.org/document/3 1/0,3746, en_2649_34859_44684959_1_1 1 _1,00.html. @ OECD, Country Reports on the Implementation of the OECD Anti- Bribery Convention, available at http ://www.oecd.org/document/24/0,3 746,en_2649_34859_1933144_ 11 1 1,00.html. 36 The OECD Phase 1, 2, and 3 reports on the United States, as well as the US. responses to questionnaires, are available at hetp:/ /www.justice. gov/ criminal/fraud/ fepa/ intlagree. 7 See OECD Working Group on Bribery, United States: Phase 3, Report on the Application of the Convention on Combating Bribery of Foreign HOUSE_OVERSIGHT_022607

Public Officials in International Business Transactions and the 2009 Revised Recommendation on Combating Bribery in International Business Transactions, Oct. 2010, at 61-62 (recommending that the United States “[clonsolidate and summarise publicly available information on the application of the FCPA in relevant sources”), available at hetp:/ / www. oecd.org/datacecd/ 10/49/46213841 pdf. 38 United Nations Convention Against Corruption, Oct. 31, 2003, S. Treaty Doc. No. 109-6, 2349 UN.TS. 41, available at http://www. unodc.org/ documents/treaties/ UNCAC/Publications/Convention/08- 50026_E.pdf [hereinafter UNCAC]. 39 For more information about the UNCAC review mechanism, see Mechanism for the Review of Implementation of the United Nations Convention Against Corruption, United Nations Office on Drugs and Crime, available at http i// www.unodc.org/ documents/treaties/ UNCAC/Publications/ReviewMechanism-BasicDocuments/ Mechanism_for_the_Review_of_Implementation_-_Basic_ Documents_-_E.pdf. “For information about the status of UNCAC, see United Nations Office on Drugs and Crime, UNCAC Signature and Ratification Status as of 12 July 2012, available at http ://www.unode.org/unodc/en/treaties/ CAC/ signatories.html. ah Organization of American States, Inter-American Convention Against Corruption, Mar, 29, 1996, 35 LL.M. 724, available at http://www.oas. org/ juridico/ english/ treaties/b-58.html. For additional information about the status of the IACAC, see Organization of American States, Signatories and Ratifications, available at http ://www.oas.org/ juridico/ english/Sigs/b-58.html. 2 Council of Europe, Criminal Law Convention on Corruption, Jan. 27, 1999, 38 LL.M. 505, available at http://conventions.coe.int/Treaty/en/ Treaties/html/173.htm. 8 For additional information about GRECO, see Council of Europe, Group of States Against Corruption, available at http ://www.coe.int/t/ dghl/ monitoring/greco/ default_EN.asp. The United States has not yet ratified the GRECO convention. “The text of the FCPA statute is set forth in the appendix. See also Jury Instructions at 21-27, United States v. Esquenazi, No. 09-cr-21010 (S.D. Fla. Aug. 5, 201 1), ECF No. 520 [hereinafter United States v. Esquenazi| (FCPA jury instructions); Jury Instructions at 14-25, United States v. Kay, No. O1-cr-914 (S.D. Tex. Oct. 6, 2004), ECF No. 142 (same), aff a, 513 R3d 432, 446-52 (5th Cir. 2007), reh’g denied, 513 F.3d 461 (5th Cir. 2008) [hereinafter United States v. Kay] ; Jury Instructions at 76-87, United States v. Jefferson, No. 07-cr-209 (E.D. Va. July 30, 2009), ECF No. 684 [hereinafter United States v. Jefferson] (same); Jury Instructions at 8-10, United States v. Green, No. 08-cr-59 (C.D. Cal. Sept. 11, 2009), ECF No. 288 [hereinafter United States v. Green| (same); Jury Instructions at 23-29, United States v. Bourke, No. 05-cr-518 (S.D.NY. July 2009) [hereinafter United States v. Bourke] (same, not docketed); Jury Instructions at 2-8, United States v. Mead, No. 98-cr-240 (D.N J. Oct. 1998) [hereinafter United States v. Mead] (same). 5 The provisions of the FCPA applying to issuers are part of the Securities Exchange Act of 1934 [hereinafter Exchange Act]. The anti-bribery provisions can be found at Section 30A of the Exchange Act, 15 US.C. § 78dd-1. #15 US.C. § 782 4715 US.C. § 780(d). 48SEC enforcement actions have involved a number of foreign issuers. See, €.¢., Complaint, SEC v. Magyar Telekom Ple., et al., No. 11-cv-9646 (S.D.N.Y. Dec. 29, 2011), ECF No. 1 (German and Hungarian companies), available at http: //wwwsec.gov/ litigation/ complaints/201 1/comp2221 3-co.pdf; Complaint, SEC v. Aleatel- Lucent, S.A., No. 10-cy-24620 (S.D. Fla. Dec. 27, 2010), ECF No. 1 [hereinafter SEC v. Alcatel-Lucent] (French company), available at http ://www.sec.gov/litigation/complaints/20 10/comp2 1795.pdé; Complaint, SEC v. ABB, Ltd., No. 10-cv-1648 (D.D.C. Sept. 29, 2010), ECF No. 1 [hereinafter SEC v. ABB] (Swiss company), available at http ://www.sec.gov/litigation/complaints/20 10/comp-pr2010-175. pdf; Complaint, SEC v. Daimler AG, No. 10-cv-473 (D.D.C. Apr. 1, 2010), ECF No. 1 [hereinafter SEC v. Daimler AG] (German company), available at http ://sec.gov/litigation/complaints/20 10/comp- pr20 10-5 l.pdf; Complaint, SEC v. Siemens Aktiengesellschaft, No. 08- cv-2167 (D.D.c. Dec. 12, 2008), ECF No. 1 [hereinafter SEC v. Siemens AG] (Germany company), available at http ://www.sec.gov/ litigation/ Endnotes complaints/2008/comp20829.pdf. Certain DOJ enforcement actions have likewise involved foreign issuers. See, 6g, Criminal Information, United States v. Magyar Telekom, Ple. No. 11-cr-597 (E.D. Va. Dec. 29, 2011), ECF No. 1, available at http://wwwjustice.gov/criminal/fraud/ fcpa/ cases/ magyar-telekom/ 2011-1 2-29-information-magyar-telekom. pdf; Non-Pros. Agreement, In re Deutsche Telekom AG (Dec. 29,201 1), available at http ://www.justice.gov/criminal/ fraud/ fcpa/ cases/deutsche- telekom/2011- 12-29-deustche-telekom-npa.pdf; Criminal Information, United States v. Alcatel-Lucent, S.A., No. 10-cr-20907 (S.D. Fla. Dec. 27, 2010), ECF No. 1 [hereinafter United States v. Alcatel-Lucent, S.A. |, available at http ://wwwjustice.gov/criminal/ fraud/ fcpa/ cases/alcatel- etal/12-27- 10alcatel-et-al-info.pdf; Criminal Information, United States v. Daimler AG, No. 10-cr-63 (D.D.C. Mar. 22, 2010), ECF No. 1 [hereinafter United States v. Daimler AG), available at http: / / www. justice.gov/ criminal/fraud/ fcpa/ cases/daimler/03-22-1 Odaimlerag-info. pd; ; Criminal Information, United States v. Siemens Aktiengesellschaft, No. 08-cr-367 (D.D.C. Dec. 12, 2008), ECF No. 1 [hereinafter United States v. Siemens AG], available at http ://www.justice.gov/ criminal/ fraud/fcpa/cases/siemens/ 12-1 2-08siemensakt-info.pdf. @ See http ://www.sec.gov/divisions/corpfin/internatl/companies.shtml. ° See, 0.85 Complaint, SEC v. Turner, ef al, No. 10-cv-1309 (D.D.C. Aug. 4, 2010), ECF No. 1 [hereinafter, SEC v. Turner] (charging a Lebansese/Canadian agent ofa UK company listed on US. exchange with violating the FCPA for bribes of Iraqi officials), available at hetp:/ / www.sec.gov/litigation/complaints/20 10/comp2 161 5.pdf; Indictment, United States v. Naaman, No. 08-cr-246 (D.D.C. Aug. 7, 2008), ECF No. 3 [hereinafter United States v. Naaman] (same), available at http:// www.justice.gov/ criminal/fraud/ fcpa/ cases/naamano/08-07-08naaman- indict.pdf; Complaint, SEC y. Elkin, et al., No. 10-cv-661 (D.D.C. Apr. 28, 2010), ECF No. 1 [hereinafter SEC v. Elkin] (charging an employee of US. publicly traded company with violating FCPA for bribery of officials in Kyrgyzstan), available at http ://www.sec.gov/ litigation/ complaints/ 2010/comp21 509.pdf; Criminal Information, United States v. Elkin, No. 10-cr-15 (W.D. Va. Aug. 3, 2010), ECF No. 8 [hereinafter United States v. Elkin] (same), available at hetp:/ / www. justice.gov/: criminal/fraud/ fcpa/ cases/elkin/O8-03-10elkin-information. pdf; Indictment, United States v. Tesler, et a/., No. 09-cr-98 (S.D. Tex. Feb. 17, 2009), ECF No. 1 [hereinafter United States v. Tester] (charging a British agent of US. publicly traded company with violating the FCPA for bribery of Nigerian officials), available at http: //wwwjustice. gov/ criminal/fraud/ fepa/ cases/tesler/tesler-indict. pdf; ; Superseding Indictment, United States v. Sapsizian, et al. supra note 8, ECF 32 (charging a French employee of French company traded on a US. exchange with violating the FCPA). 5115 US.C. § 78dd-2. °15 US.C. § 78dd-2(h)(1). 15 US.C. § 78dd-2(a). See, CL Superseding Indictment, United States v. Nexus Technologies, et al., No. 08-cr-522 (E.D. Pa. Oct. 28, 2009), ECF No. 106 [hereinafter Uzited States v. Nexus Technologies] (private US. company and corporate executives charged with violating FCPA for bribes paid in Vietnam), available at http ://wwwjustice.gov/ criminal/ fraud/ fepa/ cases/nguyenn/ 09-04-O8nguyen-indict.pdf; Indictment, United States v. Esquenazi, supra note 44, (private US. company and corporate executives charged with FCPA violations for bribes paid in Haiti), available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/ esquenazij/12-08-O9esquenazi-indict.pdf. #15 US.C. § 78dd-3(a). As discussed above, foreign companies that have securities registered in the United States or that are required to file periodic reports with the SEC, including certain foreign companies with American Depository Receipts, are covered by the FCPA’s anti-bribery provisions governing “issuers” under 15 U.S.C. § 78dd-1. 106 HOUSE_OVERSIGHT_022608

107 55 See International Anti-Bribery and Fair Competition Act of 1998, Pub. L. 105-366, 112 Stat. 3302 (1998); 15 US.C. § 78dd-3(a); see also US. Dept. OF JUSTICE, CRIMINAL RESOURCE MANUAL § 9-1018 (Nov. 2000) (the Department “interprets [Section 78dd-3(a)] as conferring jurisdiction whenever a foreign company or national causes an act to be done within the territory of the United States by any person acting as that company’s or national'’s agent.”). This interpretation is consistent with US. treaty obligations. See S. Rep. No. 105-2177 (1998) (expressing Congress’ intention that the 1998 amendments to the FCPA “conform it to the requirements ofandto implement the OECD Convyention.”); Anti-Bribery Convention at art. 4.1, supra note 19 (“Each Party shall take such measures as may be necessary to establish its jurisdiction over the bribery ofa foreign public official when the offence is committed in whole or in part in its territory.”). 5615 US.C.§ 78dd-3(a); see, CL Criminal Information, United States v. Alcatel-Lucent France, S.A., et al., No. 10-cr-20906 (S.D. Fla. Dec. 27, 2010), ECF No. 1 [hereinafter United States v. Alcatel-Lucent France| (subsidiary of French publicly traded company convicted of conspiracy to violate FCPA), available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/alcatel-lucent-sa-etal/12-27- 10alcatel-et-al-info.pdf; Criminal Information, United States v. DaimlerChrysler Automotive Russia SAO, No. 10-cr-64 (D.D.C. Mar. 22, 2010), ECF No. 1 (subsidiary of German publicly traded company convicted of violating FCPA), available at http ://www.justice.gov/criminal/fraud/fcpa/cases/daimler/03-22- 10daimlerrussia-info.pdf; Criminal Information, United States v. Siemens S.A. (Argentina), No. 08-cr-368 (D.D.C. Dec. 12, 2008), ECF No. 1 (subsidiary of German publicly traded company convicted of violating FCPA), available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/ siemens/ 12- 12-08siemensargen-info. pdf. >” See 15 US.C. §§ 78dd-2(h)(5) (defining “interstate commerce”), 78dd- 3(£)(5) (same); see also 15 U.S.C. §78c(a)(17). 3815 US.C. §§ 78dd-2(h)(5), 78dd-3(£)(5). 59 See 15 US.C. § 78dd-3. @ Criminal Information, United States v. JGC Corp., No. 11-cr-260 (S.D. Tex. Apr. 6, 2011), ECF No. 1 [hereinafter United States v. JGC Corp. |, available at http ://www.justice.gov/criminal/fraud/fcpa/cases/ jgc-corp/04-6- 1 ljge-corp-info.pdf; Criminal Information, United States v. Snamprogetti Netherlands BV., No. 10-cr-460 (S.D. Tex. Jul. 7, 2010), ECF No. 1 [hereinafter United States v. Snamprogetti|, available at http ://www.justice.gov/criminal/fraud/fcpa/cases/snamprogetti/07-07- 10snamprogetti-info.pdf. $1 See 15 US.C. §§ 78dd-1(g) (“irrespective of whether such issuer or such officer, director, employee, agent, or stockholder makes use of the mails or any means or instrumentality of interstate commerce in furtherance of such offer, gift, payment, promise, or authorization”), 78dd-2(i) (1) Cirrespective of whether such United States person makes use of the mails or any means or instrumentality of interstate commerce in furtherance of such offer, gift, payment, promise, or authorization”). &§, Rep. No. 105-277 at 2 (“[T ]he OECD Convention calls on parties to assert nationality jurisdiction when consistent with national legal and constitutional principles. Accordingly, the Act amends the FCPA to provide for jurisdiction over the acts of US. businesses and nationals in furtherance of unlawful payments that take place wholly outside the United States. This exercise of jurisdiction over U.S. businesses and nationals for unlawful conduct abroad is consistent with US. legal and constitutional principles and is essential to protect USS. interests abroad.”). 3 Td, at 2-3. 15 US.C. §§ 78dd-1(a), 78dd-2(a), 78dd-3 (a). % See H.R. Rep. No. 95-831, at 12 (referring to “business purpose” test). 66 See, Cs Complaint, SEC v. Siemens AG, supra note 48; Criminal Information, United States v. Siemens AG, supra note 48, S7Tn amending the FCPA in 1988, Congress made clear that the business purpose element, and specifically the “retaining business” prong, was meant to be interpreted broadly: The Conferees wish to make clear that the reference to corrupt payments for “retaining business” in present law is not limited to the renewal of contracts or other business, but also includes a prohibition against corrupt payments related to the execution or performance of contracts or the carrying out of existing business, such as a payment toa foreign official for the purpose of obtaining more favorable tax treatment. The term should not, however, be construed so broadly as to include lobbying or other normal representations to government officials. H.R. Rep. No. 100-576, at 1951-52 (internal citations omitted). 8 See, £5 Complaint, SEC v. Panalpina, Inc., No. 10-cv-4334 (S.D. Tex. Noy. 4, 2010), ECF No. 1 [hereinafter SEC v. Panalpina, Inc.|, available at http ://www.sec.gov/litigation/complaints/20 10/comp2 1727.pdf; Criminal Information, United States v. Panalpina, Inc., No. 10-cr- 765 (S.D. Tex. Nov. 4, 2010), ECF No. 1 [hereinafter United States v. Panalpina, Inc. |, available at http ://wwwjustice.gov/ criminal/fraud/ fepa/ cases/ panalpina-inc/ 11-04- 10panalpina-info. pdf; Criminal Information, United States v. Panalpina World Transport (Holding) Ltd., No. 10-cr-769 (S.D. Tex. Nov. 4, 2010), ECF No. 1, available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/ panalpina- world/11-04- 10panalpina-world-info.pdf; see also Press Release, US. Sec. and Exchange Comm., SEC Charges Seven Oil Services and Freight Forwarding Companies for Widespread Bribery of Customs Officials (Nov. 4, 2010) (“The SEC alleges that the companies bribed customs officials in more than 10 countries in exchange for such perks as avoiding applicable customs duties on imported goods, expediting the importation of goods and equipment, extending drilling contracts, and lowering tax assessments. ), available at http ://www.sec.gov/ news/press/2010/2010-2 14.htm; Press Release, U.S. Dept. of Justice, Oil Services Companies anda Freight Forwarding Company Agree to Resolve Foreign Bribery Investigations and to Pay More Than $156 Million in Criminal Penalties (Nov. 4, 2010) (logistics provider and its subsidiary engaged in scheme to pay thousands of bribes totaling at least $27 million to numerous foreign officials on behalf of customers in oil and gas industry “to circumvent local rules and regulations relating to the import of goods and materials into numerous foreign jurisdictions”), available at http ://wwwjustice.gov/opa/pr/20 10/November/10- erm-1251.html. @ United States v. Kay, 359 F.3d 738, 755-56 (Sth Cir. 2004). ” Id. at 749. Indeed, the Kay court found that Congress’ explicit exclusion of facilitation payments from the scope of the FCPA was evidence that “Congress intended for the FCPA to prohibit ad/ other illicit payments that are intended to influence non-trivial official foreign action in an effort to aid in obtaining or retaining business for some person.” Jd. at 749-50 (emphasis added). 1 Td. at 750. ” Id, at 749-55. ? Td. at 756 (“Te still must be shown that the bribery was intended to produce an effect—here, through tax savings—that would ‘assist in obtaining or retaining business.”). 7 The FCPA does not explicitly define “corruptly, but in drafting the statute Congress adopted the meaning ascribed to the same term in the domestic bribery statute, 18 U.S.C. § 201(b). See H.R. Rep. No. 95-640, at 7. 5 The House Report states in full: ‘The word “corruptly” is used in order to make clear that the offer, payment, promise, or gift, must be intended to induce the recipient to misuse his official position; for example, wrongfully to direct business to the payor or his client, to obtain preferential legislation or regulations, or to induce a foreign official to fail to perform an official function. ‘The word “corruptly” connotes an evil motive or purpose such as that required under 18 US.C. 201(b) which prohibits domestic bribery. As in 18 US.C. 201(b), the word “corruptly” indicates an intent or desire wrongfully to influence the recipient. It does not require that the act [be] fully consummated or succeed in producing the desired outcome. Id. The Senate Report provides a nearly identical explanation of the meaning of the term: ‘The word “corruptly” is used in order to make clear that the offer, payment, promise, or gift, must be intended to induce the recipient to misuse his official position in order to wrongfully direct business to the payor or his client, or to obtain HOUSE_OVERSIGHT_022609

preferential legislation ora favorable regulation. ‘The word “corruptly” connotes an evil motive or purpose, an intent to wrongfully influence the recipient. S.Rep. No. 95-114, at 10. % See 15 US.C. §§ 78dd-1(a), 78dd-2(a), 78dd-3(a). 7 See, C85 Complaint, SEC v. Monsanto Co., No. 05-cv-14 (D.D.C. Jan. 6, 2005) (among other things, the company paid a $50,000 bribe to influence an Indonesian official to repeal an unfavorable law, which was not repealed despite the bribe), available at http://www.sec.gov/ litigation/ complaints/ comp19023. pdf; Criminal Information, United States v. Monsanto Co., No. 05-cr-8 (D.D.C. Jan. 6, 2005), available at http ://www.justice.gov/criminal/fraud/fcpa/cases/monsanto-co/0 1-06- O5monsanto-info.pdf. Jury instructions in FCPA cases have defined “corruptly” consistent with the definition found in the legislative history. See, e.g, Jury Instructions at 22-23, United States v. Esquenazi, supra note 44; Jury Instructions at 10, United States v. Green, supra note 44; Jury Instructions at 35, United States v. Jefferson, supra note 44; Jury Instructions at 25, United States v. Bourke, supra note 44; Jury Instructions at 17, United States v. Kay, supra note 44; Jury Instructions at 5, United States v. Mead, supra note 44, 79 See Complaint, SEC vy. Innospec, Inc., No. 10-cv-448 (D.D.C. Mar. 18, 2010), ECF No. 1 [hereinafter SEC v. Innospecl, available at http:// www.sec.gov/litigation/complaints/20 10/comp2 1454.pdf; Criminal Information at 8, United States v. Innospec Inc., No. 10-cr-61 (D.D.C. Mar. 17,2010), ECF No. 1 [hereinafter Uvited States v. Jnnospec], available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/innospec- inc/03-17- 10innospec-info.pdf. 80 See Complaint, SEC v. Innospec, supra note 79; Criminal Information, United States v. Innospec, supra note 79. 81 See 15 US.C. §§ 78dd-1(c)(2)(A), 78dd-2(g)(2)(A), and 78dd-3 (3)(2) @ Compare 15 U.S.C. § 78ff{(c)(1)(A) (corporate criminal liability under issuer provision) with § 78 fi{c)(2)(A) (individual criminal liability under issuer provision); compare 15 U.S.C. § 78dd-2(g)(1)(A) (corporate criminal liability under domestic concern provision) with § 78dd-2(g) (2)(A) (individual criminal liability under issuer provision); compare 15 US.C. § 78dd-3(e)(1)(A) (corporate criminal liability for territorial provision) with § 78dd-3(e)(2)(A) (individual criminal liability for territorial provision). However, companies still must act corruptly. See Section 30A(a), 15 U.S.C. § 78dd-1(a); 15 US.C. §§ 78dd-2(a), 78dd-3(a). 83 United States v. Kay, 513 F.3d 432, 448 (Sth Cir. 2007); see also Jury Instructions at 38, United States v. Esquenazi, supra note 44; Jury Instructions at 10, United States v. Green, supra note 44; Jury Instructions at 35, United States v. Jefferson, supra note 44; Jury Instructions at 25, United States v. Bourke, supra note 44; Jury Instructions at 5, United States v. Mead, supra note 44. * Bryan v. United States, 524 US. 184, 191-92 (1998) (construing “willfully” in the context of 18 U.S.C. § 924(a)(1)(A)) (quoting Ratzlaf v. United States, 510 US. 135, 137 (1994)); see also Kay, 513 E3d at 446- 51 (discussing Bryan and term “willfully” under the FCPA). @ Kay, 513 E3d at 447-48; Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders In Het Kapitaal Van Saybolt Int'l BV. v. Schreiber, 327 F.3d 173, 181 (2d Cir. 2003). 86'The phrase “anything of value” is not defined in the FCPA, but the identical phrase under the domestic bribery statute has been broadly construed to include both tangible and intangible benefits. See, £5 United States v. Moore, 525 F.3d 1033, 1048 (11th Cir. 2008) (rejecting defendant’s objection to instruction defining sex asa “thing of value? which “unambiguously covers intangible considerations”); United States v. Gorman, 807 F.2d 1299, 1304-05 (6th Cir. 1986) (holding that loans and promises of future employment are “things of value”); United States v. Williams, 705 F.2d 603, 622-23 (2d Cir. 1983) (approving jury instruction that stock could be a “thing of value” if defendant believed it had value, even though the shares had no commercial value, and noting that “[t]he phrase ‘anything of value’ in bribery and related statutes has consistently been given a broad meaning”). 87 Section 30A(a), 15 U.S.C. § 78dd-1(a); 15 U.S.C. §§ 78dd-2(a), 78dd- 3{a) (emphasis added). 88 Like the FCPA, the domestic bribery statute, 18 U.S.C. § 201, prohibits Endnotes giving, offering, or promising “anything of value.” Numerous domestic bribery cases under Section 201 have involved “small” dollar bribes. See, 6.85 United States v. Franco, 632 F.3d 880, 882-84 (Sth Cir. 2011) (affirming bribery convictions of inmate for paying correctional officer $325 to obtain cell phone, food, and marijuana, and noting that 18 US.C. § 201 does not contain minimum monetary threshold); United States v. Williams, 216 F.3d 1099, 1103 (D.C. Cir. 2000) (affirming bribery conviction for $70 bribe to vehicle inspector); United States v. Traitz, 871 F.2d 368, 396 (3rd Cir 1989) (affirming bribery conviction for $100 bribe paid to official of Occupational Health and Safety Administration); United States v. Hsieh Hui Mei Chen, 754 F.2d 817, 822 (9th Cir. 1985) (affirming bribery convictions including $100 bribe to immigration official); United States v. Bishton, 463 F.2d 887, 889 (D.C. Cir. 1972) (afirming bribery conviction for $100 bribe to division chief of District of Columbia Sewer Operations Division). 89 Complaint, SEC v. Daimler AG, supra note 48; Criminal Information, United States v. Daimler AG, supra note 48. 2» Complaint, SEC v. Halliburton Company and KBR, Inc., No. 09-cv- 399 (S.D. Tex. Feb. 11, 2009), ECF No 1 [hereinafter SEC v. Halliburton and KBR], available at http ://www.sec.gov/litigation/complaints/2009/ comp20897. pdf; Criminal Information, United States v. Kellogg Brown & Root LLC, No. 09-cr-71, ECF No. 1 (S.D. Tex. Feb. 6, 2009) [hereinafter United States v. KBR], available at hetp:/ /www.justice.gov/ criminal/fraud/ fepa/ cases/, kellogeb /02-06-09kbr-info. pdf. al Complaint, SEC v. Halliburton and KBR, supra note 90; Criminal Information, United States v. KBR, supra note 90. » See, 0.85 Complaint, SEC v. RAE Sys. Inc., No. 10-cy-2093 (D.D.c. Dec. 10, 2010), ECF No. 1 [hereinafter SEC v. RAE Sys., Ine] (fur coat, among other extravagant gifts), available at hetp:/ /www.sec.gov/ litigation/ complaints/ 2010/comp21770 pdf; Non-Pros. Agreement, In re RAE Sys. Inc. (Dec. 10, 2010) [hereinafter Iz re RAE Sys. Inc. (same), available at http ://www.justice.gov/ criminal/fraud/ fepa/ cases/ rae-systems/12-10-1 Orae-systems.pdf; Complaint, SEC v. Daimler AG, supra note 48 (armored Mercedes Benz worth €300,000); Criminal Information, United States v. Daimler AG, supra note 48 (same). 3 See Complaint, SEC v. ABB Ltd, No. 04-cv-1141 (D.D.C. July 6, 2004), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/ comp 18775.pdf; Criminal Information, United States v. ABB Vetco Gray Inc., et al., No. 04-cr-279 (S.D. Tex. June 22, 2004), ECF No. 1 [hereinafter United States v. ABB Vetco Gray], available at http ://wwwjustice.gov/criminal/fraud/fcpa/cases/abb/06-22- O4abbvetco-info.pdf. ms Complaint, SEC y. UTStarcom, Inc. No. 09-cv-6094 (N.D. Cal. Dec. 31, 2009), ECF No. 1 [hereinafter SEC v. UTStarcom), available at http://www.sec.gov/litigation/complaints/2009/comp2 1357.pdf; Non- Pros. Agreement, In re UTStarcom Inc. (Dec. 31, 2009) [hereinafter Jz re UTStarcom], available at http: //www.justice.gov/ criminal/fraud/ fepa/ cases/utstarcom-inc/ 12-3 1-09utstarcom-agree.pdf. 8 Complaint, SEC v. UTStarcom, supra note 94; Non-Pros. Agreement, Inve UTStarcom, supra note 94, % Complaint, SEC v. UTStarcom, supra note 94; Non-Pros. Agreement, Inve UTStarcom, supra note 94, EL Complaint, SEC v. Lucent Technologies Inc., No. 07-cv-2301 (D.D.c. Dec. 21, 2007), ECF No.1 [hereinafter SEC v. Lucent), available at http://www.sec.gov/litigation/complaints/2007/comp20414.pdf; Non- Pros. Agreement, In re Lucent Technologies (Noy. 14, 2007) [hereinafter Inve Lucent], available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/lucent-tech/11- 14-07lucent-agree.pdf. 28 Complaint, SEC v. Lucent, supra note 97; Non-Pros. Agreement, J re Lucent, supra note 97. » The company consented to the entry ofa final judgment permanently 108 HOUSE_OVERSIGHT_022610

109 enjoining it from future violations of the books and records and internal controls provisions and paid a civil penalty of $1,500,000. Complaint, SEC v. Lucent, supra note 97. Additionally, the company entered into a non-prosecution agreement with DOJ and paid a $1,000,000 monetary penalty. Non-Pros. Agreement, Jn re Lucent, supra note 97. 10 United States v. Liebo, 923 F.2d 1308, 1311 (8th Cir. 1991). '°! Judgment, United States v. Liebo, No. 89-cr-76 (D. Minn. Jan. 31, 1992), available at http ://wwwjustice.gov/criminal/fraud/fcpa/cases/ liebor/1992-01-3 1-liebor-judgment.pdf. 102 Complaint, SECy. Schering-Plough Corp., No, 04-cv-945 (D.D.c. June 9, 2004), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/comp 1 8740. pdf; Admin. Proceeding Order, In the Matter of Schering-Plough Corp., Exchange Act Release No. 49838 (June D5 2004) (finding that company violated FCPA accounting provisions and imposing $500,000 civil monetary penalty), available at hetp:/ /WWW.sec. gov/ litigation/ admin/34-49838.htm. "3 ECPA opinion procedure releases can be found at http://www. justice.gov/ criminal/fraud/ fepa/ . In the case of the company seeking to contribute the $1.42 million grant toa local MFI, DOJ noted that it had undertaken each of these due diligence steps and controls, in addition to others, that would minimize the likelihood that anything of value would be given to any officials of the Eurasian country. U.S. DEPT. OF JUSTICE, FCPA Op. RELEASE 10-02 (July 16, 2010), available at http://www. justice.gov/criminal/fraud/fcpa/opinion/20 10/1 002.pdf. '04US, DEPT. OF JUSTICE, FCPA Op. RELEASE 95-01 (Jan. 11, 1995), available at http ://www.justice.gov/criminal/fraud/fcpa/ opinion/1995/9501.pdf. 105 J. 106 FJ 107 US. DEPT. OF JUSTICE, FCPA Op. RELEASE 97-02 (Nov. 5, 1997), available at http ://wwwjustice.gov/criminal/fraud/fcpa/ opinion/1997/9702.pdf; U.S. Dept. oF Justice, FCPA Op. RELEASE 06-01 (Oct. 16, 2006), available at http ://www.justice.gov/criminal/ fraud/fepa/opinion/2006/060 1 pdf. 108 US. DEPT. OF JUSTICE, FCPA Op. RELEASE 06-01 (Oct. 16, 2006). 109 1 mi ‘1 See Section 30A(a)(1)-(3) of the Exchange Act, 15 US.C. § 78dd-1(a) (1)-(3); 15 US.C. §§ 78dd-2(a)(1)-(3), 78dd-3(a)(1)-(3). '? Section 30A(F)(1)(A) of the Exchange Act, 15 US.C. § 78dd-1(£) (1) (A); 15 US.C. §§ 78dd-2(h)(2)(A), 78dd-3(£)(2)(A). "3 Under the FCPA, any person “acting in an official capacity for or on behalf of” a foreign government, a department, agency, or instrumentality thereof, or a public international organization, isa foreign official. Section 30A(f)(1) (A), 15 US.C. § 78dd-1(£)(1)(A); 15 US.C. §§ 78dd-2(h) (2) (A), 78dd-2(f)(2)(A). See also U.S. DEPT. OF Justice, FCPA Op. RELEASE No. 10-03, at 2 (Sept. 1, 2010), available at http ://www.justice.gov/criminal/fraud/fcpa/opinion/20 10/ 1003.pdf (listing safeguards to ensure that consultant was not acting on behalf of foreign government). '4 But see Sections 30A(b) and £(3)(A) of the Exchange Act, 15 US.C. § 78dd-1(b) & (£)(3); 15 U.S.C. §§ 78dd-2(b) & (h)(4), 78dd-3(b) & (F) (4) (facilitating payments exception). ‘5 Even though payments to a foreign government may not violate the anti-bribery provisions of the FCPA, such payments may violate other US. laws, including wire fraud, money laundering, and the FCPA’s accounting provisions. This was the case in a series of matters brought by DOJ and SEC involving kickbacks to the Iraqi government through the United Nations Oil-for-Food Programme. See, é.¢., Complaint, SEC v. Innospec, supra note 79; Criminal Information, United States v. Innospec, supra note 79; Complaint, SEC v. Novo Nordisk A/S, No. 09-cv-862 (D.D.C. May 11, 2009), ECF No. 1, available at http://www.sec.gov/ litigation/ complaints/ 2009/comp21033. pdf; Criminal Information, United States v. Novo Nordisk A/S, No. 09-cr-126 (D.D.C. May 11, 2009), ECF No. 1, available at http://www.justice.gov/criminal/ fraud/fcpa/cases/nordiskn/05- 1 1-09novo-info.pdf; Complaint, SEC v. Ingersoll-Rand Company Ltd., No. 07-cv-1955 (D.D.C. Oct. 31, 2007), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/ 2007 / comp20353.pdf; Criminal Information, United States v. Ingersoll-Rand Traliana SpA, No. 07-cr-294 (D.D.C. Oct. 31, 2007), ECE No. 1, available at http ://www.justice.gov/criminal/fraud/fcpa/ cases/ ingerand-italiana/ 10-3 1-07ingersollrand-info. pdé; Complaint, SEC v. York Int'l Corp., No, 07-cv-1750 (D.D.C. Oct. 1, 2007), ECF No. 1 [hereinafter SEC v. York Int'l Corp.], available at http://wwwasec. gov/ litigation/ complaints/ 2007/comp2031 9.pdf; Criminal Information, United States v. York Int'l Corp., No. 07-cr-253 (D.D.C. Oct. 1, 2007), ECF No. 1 [hereinafter United States v. York Int'l Corp.|, available at http ://www.justice.gov/criminal/fraud/fcpa/cases/york/ 10-01 -O7york- info.pdf; Complaint, SEC yv. Textron Inc., No. 07-cv-1505 (D.D.C. Aug. 23, 2007), ECF No. 1 [hereinafter SEC v. Textron], available at http:// www.sec.gov /litigation/complaints/2007 /comp2025 L.pdf; Non-Pros. Agreement, In re Textron Inc. (Aug. 23, 2007), available at http: / / www. justice.gov/ criminal/fraud/ fcpa/ cases/textron-inc/08-21-07textron- agree.pdf. DOJ has issued opinion procedure releases concerning payments (that were, in essence, donations) to government agencies or departments. See U.S. DEPT. OF JUSTICE, FCPA Op. RELEASE 09-01 (Aug. 3, 2009) (involving donation of 100 medical devices to foreign government), available at http: //wwwjustice.gov / criminal/fraud/ fcpa/opinion/2009/0901.pdf; US. Dept. oF Justice, FCPA Op, RELEASE 06-01 (Oct. 16, 2006) (involving contribution of $25,000 to regional customs department to pay incentive rewards to improve local enforcement of anti-counterfeiting laws), available at http ://www.justice. gov/criminal/fraud/fcpa/opinion/2006/060 1 pdf. "6 The United States has some state-owned entities, like the Tennessee Valley Authority, that are instrumentalities of the government. Mc Carthy y. Middle Tenn. Elec. Membership Corp., 466 E3d 399, 411 n.18 (6th Cir. 2006) (“[T ]here is no question that TVA is an agency and instrumentality of the United States.”) (internal quotes omitted). "During the period surrounding the FCPA’s adoption, state-owned entities held virtual monopolies and operated under state-controlled price-setting in many national industries around the world. See generally WOoRLD BANK, BUREAUCRATS IN BusINEss: THE ECONOMICS AND POLITICS OF GOVERNMENT OWNERSHIP, WORLD BANK Poricy RESEARCH Report at 78 (1995); SUNITA KIKERI AND AISHETU KOLO, STATE ENTERPRISES, THE WORLD BANK GROUP (Feb. 2006), available at http // rru.worldbank.org/ documents/ publicpolicyjournal/ 304Kikeri_Kolo.pdf. "8 Td. at 1 (“[A]fter more than two decades of privatization, government ownership and control remains widespread in many regions—and in many parts of the world still dominates certain sectors.”). "9'To date, consistent with the approach taken by DOJ and SEC, all district courts that have considered this issue have concluded that this is an issue of fact fora jury to decide. See Order, United States v. Carson, 2011 WL 5101701, No. 09-cr-77 (C.D. Cal. May 18, 2011), ECF No. 373 [hereinafter United States v. Carson]; United States v. Aguilar, 783 FE Supp. 2d 1108 (C.D. Cal. 201 1); Order, United States v. Esquenazi, supra note 44, ECF No. 309; see also Order, United States v. O'Shea, No. 09-cr-629 (S.D. Tex. Jan. 3, 2012), ECF No. 142; Order, United States y. Nguyen, No. 08-cr-522 (E.D. Pa. Dec. 30, 2009), ECE No. 144. These district court decisions are consistent with the acceptance by district courts around the country of over 35 guilty pleas by individuals who admitted to violating the FCPA by bribing officials of state-owned or state-controlled entities. See Government's Opposition to Defendants’ Amended Motion to Dismiss Counts One Through Ten of the Indictment at 18, United States v. Carson, supra note 119, ECF No. 332; Exhibit I, United States v. Carson, supra note 119, ECF No. 335 (list of examples of enforcement actions based on foreign officials of state-owned entities). ?°Tury Instructions, United States v. Esquenazi, supra note 44, ECF No. 520; Order at 5 and Jury Instructions, United States v. Carson, supra note 119, ECF No. 373 and ECF No. 549; Aguilar, 783 F. Supp. 2d at 1115. 21 Criminal Information, United States v. C.E. Millier Corp., et al., No. 82-cr-788 (C.D. Cal. Sept. 17, 1982), available at http://www. justice.gov/criminal/fraud/fcpa/cases/ce-miller/ 1982-09-17-ce-miller- information. pdf. 22 See Complaint, SEC v. Sam P, Wallace Co., Inc., et al, No. 81-cv- 1915 (D.D.C. Aug. 31, 1982); Criminal Information, United States v. Sam P. Wallace Co., Inc., No. 83-cr-34 (D.B.R. Feb. 23, 1983), available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/sam-wallace- company/ 1983-02-23-sam-wallace-company-information.pdf; see also Criminal Information, United States v. Goodyear Int'l Corp., No. 89- cr-156 (D.D.C. May 11, 1989) (Iraqi Trading Company identified as “instrumentality of the Government of the Republic of Iraq”), available at http ://wwwjustice.gov/criminal/fraud/fcpa/cases/goodyear/ 1989- HOUSE_OVERSIGHT_022611

05-1 1-goodyear-information.pdf. 23 See Complaint, SEC v. ABB, supra note 48; Criminal Information at 3, United States v. ABB Inc., No. 10-cr-664 (S.D. Tex. Sept. 29, 2010), ECF No. 1 [hereinafter United States v. ABB), available at http:// wwwjustice.gov/criminal/fraud/fcpa/cases/abb/09-20- 10abbinc-info. pdé; Constitucién Politica de los Estados Unidos Mexicanos [C.P.], as amended, art. 27, Diario Oficial de la Federacién [DO], 5 de Febrero de 1917 (Mex.); Ley Del Servicio Publico de Energia Electrica, as amended, art. 1-3, 10, Diario Oficial de la Federacién [DO], 22 de Diciembre de 1975 (Mex.). 24 See Indictment at 2, United States v. Esquenazi, supra note 44, ECF No. 3; Affidavit of Mr. Louis Gary Lissade at 1-9, id., ECF No. 417-2. 5 Criminal Information at 30-31, United States v. Alcatel-Lucent France, supra note 56, ECF No. 10. 126 Td. 7 See International Anti-Bribery and Fair Competition Act of 1998, Pub. L. 105-366 § 2, 112 Stat. 3302, 3303, 3305, 3308 (1998). 8 Section 30A(F)(1)(B) of the Exchange Act, 15 U.S.C. § 78dd-1(£) (1) (B); 15 US.C. §§ 78dd-2(h) (2)(B), 78dd-3 (f)(2)(B). ' Third parties and intermediaries themselves are also liable for FCPA violations. Section 30A (a) of the Exchange Act, 15 U.S.C. § 78dd-1(a); 15 US.C. §§ 78dd-2(a), and 78dd-3(a). @ Section 30A(a)(3) of the Exchange Act, 15 U.S.C. § 78dd-1 (a) (3); 15 US.C. §§ 78dd-2(a) (3), 78dd-3(a)(3). BI See, CL5 Complaint, SEC v. Johnson & Johnson, No. 11-cv-686 (D.D.C. Apr. 8, 2011) [hereinafter SEC v. Johnson & Johnson| (bribes paid through Greek and Romanian agents)), available at http: //wwwssec. gov/ litigation/ complaints/ 2011/comp21922. pdf; ; Criminal Information, United States v. DePuy, Inc., No. 11-cr-99 (D.D.c. Apr. 8, 201 1), ECF No. 1 [hereinafter United States v. DePuy] (bribes paid through Greek agents), available at http ://www.justice.gov/ criminal/fraud/ fepa/ cases/ depuy-inc/ 04-08-1 Idepuy-info.pdf; Complaint, SEC v. ABB, supra note 48 (bribes paid through Mexican agents); Criminal Information, United States v. ABB, supra note 123 (same); Criminal Information, United States v. Int’l Harvester Co., No. 82-cr-244 (S.D. Tex. Nov. 17, 1982) (bribes paid through Mexican agent), available at hetp:/ /www.justice. gov/ criminal/fraud/ fcpa/ cases/international-harvester/1982-11-17- international-harvester-information. pdf. 132 See Criminal Information, United States v. Marubeni Corp., No. 12- cr-22 (S.D. Tex. Jan. 17, 2012), ECF No. 1 [hereinafter United States v. Marubeni\, available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/marubeni/2012-01- 17-marubeni-information.pdf; Criminal Information, United States v. ]GC Corp., supra note 60, ECF No. 1; Criminal Information, United States v. Snamprogetti, supra note 60, ECF No. 1; Complaint, SEC v. ENI, S.p.A. and Snamprogetti Netherlands BV., No. 10-cv-2414 (S.D. Tex. July 7, 2010), ECF No. 1, available at http ://www.sec.gov/litigation/complaints/20 10/comp-pr2010-1 19.pdf; Criminal Information, United States v. Technip S.A., No. 10-cr-439 (S.D. ‘Tex. June 28, 2010), ECF No. 1 [hereinafter United States v. Technip|, available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/ technip- sa/06-28- 10-technip-%20information.pdf; Complaint, SEC v. Technip, No. 10-cv-2289 (S.D. Tex. June 28, 2010), ECF No. 1 [hereinafter SEC v. Technip|, available at http ://www.sec.gov/litigation/complaints/20 10/ comp-pr2010-1 10.pdf; Indictment, United States v. Tesler, supra note 50; Complaint, SEC v. Halliburton and KBR, supra note 90; Criminal Information, United States v. KBR, supra note 90; Criminal Information, United States v. Stanley, No. 08-cr-597 (S.D. Tex. Sept. 3, 2008), ECF No. 1, available at http ://justice.gov/ criminal/fraud/ fepa/ cases/, stanleya/ 08- 29-08stanley-info.pdf. 133 See Criminal Information, United States v. AGA Medical Corp., No. 08-cr-172, ECF No. 1 (D. Minn. June 3, 2008), available at http://www. justice.gov/criminal/fraud/fepa/cases/agamedcorp/06-03-08aga-info. df. ta Complaint, SEC v. Innospec, supra note 79; Criminal Information, United States v. Innospec, supra note 79; Superseding Criminal Information, United States v. Naaman, supra note 50, ECF No. 15, available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/ naamano/06-24- 10naaman-supsersed-info.pdf; Complaint, SEC v. Turner, supra note 50. '5 See sources cited supra note 68. 138 See sources cited supra note 68, '87 Section 30A(a)(3) of the Exchange Act, 15 U.S.C. § 78dd-1 (a) (3); 15 Endnotes US.C. §§ 78dd-2(a)(3), 78dd-3(a) (3). 88 See Section 30A(f)(2)(A) of the Exchange Act, 15 US.C. § 78dd-1(f) (2) (A); 15 US.C. §§ 78dd-2(h)(3)(A), 78dd-3(£)(3) (A). 8? See Section 30A(f)(2)(B) of the Exchange Act, 15 US.C. § 78dd-1(F) (2)(B); 15 US.C. §§ 78dd-2(h)(3)(B), 78dd-3(£)(3)(B). The “knowing” standard was intended to cover “both prohibited actions that are taken with ‘actual knowledge’ of intended results as well as other actions that, while falling short of what the law terms ‘positive knowledge; nevertheless evidence a conscious disregard or deliberate ignorance of known circumstances that should reasonably alert one to the high probability of violations of the Act.” H.R. Rep. No. 100-576, at 920; see also Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100- 418, § 5003, 102 Stat. 1107, 1423-24 (1988). MOHLR. Rep. No. 100-576, at 920 (1988). 1 Section 30A(c)(1) of the Exchange Act, 15 US.C. § 78dd-1(c) (1); 15 US.C. §§ 78dd-2(c)(1), 78dd-3(c)(1). “HR. Rep. No. 100-576, at 922. The conferees also noted that “[i]n interpreting what is lawful under the written laws and regulations’ ... the normal rules of legal construction would apply.” Jd. 143 See United States v. Kozeny, 582 FE Supp. 2d 535, 537-40 (S.D.NY. 2008). Likewise, the court found that a provision under Azeri law that relieved bribe payors of criminal iability if they were extorted did not make the bribe payments legal. Azeri extortion law precludes the prosecution of the payor of the bribes for the illegal payments, but it does not make the payments legal. Jd. at 540-41. “Section 30A(c)(2)(A), (B) of the Exchange Act, 15 US.C. § 78dd-1(c) (2); 15 US.C. §§ 78dd-2(c) (2), 78dd-3(c)(2). 145 For example, the Eighth Circuit Court of Appeals found that providing airline tickets to a government official in order to corruptly influence that official may form the basis for a violation of the FCPA’s anti-bribery provisions. See Liebo, 923 F.2d at 1311-12. M46 See generally US. DEPT. OF JUSTICE, FCPA Op. RELEASE 11-01 (June 30, 2011) (travel, lodging, and meal expenses of two foreign officials for two-day trip to United States to learn about services of US. adoption service provider), available at http ://www.justice.gov/ criminal/ fraud/fepa/opinion/20 11/1 1-01.pdf; US. DEPT. OF JUSTICE, FCPA Op. RELEASE 08-03 (July 11, 2008) (stipends to reimburse minimal travel expenses of local, government-afhiliated journalists attending press conference in foreign country), available at http: //wwwjustice.gov/ criminal /fraud/fcpa/opinion/2008/0803.pdf; US. DEPT. OF JUSTICE, FCPA Op, RELEASE 07-02 (Sept. 11, 2007) (domestic travel, lodging, and meal expenses of six foreign officials for six-week educational program), available at http: //www.justice.gov/ criminal/fraud/ fepa/ opinion/2007/0702.pdf; US. Dept. oF JusTICE, FCPA Op. RELEASE 07-01 (July 24, 2007) (domestic travel, lodging, and meal expenses of six foreign officials for four-day educational and promotional tour of US. company’s operations sites), available at http://www.justice. gov/criminal/fraud/fcpa/opinion/2007/070 1 pdf; US. DEPT. OF Justice, FCPA Op. RELEASE 04-04 (Sept. 3, 2004) (travel, lodging, and modest per diem expenses of five foreign officials to participate in nine-day study tour of mutual insurance companies), available at http://wwwjustice.gov/criminal/fraud/fepa/opinion/2004/0404. pdf; US. Derr. oF Justice, FCPA Op. RELEASE 04-03 (June 14, 2004) (travel, lodging, meal, and insurance expenses for twelve foreign officials and one translator on ten-day trip to three US. cities to meet with US. public sector officials), available at http://wwwjustice.gov/ criminal /fraud/fcpa/opinion/2004/0403.pdf; US. DEPT. OF JUSTICE, FCPA Op. RELEASE 04-01 (Jan. 6, 2004) (seminar expenses, including receptions, meals, transportation and lodging costs, for one-and-a-half day comparative law seminar on labor and employment law in foreign country), available at http ://www.justice.gov/ criminal/fraud/ fepa/ HOUSE_OVERSIGHT_022612

111 opinion/2004/0401.pdf; US. Dept. oF Justice, FCPA Op. RELEASE 96-01 (Nov. 25, 1996) (travel, lodging, and meal expenses of regional government representatives to attend training courses in United States), available at http: //wwwjustice.gov/ criminal/fraud/ fepa/ opinion/ 1996/9601 .pdf; US. Dept. oF Justice, FCPA Op. RELEASE 92-01 (Feb. 1992) (training expenses so that foreign officials could effectively perform duties related to execution and performance of joint- venture agreement, including seminar fees, airfare, lodging, meals, and ground transportation), available at http ://www.justice.gov/ criminal/ fraud/fcpa/review/ 1992/r9201 pdf. 47 US, DEPT. OF JUSTICE, FCPA Op, RELEASE 11-01 (June 30, 2011); US. Dept. oF JusTIcE, FCPA Op. RELEASE 07-02 (Sept. 11, 2007); US. Dept. oF JusTICE, FCPA Op, RELEASE 07-01 (July 24, 2007); US. Dept. oF JusTICE, FCPA Op. RELEASE 04-04 (Sept. 3, 2004); US. Dept. oF Justice, FCPA Op. RELEASE 04-03 (June 14, 2004); US. Dept. oF JusTICcE, FCPA Op. RELEASE 04-01 (Jan. 6, 2004). 48 US, Dept. oF Justice, FCPA Op. RELEASE 96-01 (Nov. 25, 1996). ‘US, Dept. oF JUSTICE, FCPA Op. RELEASE 11-01 (June 30, 201 1); US. Dept. oF Justice, FCPA Op. RELEASE 07-02 (Sept. 11, 2007); US. DEPT. oF JusTICE, FCPA Op, RELEASE 07-01 (July 24, 2007); US. Dept. oF JUSTICE, FCPA Op. RELEASE 04-04 (Sept. 3, 2004); US. Dept. oF JusTICE, FCPA Op. RELEASE 04-01 (Jan. 6, 2004) . S9US. DEPT. OF JUSTICE, FCPA Op, RELEASE 04-01 (Jan. 6, 2004). ‘51 US, DEPT. OF JUSTICE, FCPA Op, RELEASE 08-03 (July 11, 2008). 'S US, DEPT. OF JUSTICE, FCPA Op. RELEASE 11-01 (June 30, 2011); US. Dept. oF Justice, FCPA Op, RELEASE 92-01 (Feb. 1992). ‘83 US, DEPT. OF JUSTICE, FCPA Op, RELEASE 08-03 (July 11, 2008). 154 Fy 'S5 Id; US. DEPT. OF JusTICE, FCPA Op, RELEASE 04-03 (June 14, 2004); U.S. Dept. oF Justice, FCPA Op. RELEASE 04-01 (Jan. 6, 2004); U.S. Dept. oF Justice, FCPA Op, RELEASE 07-01 (July 24, 2007). ‘S°US, DEpT. OF JUSTICE, FCPA Op, RELEASE 11-01 (June 30, 2011); US. Dept. oF JusTICE, FCPA Op. RELEASE 07-02 (Sept. 11, 2007); US. Dept. oF Justice, FCPA Op, RELEASE 07-01 (July 24, 2007); US. DEPT. oF JusTICE, FCPA Op. RELEASE 04-04 (Sept. 3, 2004); US. Dept. oF Justice, FCPA Op. RELEASE 04-03 (June 14, 2004); US. Dept. oF JUSTICE, FCPA Op. RELEASE 04-01 (Jan. 6, 2004). ‘87 US, DEPT. OF JUSTICE, FCPA Op, RELEASE 07-01 (July 24, 2007); US. Dept. oF JusTICE, FCPA Op, RELEASE 08-03 (July 11, 2008). 158 For example, DOJ has previously approved expenditures on behalf of family members or for entertainment purposes under certain, limited circumstances. See, e.g, U.S. DEPT. OF JUSTICE, FCPA REv. P. RELEASE 83-02 (July 26, 1983) (declining to take enforcement action against company seeking to provide promotional tour for foreign official and wife, where both had already planned a trip to the United States at their own expense and company proposed to pay only for all reasonable and necessary actual domestic expenses for the extension of their travel to allow the promotional tour, which would not exceed $5,000), available at http ://www.justice.gov/criminal/fraud/fcpa/review/ 1983/r8302.pdf. 159 Unlike the local law and bona fide expenditures defenses, the facilitating payments exception is not an affirmative defense to the FCPA. Rather, payments of this kind fall outside the scope of the FCPA’s bribery prohibition. Prior to 1988, the “facilitating payments” exception was incorporated into the definition of “foreign official? which excluded from the statute's purview officials whose duties were primarily ministerial or clerical. See Foreign Corrupt Practices Act of 1977, Pub. L. No. 95-213, § 104(d)(2), 91 Stat. 1494, 1498 (1977) (providing that the term foreign official “does not include any employee ofa foreign government or any department, agency, or instrumentality thereof whose duties are essentially ministerial or clerical”). The original exception thus focused on the duties of the recipient, rather than the purpose of the payment. In practice, however, it proved difficult to determine whether a foreign official's duties were “ministerial or clerical.” §. REp. No. 100- 85, at 53. Responding to criticism that the statutory language “does not clearly reflect Congressional intent and the boundaries of the prohibited conduct.’ Congress revised the FCPA to define the exception in terms of the purpose of the payment. H. Rep. No. 100-40, pt. 2, at 77. In doing sO, Congress reiterated that while its policy to exclude facilitating payments reflected practical considerations of enforcement, “such payments should not be condoned.” /d. The enacted language reflects this narrow purpose. 10 Ty exempting facilitating payments, Congress sought to distinguish them as “payments which merely move a particular matter toward an eventual act or decision or which do not involve any discretionary action,” giving the examples of “a gratuity paid to a customs official to speed the processing of a customs document” or “payments made to secure permits, licenses, or the expeditious performance of similar duties of an essentially ministerial or clerical nature which must of necessity be performed in any event.” H.R. Rep. No. 95-640, at 8. 6! Section 30A(£)(3)(B) of the Exchange Act, 15 US.C. § 78dd-1(f)(3) (B); 15 US.C. §§ 78dd-2(h) (4) (B), 78dd-3(F)(4)(B). 182 Ty a 2004 decision, the Fifth Circuit emphasized this precise point, commenting on the limited nature of the facilitating payments exception: A brief review of the types of routine governmental actions enumerated by Congress shows how limited Congress wanted to make the grease exceptions. Routine governmental action, for instance, includes “obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country,” and “scheduling inspections associated with contract performance or inspections related to transit of goods across country.” ‘Therefore, routine governmental action does not include the issuance of every official document or every inspection, but only (1) documentation that qualifies a party to do business and (2) scheduling an inspection—very narrow categories of largely non- discretionary, ministerial activities performed by mid- or low-level foreign functionaries. United States v. Kay; 359 F.3d 738, 750-51 (5th Cir. 2004) (internal footnote omitted) (emphasis in original). 163 Nlon-Pros. Agreement, In re Helmerich & Payne, Inc. (July 29, 2009) [hereinafter Iz re Helmerich & Payne] , available at http: //wwwejustice. gov/ criminal/fraud/ fepa/ cases/ helmerich-payne/ 06-29-09helmerich- agree.pdf; Admin. Proceeding Order, In the Matter of Helmerich & Payne, Inc., Exchange Act Release No. 60400 (July 30, 2009) [hereinafter In the Matter of Helmerich & Payne] , available at http ://www.sec.gov/ litigation/ admin/2009/34-60400. pdf. 164 Criminal Information, Vetco Gray Controls Inc., e¢ al, No. 07- cr-4 No. (S.D. Tex. Jan. 5, 2007), ECF Nos. 1-2, available at hetp:// www.justice.gov/ criminal/fraud/ fcpa/ cases/vetco-controls/02-06- 07vetcogray-info.pdf. 1s Complaint, SEC v. Noble Corp., No. 10-cv-4336 (S.D. Tex. Nov. 4, 2010), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/20 10/comp2 1728.pdé; Non-Pros. Agreement, In re Noble Corp. (Nov. 4, 2010), available at http ://wwwjustice.gov/criminal/ fraud/fcpa/cases/noble-corp/ 11-04-10noble- corp -npa.pdf; see also sources cited supra note 68. ‘66 Working Group on Bribery, 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions, at § V1 (recommending countries should periodically review their policies and approach to facilitation payments and should encourage companies to prohibit or discourage facilitation payments “in view of the corrosive effect of small facilitation payments, particularly on sustainable economic development and the rule of law”); Working Group on Bribery, United States: Phase 3, at 24 (Oct. 15, 2010), available at http ://www.oecd.org/dataoecd/ 10/49/46213841. pdf (commending United States for steps taken in line with 2009 recommendation to encourage companies to prohibit or discourage facilitation payments). ie? Facilitating payments are illegal under the U.K. Bribery Act 2010, which came into force on July 1, 2011, and were also illegal under prior UK. legislation. See Bribery Act 2010, ¢.23 (Eng,), available at http ff wwwilegislation.gov.uk/ ukpga/ 2010/23/contents; see also UK. Ministry OF JustTIcE, The Bribery Act 2010: Guidance About Procedures Which Relevant Commercial Organisations Can Put into Place to Prevent Persons Associated with Them from Bribing (Section 9 of the Bribery Act 201 0), at 18 (2011), available at http ://wwwjustice.govuk/ guidance/ docs/ bribery-act-20 10-guidance. pdf. 188 See, e.g, Non-Pros. Agreement, [n re Helmerich & Payne, supra note 163; Admin. Proceeding Order, In the Matter of Helmerich & Payne, supra note 163, 169 Tn order to establish duress or coercion, a defendant must demonstrate that the defendant was under unlawful, present, immediate, and HOUSE_OVERSIGHT_022613

impending threat of death or serious bodily injury; that the defendant did not negligently or recklessly create a situation where he would be forced to engage in criminal conduct (e.g. had been making payments as part of an ongoing bribery scheme); that the defendant had no reasonable legal alternative to violating the law; and that there was a direct causal relationship between the criminal action and the avoidance of the threatened harm. See Eleventh Circuit Pattern Jury Instr., Special Instr. No. 16 (2003); see adso Fifth Circuit Pattern Jury Instr. No. 1.36 (2001); Sixth Circuit Pattern Jury Instr. No. 6.05 (2010); Seventh Circuit Pattern Jury Instr. No. 6.08 (1998); Ninth Circuit Pattern Jury Instr. No. 6.5 (2010); 1A Kevin F. O'Malley, Jay E. Grenig, Hon. William C. Lee, Federal Jury Practice and Instructions § 19.02 (6th ed. 2008 & Supp. 2012). 1S, Rep. No. 95-114, at 11. 1 Td. at 10. 2 Td. at 11. 13 United States v. Kozeny, 582 FE. Supp. 2d 535, 540 n.31 (S.D.NY. 2008). "4 Kozeny, 582 FE, Supp. 2d at 540 (citing S. Rep. No. 95-114, at 10-11). 175 J ‘6 These payments, however, must be accurately reflected in the company’s books and records so that the company and its management are aware of the payments and can assure that the payments were properly made under the circumstances. For example, in one instance, a Kazakh immigration prosecutor threatened to fine, jail, or deport employees ofa US. company’s subsidiary. Believing the threats to be genuine, the employees in Kazakhstan sought guidance from senior management of the US. subsidiary and were authorized to make the payments. The employees then paid the government official a total of $45,000 using personal funds. The subsidiary reimbursed the employees, but it falsely recorded the reimbursements as “salary advances” or “visa fines.” The parent company, which eventually discovered these payments, as well as other improperly booked cash payments made to a Kazakhstani consultant to obtain visas, was charged with civil violations of the accounting provisions. Admin. Proceeding Order, In the Matter of NATCO Group Inc., Exchange Act Release No. 61325 (Jan. 11, 2010), available at http ://www.sec.gov/litigation/admin/20 10/34-6 1325.pdf (imposing cease-and-desist order and $65,000 civil monetary penalty). ar See Jury Instructions at 21, United States v. Aguilar, No. 10-cr-1031 (C.D. Cal. May 16, 2011), ECF No. 511. "8 See, 6.8.5 Pacific Can Co. v. Hewes, 95 F.2d 42, 46 (9th Cir. 1938) (“Where one corporation is controlled by another, the former acts not for itself but as directed by the latter, the same as an agent, and the principal is liable for the acts of its agent within the scope of the agent's authority.”); United States v. NYNEX Corp., 788 EF. Supp. 16, 18 n.3 (D.D.C. 1992) (holding that “[a] corporation can of course be held criminally liable for the acts of its agents,” including “the conduct of its subsidiaries.”). '? Pacific Can Co. 95 F.2d at 46; NYNEX Corp., 788 F. Supp. at 18 n.3. 1 See, 6.8.5 Standard Oil Co. v. United States, 307 F.2d 120, 127 (Sth Cir. 1962). 181 Admin. Proceeding Order, In the Matter of United Industrial Corp., Exchange Act Release No. 60005 (May 29, 2009), available at hetp:// www.sec.gov/litigation/admin/2009/34-60005.pdf; see also Lit. Release No. 21063, SEC v. Worzel (May 29, 2009), available at hetp://www.sec. gov/ litigation/ litreleases/2009/Ir2 1063 htm. @ See, 6.8.5 Philip Urofksy, What You Don’t Know Can Hurt You: Successor Liability Resulting From Inadequate FCPA Due Diligence in M@A Transactions, 1763 PLI/Corp. 631, 637 (2009) (“As a legal matter, when one corporation acquires another, it assumes any existing liabilities of that corporation, including liability for unlawful payments, regardless of whether it knows of them.”). Whether or not successor liability applies to a particular corporate transaction depends on the facts involved and state, federal, and, potentially, foreign law. 183 See, 6.8.5 Carolyn Lindsey, More Than You Bargained for: Successor Liability Under the U.S. Foreign Corrupt Practices Act, 35 OHIO NLU. L. REv. 959, 966 (2009) (“Allowing a company to escape its debts and liabilities by merging with another entity is considered to lead to an unjust result.”). 184 See, CL5 Melrose Distillers, Inc. v. United States, 359 U.S. 271, 274 (1959) (affirming criminal successor liability for antitrust violations); United States v. Alamo Bank of Texas, 880 F.2d 828, 830 (5th Cir. 1989) Endnotes (affirming criminal successor liability for Bank Secrecy Act violations); United States v. Polizzi, 500 F.2d 856, 907 (9th Cir. 1974) (affirming criminal successor liability for conspiracy and Travel Act violations); United States v. Shields Rubber Corp., 732 F. Supp. 569, 57 1-72 (W.D. Pa. 1989) (permitting criminal successor liability for customs violations); see also United States v. Mobile Materials, Inc., 776 F.2d 1476, 1477 (10th Cir. 1985) (allowing criminal post-dissolution liability for antitrust, mail fraud, and false statement violations);. 185) Complaint, SEC v. The Titan Corp., No. 05-cv-411 (D.D.C, Mar. 1, 2005) (discovery of FCPA violations during pre-acquisition due diligence protected potential acquiring company and led to termination of merger agreement), available at http ://www.sec.gov/ litigation/ complaints/ comp 19107.pdf; Criminal Information, United States v. Titan Corp., No. 05-cr-314 (S.D. Cal. Mar. 1, 2005) (same) [hereinafter United States v. Titan Corp.], available at http ://wwwjustice.gov/criminal/fraud/fcpa/ cases/titan-corp/03-01 -O5titan-info.pdf. 186 For a discussion of declinations, see Chapter 7. 187 See Complaint, SEC v. El Paso Corp., No, 07-cv-899 (S.D.NW. Feb. 7, 2007), ECF No. 1 [hereinafter SEC v. El Paso Corp.] (charging company with books and records and internal controls charges for improper payments to Iraq under UN. Oil-for-Food Programme), available at http://www.sec.gov/litigation/complaints/2007/comp 19991 pdf. 188 Complaint, SEC vy. Alliance One Int’l, Inc., No. 10-cv-1319 (D.D.C. Aug, 6, 20 10), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/20 10/comp21 61 8-alliance-one.pdf; Non-Pros. Agreement, In re Alliance One Int'l, Inc. (Aug. 6, 2010), available at hetp:/ / www. justice.gov/criminal/fraud/fcpa/cases/alliance-one/08-06- 10alliance- one-npa.pdf; Criminal Information, United States v. Alliance One Int'l AG, No. 10-cr-17 (W.D. Va. Aug. 6, 2010), ECF No. 3, available at http://wwwjustice.gov/criminal/fraud/fepa/cases/alliance-one/08-06- 10alliance-one-info.pdf; Criminal Information, United States v. Alliance One Tobacco Osh, LLC, No. 10-cr-16 (W.D. Va. Aug. 6, 2010), ECF No. 3, available at http ://www justice.gov/criminal/fraud/fcpa/cases/ alliance-one/08-06- 10alliance-one-tobaccoinfo.pdf. 189 See Criminal Information, United States v. Syncor ‘Taiwan, Inc., No. 02-cr-1244 (C.D. Cal. Dec. 5, 2002), ECF No. 1, available athttp:// www.justice.gov/ criminal/fraud/ fcpa/ cases/syncor-taiwan/12-05- 02syncor-taiwan-info.pdf; Plea Agreement, United States v. Syncor ‘Taiwan, Inc., No. 02-cr-1244 (C.D. Cal. Dec. 9, 2002), ECF No. 14, available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/syncor- taiwan/ 12-03-02syncor-taiwan-plea-agree.pdf. 199 See Complaint, SEC v, Syncor Int'l Corp., No. 02-cv-2421 (D.D.C. Dec. 10, 2002), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/comp 17887.htm; SEC v. Syncor International Corp., SEC Lit. Rel. 17997, (Dec. 10, 2002), available at http://www.sec.gov/ litigation/litreleases/lr17887 htm. 191 See Complaint, SEC v. York Int'l Corp., supra note 115; Criminal Information, United States v. York Int'l Corp., supra note 115. 192 See Criminal Information, United States v. Latin Node, Inc., No. 09-cr-20239 (S.D. Fla. Mar. 23, 2009), ECF No. 1, available at http:// www,justice.gov/criminal/fraud/fcpa/cases/litton-ap plied/03-23- 09latinnode-info.pdf; eLandia Int'l Inc., Annual Report (Form 10-K), at 20 (Apr. 2, 2009), available at http://www.sec.gov/Archives/edgar/ data/1352819/000119312509070961/d10k.htm. 193 See Criminal Information, United States v. Salvoch, No. 10-cr-20893 (S.D. Fla. Dec. 17, 2010), ECF No. 3, available at http://www.justice. gov/criminal/fraud/fcpa/cases/salvoch/ 12-17- 10salvoch-info.pdf; Criminal Information, United States v. Vasquez, No. 10-cr-20894 (S.D. Fla. Dec. 17, 2010), ECF No. 3, available at http://www.justice.gov/ criminal /fraud/fcpa/cases/vasquezjp/ 12-17- 10vasquez-juan-info.pdf; Indictment, United States v. Granados, et al., No. 10-cr-20881, (S.D. HOUSE_OVERSIGHT_022614

113 Fla. Dec. 14, 2010), ECF No. 3, available at http://wwwjustice.gov/ criminal/fraud/fcpa/cases/granados-jorge/ 12-21- 10granados-indict.pdf. 194 See Deferred Pros. Agreement, United States v. Snamprogetti, supra note 60, ECF No. 3, available at hetp://www.justice.gov/criminal/fraud/ fcpa/cases/snamprogetti/07-07- 10snamprogetti-dpa.pdf. ' Compare Criminal Information, United States v. Snamprogetti, supra note 60, with Deferred Pros. Agreement, United States v. Snamprogetti, supra note 60, ECF No. 3. 19% See Press Release, General Electric Co., General Electric Agrees to Acquire InVision (Mar. 15, 2004), available at http://www.ge.com/files/ usa/company/investor/ downloads/ sharpeye_press_release. pdf; Press Release, US. Dept. of Justice, InVision Tech. Inc. Enters into Agreement with the United States (Dec. 6, 2004), available at http://www.justice. gov/opa/pr/2004/December/04_crm_780.htm; Company News; GLE. Gets InVision, a Maker of Bomb Detectors, N.Y. TIMES, Dec. 7, 2004, at C4. "7 Non-Pros. Agreement, In re InVision (Dec. 3, 2004), available at http ://www.justice.gov/criminal/fraud/fcpa/cases/invision-tech/ 12-03- O4invisiontech-agree.pdf; Non-Pros. Agreement, In re General Elec. Co., (Dec. 3, 2004), available at http ://www justice.gov/criminal/fraud/fcpa/ cases/invision-tech/ 12-03-04invisiontech-agree-ge.pdf; Complaint, SEC y. GE InVision, Inc., f/k/a InVision Technologies, Inc., No. 05-cv-660, (N.D. Cal. Feb. 14, 2005), ECF No. 1, available at http://www.sec.gov/ litigation/ complaints/ comp19078. pdf. 198 See U.S. DEPT. OF JUSTICE, FCPA Op, RELEASE 08-02 (June 13, 2008), available at http ://www.justice.gov/criminal/fraud/fcpa/ opinion/2008/0802.pdf; see also Press Release, US. Dept. of Justice, Pfizer H.C.P. Corp. Agrees to Pay $15 Million Penalty to Resolve Foreign Bribery Investigation (Aug. 7, 2012) (“In the 18 months following its acquisition of Wyeth, Pfizer Inc., in consultation with the department, conducted a due diligence and investigative review of the Wyeth business operations and integrated Pfizer Inc.s internal controls system into the former Wyeth business entities. The department considered these extensive efforts and the SEC resolution in its determination not to pursue a criminal resolution for the pre-acquisition improper conduct of Wyeth subsidiaries.”), available at http ://www.justice.gov/opa/pr/2012/ August/12-crm-980.html. 18 US.C. § 2. 2° Tn enacting the FCPA in 1977, Congress explicitly noted that “(t]he concepts of aiding and abetting and joint participation would apply toa violation under this bill in the same manner in which those concepts have always applied in both SEC civil actions and in implied private actions brought under the securities laws generally.” H.R. Rep. No. 95-640, at 8. °°! Pinkerton held that a conspirator may be found guilty of a substantive offense committed by a co-conspirator in furtherance of the conspiracy if the co-conspirator'’s acts were reasonably foreseeable. See Pinkerton v. United States, 328 U.S. 640, 647-48 (1946). 202 See United States v. MacAllister, 160 F.3d 1304, 1307 (11th Cir. 1998); United States v. Winter, 509 F.2d 975, 982 (Sth Cir. 1975). 203 See Criminal Information, United States v. Marubeni, supra note 132; Criminal Information, United States v. JGC Corp., supra note 60; Criminal Information, United States v. Snamprogetti, supra note 60; see also Criminal Information, United States v. Technip, supra note 132. 204 Section 20(e) of the Exchange Act, “Prosecution of Persons Who Aid and Abet Violations,” explicitly provides that, for purposes ofa civil action seeking injunctive relief or a civil penalty, “any person that knowingly or recklessly provides substantial assistance to another person in violation of a provision of this chapter, or of any rule or regulation issued under this chapter, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.” Section 20(e) of the Exchange Act, 15 U.S.C. § 78t(e). °° Under Section 21C(a) of the Exchange Act, the SEC may impose a cease-and-desist order through the SEC’s administrative proceedings upon any person who is violating, has violated, or is about to violate any provision of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or would be a cause of the violation, due to an act or omission the person knew or should have known would contribute to such violation. Section 21C(a) of the Exchange Act,15 US.C. § 78u-3{a). 206 See Complaint, SEC v. Panalpina, Inc. supra note 68. 718 US.C. § 3282(a) provides: “Except as otherwise expressly provided by law, no person shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or the information is instituted within five years next after such offense shall have been committed.” 208 See Grunewald v. United States, 353 US. 391, 396-97 (1957) (holding government must prove conspiracy still existed and at least one overt act was committed within the statute of limitations); Fiswick y. United States, 329 US. 211, 216 (1946) (“The statute of limitations, unless suspended, runs from the last overt act during the existence of the conspiracy. The overt acts averred and proved may thus mark the duration, as well as the scope, of the conspiracy.”) (citation omitted); see generally Julie N. Sarnoff, Federal Criminal Conspiracy, 48 AM. CRIM. L. Rev. 663, 676 (Spring 2011). 2918 USC. § 3292. 71998 US.C. § 2462. 21S Rep. No. 95-114, at 3 (noting that, in the past, “corporate bribery has been concealed by the falsification of corporate books and records,” that the accounting provisions “remove [] this avenue of coverup,’ and that “[tlaken together, the accounting requirements and criminal [anti- bribery] prohibitions ... should effectively deter corporate bribery of foreign government officials”). 7128. Rep, No. 95-114, at 7. *13 Section 13(b)(2)(A) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(A). 14Section 13(b)(2)(B) of the Exchange Act, 15 US.C. § 78m(b)(2)(B). 715 "The accounting provisions contain a narrow exemption related to national security and the protection of classified information. Under this “national security” provision, “no duty or liability [under Section 13(b)(2) of the Exchange Act] shall be imposed upon any person acting in cooperation with the head of any federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives.” Section 13(b)(3) of the Exchange Act, 15 US.C. § 78m(b) (3). As Congress made clear, however, the exception is narrowly tailored and intended to prevent the disclosure of classified information. HLR. Rep. 94-831, at 11, available at http ://www.justice.gov/criminal/ fraud/fcpa/history/1977 /corruptrpt-94-83 | pdf. 16Section 13(b)(2)(A) of the Exchange Act, 15 US.C. § 78m(b)(2)(A). 77FLR. Rep. No. 94-831, at 10. 218 Tq. 219 Section 13(b)(7) of the Exchange Act, 15 U.S.C. § 78m(b)(7). 20HLR. Rep. No. 100-576, at 917 (1988), available athttp://www. justice. gov/criminal/fraud/fcpa/history/1988/tradeact- 100-41 8.pdf. Congress rejected the addition of proposed cost-benefit language to the definition “in response to concerns that such a statutory provision might be abused and weaken the accounting provisions at a time of increasing concern about audit failures and financial fraud and resultant recommendations by experts for stronger accounting practices and audit standards.” Jd. 1 See, €.8s Complaint, SEC v. Biomet, Inc., No. 12-cv-454 (D.D.C. Mar. 26, 2012), ECF No. 1 [hereinafter SEC v. Biomet], available at http:// www.sec.gov/litigation/complaints/20 12/comp22306.pdf; Criminal Information, United States v. Biomet, Inc., No. 12-cr-80 (D.D.C. Mar. 26, 2012) [hereinafter United States v. Biomet|, available at http://www. justice.gov/criminal/fraud/fcpa/cases/biomet/20 12-03-26-biomet- information.pdf; Complaint, SEC v. Smith & Nephew Inc., No. 12-cv- 187 (D.D.C. Feb. 6, 2012), ECF No. 1, available at http://www.sec.gov/ litigation/ complaints/ 2012/ comp22252. pdf; ; Criminal Information, United States v. Smith & Nephew ple. No. 12-cr-30 (D.D.c. Feb. 6, 2012), ECF No. 1, available at http://wwwjustice.gov/criminal/fraud/ fcpa/cases/smith-nephew/20 12-02-06-s-n-information.pdf; Complaint, SEC v. Johnson & Johnson, supra note 131; Criminal Information, United States v. DePuy, supra note 131; Complaint, SEC v. Maxwell Technologies Inc., No. 11-cv-258 (D.D.C. Jan. 31, 201 1), ECF No. 1 [hereinafter SEC v. Maxwell Technologies| , available at http ://www.sec. gov/ litigation/ complaints/ 2011/comp21 832.pdf; Criminal Information, United States v. Maxwell Technologies Inc., No. 11-cr-329 (S.D. Cal. Jan. 31,2011), ECF No. 1, available at http://www,justice.gov/criminal/ fraud/ fcpa/ cases/maxwell/01-3 1-1 1maxwell-tech-info. pdf; ; Complaint, SEC y. Transocean, Inc., No. 10-cv-1891 (D.D.c. Nov. 4, 2010), ECF No. 1, available at http ://www.sec.gov/litigation/complaints/20 10/ comp2 1725.pdé; Criminal Information, United States v. Transocean, Inc., No. 10-cr-768 (S.D. Tex. Nov. 4, 2010), ECF No. 1, available at hetp ://wwwijustice.gov/criminal/fraud/fcpa/cases/transocean-inc/1 1- 04-10transocean-info.pdf. HOUSE_OVERSIGHT_022615

2228. Rep, No. 95-114, at 7. *3 Section 13(b)(2)(B) of the Exchange Act, 15 US.C. § 78m(b)(2)(B). *4 Section 13(b)(7) of the Exchange Act, 15 U.S.C. § 78m(b)(7). 225 See Complaint, SEC v. Siemens AG, supra note 48; Criminal Information, United States v. Siemens AG, supra note 48, a Complaint, SEC v. Siemens AG, supra note 48; Criminal Information, United States v. Siemens AG, supra note 48; Press Release, U.S. Dept. of Justice, Siemens AG and Three Subsidiaries Plead Guilty to Foreign Corrupt Practices Act Violations and Agree to Pay $450 Million in Combined Criminal Fines (Dec. 15, 2008), available at http://www. justice.gov/opa/pr/2008/December/08-crm- 1105. html. 7 See, CG, Complaint, SEC v. Biomet, supra note 221 (bribes paid to government healthcare providers in which phony invoices were used to justify payments and bribes were falsely recorded as “consulting fees” or “commissions” in company’s books and records); Criminal Information, United States v. Biomet, supra note 221 (same); SEC v. Alcatel-Lucent, supra note 48 (bribes paid to foreign officials to secure telecommunications contracts where company lacked proper internal controls and permitted books and records to falsified); United States v. Alcatel-Lucent, S.A., supra note 48 (same). 228 Complaint, SEC v. Daimler AG, supra note 48; Criminal Information, United States v. Daimler AG, supra note 48. 29 To) 230 Tf 231 Td. 232 Tf. 233 J. 234 See, 685 Complaint, SEC v. Tyco Intl, supra note 9; Complaint, SEC v. Willbros, No. 08-cv-1494 (S.D. Tex. May 14, 2008), ECF No. 1, available at http://www.sec.gov/litigation/complaints/2008/comp20571 pdf. 5 See, es Complaint, SEC v. Siemens AG, supra note 48; Complaint, SEC v. York Intl Corp., supra note 115; Complaint, SEC v. Textron, supra note 115; Criminal Information, United States v. Control Components, Inc., No. 09-cr-162 (C.D. Cal. July 22 2009), ECF No. 1 [hereinafter United States v. Control Components], available at hetp:/ /www.justice. gov/ criminal/fraud/ fcpa/ cases/control-inc/07-22-09cci-info. pdf; . Criminal Information, United States vy. SSI Int’l Far East, Ltd., No. 06-cr- 398, ECF No. 1 (D. Or. Oct. 10, 2006) [hereinafter United States v. SST Int'l), available at http ://www.justice.gov/criminal/fraud/fcpa/cases/ ssi-intl/10- 10-06ssi-information.pdf. 236 See, CL5 Complaint, SEC v. El Paso Corp., supra note 187; Complaint, SEC v. Innospec, supra note 79; Complaint, SEC vy. Chevron Corp., 07- cv-10299 (S.D.NLY. Nov. 14, 2007), ECF No. 1, available at http://www. sec.gov/litigation/complaints/2007/comp20363 pdf. 237 Diea Agreement, United States v. Stanley, supra note 8; Plea Agreement, United States v. Sapsizian, supra note 8. 238 See Complaint, SEC v. Maxwell Technologies, supra note 221. 239 See Complaint, SEC v. Willbros Group, supra note 9, 2415 US.C. § 7201, et seq. 241 Exchange Act Rule 13a-15, 17 C.ER. § 240.13a-15; Exchange Act Rule 15d-15, 17 C.FR. § 240,15d-15; Item 308 of Regulation S-K, 17 CER. § 229.308; Item 15, Form 20-F, available at http://www.sec.gov/ about/forms/ form20-f.pdf; General Instruction (B), Form 40-F (for foreign private issuers), available at http ://www.sec.gov/ about/forms/ form40-f.pdf. 2 See US. SEC. AND EXCHANGE COMM., COMMISSION GUIDANCE REGARDING MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING UNDER SECTION 13{A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, Release No. 33-8810 (June 27,2007), available at http ://www.sec.gov/rules/interp/2007/33-8 810. pdf. 243 Td. 2a Foreign Corrupt Practices Act of 1977, Pub. L. No. 95-213, § 102, 91 Stat. 1494 (1977). 245 See supra note 48; SEC v. Technip, supra note 132, (French company); United States v. Technip, supra note 132, (same); see also Admin. Proceeding Order, In re Diageo ple, Exchange Act Release No. 64978 (SEC July 27,2011) (UK company), available at http://www.sec.gov/ litigation/admin/201 1/34-64978.pdf; Admin. Proceeding Order, In re Statoil, ASA, Exchange Act Release No. 54599 (SEC May 29, 2009) (Norwegian company), available at http: //www.sec.gov/ litigation/ admin/2006/ 34-54599. pdf; Criminal Information, United States v. Endnotes Statoil, ASA, No. 06-cr-960 (S.D.N-Y. Oct. 13, 2006) (same), available at http://wwwjustice.gov/criminal/fraud/fepa/cases/statoil-asa-inc/ 10-13- O9statoil-information.pdf. 6 Although private companies are not covered by the books and records and internal controls provisions of the FCPA and do not fall within SEC’s jurisdiction, such companies generally are required by federal and state tax laws and state corporation laws to maintain accurate books and records sufficient to properly calculate taxes owed. Further, most large private companies maintain their books and records to facilitate the preparation of financial statements in conformity with GAAP to comply with financial institutions’ lending requirements. 247 See SEC v. RAE Sys. Inc, supra note 92; In ve RAE Sys. Inc., supra note 92. *48 See Section 13(b)(6) of the Exchange Act, 15 U.S.C. § 78m(b) (6), which provides that where an issuer “holds 50 per centum or less of the voting power with respect toa domestic or foreign firm,’ the issuer must “proceed in good. faith to use its influence, to the extent reasonable under the issuer’s circumstances, to cause such domestic or foreign firm to devise and maintain a system, of internal accounting controls consistent with [Section 13(b)(2)],” 49 See 15 US.C. § 78m(b)(6). Congress added the language in sub- section 78m(b)(6) to the FCPA in 1988, recognizing that “it is unrealistic to expect a minority owner to exert a disproportionate degree of influence over the accounting practices ofa subsidiary.” H.R. Rep. No. 100-576, at 917. The Conference Report noted that, with respect to minority owners, “the amount of influence which an issuer may exercise necessarily varies from case to case. While the relative degree of ownership is obviously one factor, other factors may also be important in determining whether an issuer has demonstrated good-faith efforts to use its influence.” Jd; see also S. Rep. No. 100-85, at 50. *5° Section 20(e) of the Exchange Act, titled “Prosecution of Persons Who Aid and Abet Violations,’ explicitly provides that for purposes of a civil action seeking injunctive relief or a civil penalty, “any person that knowingly or recklessly provides substantial assistance to another person in violation of a provision of this title, or of any rule or regulation issued under this title, shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided.” See Section 20(e) of the Exchange Act, 15 US.C. § 78t(e). 251 See Complaint at 11-12, SEC». Elkin, supra note 50, ECF 1. >? SEC v. Elkin, supra note 50, ECF 6-9 (final judgments). 3 See, €.85 Complaint, SEC v. Nature’s Sunshine Products, Inc., e¢ a/., No. 09-cv-672 (D. Utah, July 31, 2009), ECF No. 2, available at http://www. sec.gov/, litigation/ litreleases/2009/1r2.1162.htm. 254 See Admin. Proceeding Order, In re Watts Water Technologies, Inc. and Leesen Chang, Exchange Act Release No. 65555 (SEC Oct. 13, 2011), available at http://www.sec.gov/litigation/ admin/201 1/34-65555.pdf. 55 Id. at 2, 4, 6-7. *56 Exchange Act Rule 13b2-1, 17 C.ER. § 240.13b2-1. 5715 US.C. § 78m(b)(5). *58 Section 3(a)(9) of the Exchange Act, 15 U.S.C. § 78c(a)(9). *59 Exchange Act Rule 13b2-2, 17 C.ER. § 240.13b2-2 260) Complaint, SEC v. Jennings, No, 11-cv-1444 (D.D.C. Jan. 24, 2011), ECF No. 1, available at http://www.sec.gov/litigation/ complaints/20 11/comp21 822.pdf. aE Complaint, id., ECF No. 1; Final Judgment, id., ECF No. 3. 262 Serious Fraud Office, Innospec Ltd: Former CEO admits bribery to falsify product tests (July 30, 2012), available at http://www.sto.gov. uk/ ‘press-room/ latest-press-releases/ press-releases-20 12/ innospec-ltd-- former-ceo-admits-bribery-to-falsify-product-tests.aspx. 6315 US.C. § 78m(b)(4)-(5). Congress adopted this language in 1988 in HOUSE_OVERSIGHT_022616

115 order to make clear that, consistent with enforcement policy at the time, criminal penalties would not be imposed “for inadvertent or insignificant errors in books and records, or inadvertent violations of accounting controls.” See S. Rep. No. 100-85, at 49; H.R. Rep. No. 100-576, at 916 (“The Conferees intend to codify current Securities and Exchange Commission (SEC) enforcement policy that penalties not be imposed for insignificant or technical infractions or inadvertent conduct.”). 615 US.C. § 78 f(a). 265 See United States v. Alcatel-Lucent, S.A., supra note 48; see also United States v. Alcatel-Lucent France, supra note 56. 266 See Deferred Prosecution Agreement, United States v. Alcatel-Lucent, S.A., supra note 48, ECF No. 10, available at http://www.justice.gov/ criminal/fraud/fcpa/cases/alcatel-etal/02-22- 1 lalcatel-dpa.pdf. 267 See Plea Agreement, United States v. Siemens AG, supra note 48, ECF No. 14, available at http ://wwwjustice.gov/criminal/fraud/fcpa/cases/ siemens/ 12-1 5-O08siemensakt-plea.pdf. 268 See Minute Entry of Guilty Plea, United States v. Peterson, supra note 8, ECF 13; see adso Press Release, U.S. Dept. of Justice, Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required. by FCPA (Apr. 23, 2012), available at http://www. justice.gov/opa/pr/20 12/April/ 12-crm-534,html. 2 See Criminal Information, United States v. Baker Hughes Svcs. Int'l, No. 07-cr-129 (S.D. Tex. Apr. 11, 2007), ECF No. 1, available at http ://wwwjustice.gov/criminal/fraud/fcpa/cases/baker-hughs/04- 1l1- 07bakerhughesintl-info.pdf. 2? See United States v. Panalpina, Inc, supra note 68. 271 Td. °? See FASB Statement of Financial Accounting Concepts No. 2, 1] 63-80. *3 PCAOB Auditing Standard No. 12 and PCAOB AU Section 325. 274 See Section 10A of the Exchange Act, 1SUS.C. § 78)-1. 25.18 US.C. § 1952. 278 See, e.g., United States v. Nexus Technologies, supra note 53; Criminal Information, United States v. Robert Richard King, et al,, No. 01-cr-190 (W.D. Mo. June 27, 2001), available at hetp://wwwjustice.gov/criminal/ fraud/ fcpa/ cases/, kingr-etal/ 0 5-03-02king-robert-indict.pdf; Superseding Indictment, United States v. Mead, supra note 44; Criminal Information, United States v. Saybolt North America Inc., e¢ al., No. 98-cr-10266 (D. Mass. Aug. 18, 1998), available at http ://wwwjustice.gov/criminal/ fraud/fcpa/cases/saybolt/08- 10-98saybolt-info.pdf. 277 See Second Superseding Indictment, United States v. Kozeny, No. 05- cr-518 (S.D.NY. May 26, 2009), ECF No. 203, available at http://www. justice.gov/criminal/fraud/fcpa/cases/kozenyv/05-26-09bourke2nd- supersed-indict.pdf; Judgment, United States v. Bourke, No. 05-cr-518 (S.D.N-Y. Noy. 12, 2009), ECF No. 253, available at http://www.justice. gov/ criminal/fraud/ fcpa/ cases/ kozenyv/ 11-1 2-09bourke-judgment.pdf. 278 Plea Agreement, United States v. Control Components, supra note 235, ECE No. 7; see also Order, United States v. Carson, supra note 119, ECF No. 440 (denying motion to dismiss counts alleging Travel Act violations), available at http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/carsons/201 1-09-20-carson-minutes-denying-motion-to-dismiss. pdf. 2? See, 0.85 Criminal Information, Uxited States v. Esquenazi, supra note 44; Criminal Information, United States v. Green, supra note 44; Criminal Information, United States v. General Elec. Co., No. 92-cr-87 (S.D. Ohio July 22, 1992), available at http ://www.justice.gov/criminal/fraud/fcpa/ cases/ general-electric/ 1992-07-22-general-electric-information. pdf. °8 Foreign officials may “not be charged with violating the FCPA itself, since the [FCPA] does not criminalize the receipt ofa bribe by a foreign official.” United States v. Blondek, 741 FSupp. 116, 117 (N.D. Tex. 1990), affd United States v. Castle, 925 F.2d 831 (Sth Cir. 1991) (“We hold that foreign officials may not be prosecuted. under 18 U.S.C. § 37] for conspiring to violate the FCPA.’). Foreign officials, however, can be charged with violating the FCPA when the foreign official acts asan intermediary of a bribe payment. See, eg., Information, United States v. Basu, No. 02-cr-475 (D.D.C. Nov. 26, 2002) (World Bank employee charged with wire fraud and FCPA violations for facilitating bribe payments to another World Bank official and Kenyan government official), available at http: //wwwjustice.gov / criminal/fraud/ fepa/ cases/ basu/1 1-26-02basu-info.pdf; Information, United States v. Sengupta, No. 02-cr-40 (D.D.C. Jan. 30, 2002), available at http ://www.justice.gov/ criminal/fraud/fcpa/cases/sengupta/0 1-30-02sengupta-info.pdf. 281 See, e.g, Judgments, United States v. Esquenazi, supra note 44, ECF Nos. 182, 816, 824 (judgments against foreign official defendants). 282 Criminal Information, United States v. SSI Int'l, supra note 235 (alleging violations of 18 U.S.C. §§ 1343, 1346); Plea Agreement, United States v. SSI Int'l, supra note 235, (Oct. 10, 2006), available at hetp:// www.justice.gov/ criminal/fraud/ fcpa/ cases/control-inc/07-24-09cci- plea-agree.pdf. 283 See Ex-Im Bank, Form of Exporter’s Certificate, EBD-M-56 (Jan. 2007), available at http ://www.exim.gov/pub/ins/pdf/ebd-m-56.pdf. 284 See 18 US.C. § 1001. 78592 C.ER. §§ 130.2, 130.9. 286 For example, in United States v. BAE Systems ple, BAE pleaded guilty to conspiring to defraud the United States by impairing and impeding its lawful functions, to making false statements about its FCPA compliance program, and to violating the AECA and ITAR. BAE paid a $400 million fine and agreed toan independent corporate monitor to ensure compliance with applicable anti-corruption and export control laws. Criminal Information and Plea Agreement, United States v. BAE Sys. ple, No. 10-cr-35 (D.D.C. Mar. 1, 2010), ECF Nos.1, 8, available at http ://www.justice.gov/criminal/fraud/fcpa/cases/bae-system/02-0 1- 10baesystems-info.pdf and http ://www.justice.gov/ criminal/fraud/ fcpa/ cases/bae-system/03-0 1-1 Obaesystems-plea-agree.pdf. In an action based on the same underlying facts as the criminal guilty plea, BAE entered a civil settlement with the Directorate of Defense Trade Controls for violations of AECA and ITAR, including over 2500 ITAR violations that included a failure to report the payment of fees or commissions associated with defense transactions and failure to maintain records involving ITAR-controlled transactions. BAE paid $79 million in penalties, and the State Department imposed a “policy of denial” for export licenses on three BAE subsidiaries involved in the wrongful conduct. Consent Agreement between BAE Sys. ple and Defense Trade Controls at 17-20, Bureau of Political-Military Affairs, U.S. Dept. of State (May 16, 2011), available at http ://www.pmddte.state.gov/compliance/ consent_agreements/ pdt/ BAES_CA. pdf; Proposed. Charging Letter, In re Investigation of BAE Systems ple Regarding Violations of the Arms Export Control Act and the International Traffic in Arms Regulations, US. Dept. of State (May 2011), available at http://www.pmddtc.state. gov/ compliance/ consent_agreements/ pdt/ BAES PCL. pdf. 8726 US.C. § 162(c)(1); see also Plea Agreement, United States v. Smith, No. 07-cr-69 (C.D. Cal. Sept. 3, 2009), ECF No. 89, available athttp:// www.justice.gov/ criminal/fraud/ fcpa/ cases/smithl/ 09-03-09smith|-plea- agree.pdf; Criminal Information, United States v. Titan Corp., supra note 185. 288 See USAM § 9-27.000. 8 See USAM § 9-27.420 (setting forth considerations to be weighed when determining whether it would be appropriate to enter into plea agreement). 2 See USAM § 9-28.000 et seq. | See USAM § 9-28.710 (discussing attorney-client and work product protections). 292 See http ://www.sec.gov/ divisions/enforce/ enforcementmanual.pdf. 3 See USAMS§ 9-28.300.A; see also USAM § 9-28.700.B (explaining benefits of cooperation for both government and corporation). 24 See USAM § 9-28.900 (discussing restitution and remediation). The commentary further provides that prosecutors should consider and weigh whether the corporation appropriately disciplined wrongdoers anda corporation’s efforts to reform, including its quick recognition of the flaws in the program and its efforts to improve the program. Td. 25 See USAM §§ 9-27.230, 9-27.420. 28US, SENTENCING GUIDELINES § 8B2.1(b)(7) (2011). 7 Td. § 8C2.5(F)(2) (2011). ?8US. SEC. AND EXCHANGE CoMM., REPORT OF INVESTIGATION PURSUANT TO SECTION 21(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND COMMISSION STATEMENT ON THE RELATIONSHIP OF COOPERATION TO AGENCY ENFORCEMENT DEcISIONS, SEC Rel. Nos. 34-44969 and AAER-1470 (Oct. 23, 2001) [hereinafter Seaboard Report] available at http ://www.sec.gov/litigation/ investreport/ 34-44969. htm. °US. SEC. AND EXCHANGE CoMM., PoLICy STATEMENT CONCERNING COOPERATION BY INDIVIDUALS IN ITS INVESTIGATIONS AND RELATED ENFORCEMENTS ACTIONS, 17 CER. § 202.12 (Jan. 10, 2010), available at http ://www.sec.gov/rules/ HOUSE_OVERSIGHT_022617

policy/2010/34-61340.pdf. 3° See U.S. SENTENCING GUIDELINES at § 8B2.1(a)(2). 301 US, SENTENCING GUIDELINES § 8B2.1(b). 3°? See generally DEBBIE TROKLUS, ET AL., COMPLIANCE 101: How TO BUILD AND MAINTAIN AN EFFECTIVE COMPLIANCE AND ETHICS PROGRAM, SOCIETY OF CoRP. COMPLIANCE AND ETHICs (2008) 3-9 [hereinafter COMPLIANCE 101] (listing reasons to implement compliance program, including protecting company’s reputation, creating trust between management and employees, preventing false statements to customers, creating efficiencies and streamlining processes, detecting employee and contractor fraud and abuse, ensuring high- quality products and services, and providing “early warning” system of inappropriate actions); TRANSPARENCY INT'L, BUSINESS PRINCIPLES FOR COUNTERING BRIBERY: SMALL AND MEDIUM ENTERPRISE (SME) Epirion 5 (2008) (citing benefits of anti-bribery program like protecting reputation, creating record of integrity enhances opportunities to acquire government business, protecting company assets otherwise squandered. on bribes); MarK PIETH, HARMONISING ANTI-CORRUPTION COMPLIANCE: THE OECD Goop PRACTICE GuIDANCE 45-46 (2011) [hereinafter HARMONISING ANTI- CORRUPTION COMPLIANCE] (citing need for compliance program to prevent and detect in-house risks, such as workplace security or conflicts of interest, and external risks, like anti-trust violations, embargo circumvention, environmental hazards, and money laundering). 303 Debarment authorities, such as the Department of Defense or the General Services Administration, may also consider a company’s compliance program when deciding whether to debar or suspend a contractor Specifically, the relevant regulations provide that the debarment authority should consider “[w]hether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment,’ and “[w]hether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs.’ 48 C.ER. § 9.406-1(a). 36 Seaboard Report, supra note 298; U.S, SEC. AND EXCHANGE Comm., REPORT OF INVESTIGATION PURSUANT TO SECTION 21(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AND COMMISSION STATEMENT ON THE RELATIONSHIP OF COOPERATION TO AGENCY ENFORCEMENT Decisions, SEC Rel. No. 44969 (Oct. 23, 2001), available at http ://www.sec.gov/ litigation/ investreport/34-44969 whtm. 33 USAM § 9-28.300. When evaluating the pervasiveness of wrongdoing within the corporation, prosecutors are advised that while it may be appropriate to charge a corporation for minor misconduct where the wrongdoing was pervasive, “it may not be appropriate to impose liability upon a corporation, particularly one with a robust compliance program in place, under a strict respondeat superior theory for the single isolated act of a rogue employee.” /d. § 9-28.500.A (emphasis added), Prosecutors should also consider a company’s compliance program when examining any remedial actions taken, including efforts to implement an effective compliance program or to improve an existing one. As the commentary explains, “although the inadequacy ofa corporate compliance program is a factor to consider when deciding whether to charge a corporation, that corporation’s quick recognition of the flaws in the program and its efforts to improve the program are also factors to consider as to appropriate disposition ofa case.” Id. § 9-28.900.B. Finally, the Principles of Federal Prosecution of Business Organizations provides that prosecutors should consider the existence and effectiveness of the corporation's pre-existing compliance program in determining how to treat a corporate target. Td. § 9-28.800. 306 See USAM § 9-28.800.B; see also US. SENTENCING GUIDELINES § 8B2.1(a) (2011) (“The failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct.”), 307 See Press Release, U.S. Dept. of Justice, Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required by FCPA (Apr. 25, 2012) (declining to bring criminal case against corporate employer that “had constructed and maintained a system, of internal controls, which provided reasonable assurances that its employees were not bribing government officials”), available at hetp:/ / wwwjustice.gov/opa/pr/20 12/April/ 12-crm-534.html; Press Release, US. Sec. and Exchange Comm., SEC Charges Former Morgan Stanley Endnotes Executive with FCPA Violations and Investment Adviser Fraud, No. 2012-78 (Apr. 25, 2012) (indicating corporate employer was not charged in the matter and had “cooperated with the SEC’s inquiry and conducted a thorough internal investigation to determine the scope of the improper payments and other misconduct involved”), available at hetp:/ /WWW.sec. gov/news/press/2012/2012-78 htm. 308 See USAM § 9-28.800.B. 3 See, e.g, INTL CHAMBER OF COMMERCE, ICC RULES ON COMBATING CoRRUPTION (2011) [hereinafter ICC RULES ON ComBATING Corruption], available at http://www.iccwbo. org/ uploadedFiles/ ICC/ policy/ business_in_society/ Statements/ ICC_Rules_on_Combating_Corruption_201 ledition.pdf; TRANSPARENCY INT'L, BUSINESS PRINCIPLES FOR COUNTERING BriBERy (2d ed. 2009) [hereinafter BUSINESS PRINCIPLES FOR COUNTERING BRIBERY], available at http ://www.transparency. org/: global_priorities/ private_sector/ business_principles/ ; UNITED KINGDOM MINIsTRY OF JUSTICE, THE BRIBERY ACT OF 2010, GUIDANCE ABOUT PROCEDURES WHICH RELEVANT COMMERCIAL ORGANISATIONS CAN PUT INTO PLACE TO PREVENT PERSONS ASSOCIATED WITH THEM FROM BRIBING (2010), available at http:// wwwjustice.gov.uk/ downloads/ legislation/ bribery-act-20 10-guidance. pdf; WorLp BANK Group, INTEGRITY COMPLIANCE GUIDELINES (2011) [hereinafter INTEGRITY COMPLIANCE GUIDELINES], available at http :// siteresources.worldbank.org/ INTDOII/Resources/ Integrity_Compliance_Guidelines.pdf; As1a-PaCIFIC ECONOMIC CooPERATION, APEC ANTI-CORRUPTION CODE OF CONDUCT FOR Business (2007) [hereinafter APEC ANTI-CORRUPTION CODE], available at http ://www.apec.org/Groups/SOM-Steering-Committee- on-Economic-and-Technical- Cooperation/ Task- Groups/~/ media/ Files/Groups/ACT/07_act_codebrochure.ashx; INT’L CHAMBER OF COMMERCE, TRANSPARENCY INT'L, UNITED NATIONS GLOBAL Compact, and WorLp Economic Forum, RESISTING EXTORTION AND SOLICITATION IN INTERNATIONAL TRANSACTIONS: A Company Tool FOR EMPLOYEE TRAINING (2011), available at hetp://www3 .weforum.org/docs/WEF PACI RESIST Report_2011. pdf; INTL CHAMBER OF COMMERCE, ET AL., CLEAN BUSINESS Is Goon BusinEss, available at http ://www3 .weforum.org/docs/ WEF_PACI_BusinessCaseFightingCorruption_2011.pdf; WorLD ECONOMIC FoRuM, PARTNERING AGAINST CORRUPTION — PRINCIPLES FOR COUNTERING BRIBERY (2009) [hereinafter PARTNERING AGAINST CorRuPTION |, available at http://www3. weforum.org/ docs/ WEF_PACI_Principles_2009. pdf; ; WORKING GRovp ON BRIBERY, OECD, Goon PRACTICE GUIDANCE ON INTERNAL CONTROLS, ETHICS, AND COMPLIANCE 2010, [hereinafter OECD Goop PracTIcE GUIDANCE| available at http://www.oecd. org/dataoecd/5/51/44884389.pdf; UN. GLoBaL ComPAcT, THE TEN PRINCIPLES [hereinafter THE TEN PrincipLes] available at http:// www.unglobalcompact.org/; aboutITheGC/ TheTenPrinciples/ index.html. 319 This is also reflected in the Sentencing Guidelines, which recognizes that no single, formulaic set of requirements should be imposed, but instead focuses on a number of factors like applicable industry practice or the standards called for by any applicable governmental regulation, the size of the organization, and whether the organization has engaged in similar misconduct in the past. See US. SENTENCING GUIDELINES § 8B2.1 & app. note 2 (2011). 311 This was underscored by then-SEC Commissioner Cynthia Glassman in 2003 ina speech on the SEC’s implementation of the Sarbanes-Oxley Act: “[T Jhe ultimate effectiveness of the new corporate governance rules will be determined by the ‘tone at the top. Adopting a code of ethics means little if the company’s chief executive officer or its directors make clear, by conduct or otherwise, that the code’s provisions do not apply HOUSE_OVERSIGHT_022618

117 to them. ... Corporate officers and directors hold the ultimate power and responsibility for restoring public trust by conducting themselves in a manner that is worthy of the trust that is placed in them.” Cynthia Glassman, SEC Implementation of Sarbanes- Oxley: ‘The New Corporate Governance, Remarks at National Economists Club (April B, 2003), available at http://www.sec.gov/news/speech/spch040703cag.htm F 3 Indeed, research has found that “[e]thical culture is the single biggest factor determining the amount of misconduct that will take place ina business.” ErHics RESOURCE CENTER, 2009 NATIONAL BUSINESS Eruics SuRVEY: ETHICS IN THE RECESSION (2009), at 41. Metrics of ethical culture include ethical leadership (tone at the top), supervisor reinforcement of ethical behavior (middle management reinforcement), and peer commitment (supporting one another in doing the right thing). ErHics REsSouRCE CENTER, 2011 NATIONAL BUSINESS ErHics SURVEY: WORKPLACE ETHICS IN TRANSITION (2012) at 19. Strong ethical cultures and strong ethics and compliance programs are related, as data show that a well-implemented program helps lead toa strong ethical culture. fd. at 34. “Understanding the nature of any gap between the desired culture and the actual culture is a critical first step in determining the nature of any ethics-based risks inside the organization.” David Gebler, The Role of Culture at 1,7, in SOCIETY OF CORPORATE COMPLIANCE AND ETHIcs, THE COMPLETE COMPLIANCE AND EruHics MANUAL (2011). To create an ethical culture, attention must be paid to norms at all levels of an organization, including the “tone at the top,” “mood in the middle? and “buzz at the bottom.” Jd. 1.9-1.10. 313 See, e.g., U.S. SENTENCING GUIDELINES § 8B2.1(2)(B)-(C) (2011). 314 Td. 315 316 Td. 31” See, e.g, ETHICS AND COMPLIANCE OFFICER ASSOCIATION FOUNDATION, THE ETHICS AND COMPLIANCE HANDBOOK: A PRACTICAL GUIDE FROM LEADING ORGANIZATIONS (2008) at 13-26 [hereinafter THE ETHICS AND COMPLIANCE HANDBOOK]. 318 See U.S. SENTENCING GUIDELINES § 8B2.1(b)(4) (2011). 39 See U.S. SENTENCING GUIDELINES § 8B2.1(b)(6) (2011) (“The organization’s compliance and ethics program shall be promoted and enforced consistently throughout the organization through (A) appropriate incentives to perform in accordance with the compliance and ethics program; and (B) appropriate disciplinary measures for engaging in criminal conduct and for failing to take reasonable steps to prevent or detect criminal conduct.”). 3° See, e.g, JOSEPH E. MURPHY, SOCIETY OF CORP. COMPLIANCE AND Eruics, Us1nc INCENTIVES IN YOUR COMPLIANCE AND ETHICS ProGram (2011) at 1; THe ErHics AND COMPLIANCE HANDBOOK, supra note 317, at 111-23. 321 Stephen M. Cutler, Director, Division of Enforcement, SEC, Jone at the Top: Getting It Right, Second Annual General Counsel Roundtable (Dec. 3, 2004), available at http ://www.sec.gov/news/speech/ spch120304smc.htm. 3? See, e.g, ICC RULES ON COMBATING CORRUPTION, supra note 309, at 8. 3°3 See, e.g. US. SENTENCING GUIDELINES § 8B2.1(b)(5)(C); COMPLIANCE 101, supra note 302, at 30-33. au Corporate Board Member/FTI Consulting 2009 Legal Study, Buckle Up. Boards and General Counsel May Face a Bumpy Ride in 2009, at 5 (“Interestingly, while 67% of general counsel say their company is subject to compliance under the FCPA, 64% of those say there is room for improvement in their FCPA training and compliance programs.”). 35 See U.S. SENTENCING GUIDELINES § 8B2.1(b)(5)(B) (“The organization shall take reasonable steps... to evaluate periodically the effectiveness of the organization's compliance and ethics program.”). 36 See, e.g, COMPLIANCE 101, supra note 302, at 60-61; THE ETHICS AND COMPLIANCE HANDBOOK, supra note 317, at 155-60; BUSINESS PRINCIPLES FOR COUNTERING BRIBERY, supra note 309, at 14, 327 See, CL, Michael M. Mannix and David S. Black., Compliance Issues in M&A: Performing Diligence on the Target’ Ethics and Compliance Program at 5.71-5.81, in SOCIETY OF CORPORATE COMPLIANCE AND ErHics, THE COMPLETE COMPLIANCE AND ETHICS MANUAL (2011). 328 Complaint, SEC v. Syncor International Corp., supra note 190; Criminal Information, United States v. Syncor ‘Taiwan, Inc., supra note 189. US, DEPT. OF JUSTICE, FCPA Op. RELEASE 08-02 (June 13, 2008), available at http ://justice.gov/criminal/fraud/fepa/opinion/2008/0802. pdf. 330) Complaint, SEC v. Rae Sys., Inc., supra note 92; Non-Pros. Agreement, Inve Rae Sys. Inc., supra note 92. 31US. DEPT. OF COMMERCE, BusINEss ETHICS: A MANUAL FOR MANAGING A RESPONSIBLE BUSINESS ENTERPRISE IN EMERGING Market Economies (2004), available at http://www.ita.doc.gov/ goodgovernance/; adobe/ bem_manual.pdf. 32US. DEPT. OF STATE, FIGHTING GLOBAL CORRUPTION: BUSINESS Risk MANAGEMENT (2d ed. 2001), available at http://www.oge.doc. gov/ pdts/ Fighting Global_Corruption.pdf. 333 See HARMONISING ANTI-CORRUPTION COMPLIANCE, supra note 302, at 46 (‘Anti-corruption compliance is becoming more and more harmonised worldwide.”). 34 OECD Goon PRACTICE GUIDANCE, supra note 309, 35 APEC ANTI-CORRUPTION CODE, supra note 309. %°1CC RULES ON COMBATING CORRUPTION, supra note 309. 7 BUSINESS PRINCIPLES FOR COUNTERING BRIBERY, supra note 309. 28'THE TEN PRINCIPLES, supra note 309. 8° INTEGRITY COMPLIANCE GUIDELINES, supra note 309. #4 PaRTNERING AGAINST CORRUPTION, supra note 309, 4115 US.C. §§ 78dd-2(g)(1)(A), 78dd-3(e)(1)(A), 78ff(c)(1)(A). #215 US.C. §§ 78dd-2(g)(2)(A), 78dd-3(e)(2)(A), 78f(c)(2)(A). 4315 US.C. § 78f{a). 415 US.C. § 78ff(a). 5518 US.C.§ 357 1(d); see Southern Union v. United States, 132 S. Ct. 2344, 2350-51 & n4 (2012). #615 US.C. §§ 78dd-2(g) (3), 78dd-3(e)(3), 78 fc) (3). *? The US. Sentencing Guidelines are promulgated by the US. Sentencing Commission: ‘The United States Sentencing Commission (“Commission”) is an independent agency in the judicial branch composed. of seven voting and two non-voting ex-officio members. Its principal purpose is to establish sentencing policies and practices for the federal criminal justice system that will assure the ends of justice by promulgating detailed guidelines prescribing the appropriate sentences for offenders convicted of federal crimes. The Guidelines and policy statements promulgated by the Commission are issued pursuant to Section 994(a) of Title 28, United States Code. US. SENTENCING GUIDELINES § 1A1.1 (2011). 348 Td. at ch. 3-5. 9 Td. §2C1.1. 3° Td. §2C1.1(b). 31 Jd, §3B1.1. 352 Id. at ch. 4, § 5A. 353 Jd. §2B1.1(b)(10)(B), 2B1.1(b)(18)(A). %4 Td. § 8C2A (a). 355 Id. § 8C2.5. %6 Td. § 8C2.5(F), 8C2.5(g). 357 T)OJ has exercised this civil authority in limited circumstances in the last thirty years. See, €.g., United States & SEC v. KPMG Siddharta Siddharta & Harsono, et al., No. 01-cv-3105 (S.D. Tex. 2001) (entry of injunction barring company from future FCPA violations based on allegations that company paid bribes to Indonesian tax official in order to reduce the company’s tax assessment); United States v. Metcalf & Eddy, Inc., No. 99-cv-12566 (D. Mass. 1999) (entry of injunction barring company from future FCPA violations and requiring maintenance of compliance program based on allegations that it paid excessive marketing and promotional expenses such as airfare, travel expenses, and per diem to an Egyptian official and his family); United States v. American Totalisator Co. Inc., No. 93-cv-161 (D. Md. 1993) (entry of injunction barring company from future FCPA violations based on allegations that it paid money to its Greek agent with knowledge that all or some of the money paid would be offered, given, or promised to Greek foreign officials in connection with sale of company’s system and spare parts); United States v. Eagle Bus Manufacturing, Inc., No. 91-cv-171 (S.D. Tex. 1991) (entry of injunction barring company from future FCPA violations based on allegations that employees of the company participated in HOUSE_OVERSIGHT_022619

bribery scheme to pay foreign officials of Saskatchewan's state-owned. transportation company $50,000 CAD in connection with sale of buses); United States v. Carver, et al., No. 79-cv-1768 (S.D. Fla. 1979) (entry of injunction barring company from future FCPA violations based on allegations that Carver and Holley, officers and shareholders of Holcar oi Corp., paid $1.5 million to Qatar foreign official to secure an oil drilling concession agreement); United States v. Kenny, e¢ al., No. 79-cv- 2038 (D.D.C. 1979) (in conjunction with criminal proceeding, entry of injunction barring company from future FCPA violations for providing illegal financial assistance to political party to secure renewal of stamp distribution agreement). 3815 US.C, §§ 78dd-2(g)(1)(B), 78dd-3(e)(1)(B), 78H(c)(1)(B)s see also 17 CER. § 201.1004 (providing adjustments for inflation). 3915 US.C, §§ 78dd-2(g)(2)(B), 78dd-3(e)(2)(B), 78E(c)(2)(B)s see also 17 CER. § 201.1004 (providing adjustments for inflation). 315 US.C. §§ 78dd-2(g)(3), 78dd-3(e) (3), 78ff(c) (3); see also 17 C.RR. § 201.1004 (providing adjustments for inflation). %! Section 21(B)(b) of the Exchange Act, 15 US.C. § 78u(d)(3); see also 17 CER. § 201.1004 (providing adjustments for inflation). 3@ See Securities Enforcement Remedies and Penny Stock Reform Act of 1990, Pub. L. No. 101-429, 104 Stat. 931 §§ 202, 301, 401, and 402 (codified in scattered sections of Title 15 of the United States Code). 38 48 CER. §§ 9.406-2, 9.407-2. 3448 CER. § 9.402(b). 365 See 48 C.ER. §§ 9.406-1, 9.407-1(b) (2). Section 9.406-1 sets forth the following non-exhaustive list of factors: (1) Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment. (2) Whether the contractor brought the activity cited as a cause for debarment to the attention of the appropriate Government agency ina timely manner. (3) Whether the contractor has fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official. (4) Whether the contractor cooperated fully with Government agencies during the investigation and any court or administrative action. (5) Whether the contractor has paid or has agreed to pay all criminal, civil, and administrative liability for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution. (6) Whether the contractor has taken appropriate disciplinary action against the individuals responsib. e for the activity which constitutes cause for debarment. (7) Whether the contractor has implemented or agreed to implement remedial measures, including any identified by the Government. (8) Whether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs. (9) Whether the contractor has had adequate time to eliminate the circumstances within the contractor's organization that led to the cause for debarment. (10) Whether the contractor’s management recognizes and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent recurrence. 3 48 CER. § 9.406-1(a). 367 Exec, Order No. 12,549, 51 Fed. Reg. 6,370 (Feb. 18, 1986); Exec. Order No. 12,689, 54 Fed. Reg. 34131 (Aug. 18, 1989). 38 48 CER. § 9.407-2(b). 3° USAM § 9-28.1300 (2008). 3” See, e.g, AFRICAN DEVELOPMENT BANK GROUP, INTEGRITY Endnotes AND ANTI-CORRUPTION PRoGREss REPORT 2009-2010 7, 14 (“As the premier financial development institution in Africa, the AfDB is determined to root out misconduct, fraud and corruption within its own ranks as well as in the implementation of the projects it finances. In order to do so, the Bank created an anti-corruption and fraud investigation division in November 2005 as its sole investigative body. The unit became operational in June 2006 and commenced investigations in January 2007. ... Investigations conducted by the IACD [Integrity and Anti-Corruption Department] are not criminal proceedings; they are administrative in nature. Sanctions range from personnel disciplinary actions, such as separation, to loan cancellation and debarment for contractors, which can be temporary or permanent.”), available at http i// www.afdb.org/ fileadmin/ uploads/ afdb/Documents/ Publications/ Integrity%20and%20Anti- Corruption. pdf; ; The World Bank Group, Procurement: Sanctions Committee (“The World Bank’s debarment process was first formulated in July, 1996, and the Sanctions Committee was established in November 1998 to review allegations and recommend sanctions to the President. Written procedures were issued in August 2001 and are posted on the Bank’s website, along with the sanction actions.’), available at http // ‘web.worldbank.org/ WBSITE/ EXTERNAL/PROJECTS/PROCUREMENT/90,,contentwDK:5000 2288~pagePK:8427 1 ~piPK:84287 ~theSitePK :84266,00.html. 37) See African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank Group and World Bank Group, Agreement for Mutual Enforcement of Debarment Decisions (Apr. 9, 2010), available at http //) siteresources.worldbank.org/ NEWS/Resources/ AgreementForMutualEnforcementof DebarmentDecisions.pdf. 372 Id; see also The World Bank Group, Cross-Debarment Accord Steps Up Fight Against Corruption (Apr. 9, 2010) (“With today’s cross-debarment agreement among development banks, a clear message on anticorruption is being delivered: Steal and cheat from one, get punished by all? said World Bank Group President Robert B. Zoellick.”), available at hetp:/ / web.worldbank.org/ WBSITE/EXTERNAL/NEWS/0,,contentMDK:2 2535805 ~pageP K:64257043~piPK :437376~theSiteP K:4607,00.html. 3392 CER. §§ 126.7(a)(3)-(4), 120.27(a)(6). 34 Authority under the AECA is delegated to the DDTC. See 22 C.ER. § 120.1 (a). 37592 US.C. § 2778(g)(1)(A) (vi), (g) (3) (B). 37699 CER. § 127.7(c). 377 See supra note 286, 578 See Gary G. Grindler, Acting Dep. Att’y Gen., U.S. Dept. of Justice, Mem. to the Heads of Department Components and United States Attorneys on Additional Guidance on the Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution (May 25, 2010), available at http ://www.justice.gov/ dag/ dag-memo-guidance- monitors.pdf; Lanny A. Breuer, Assist. Att’y Gen., Dept of Justice, Mem. to All Criminal Division Personnel on Selection of Monitors in Criminal Division Matters (June 24, 2009), available at hetp:/ /www. justice.gov/criminal/fraud/fcpa/docs/response3 -supp-appx-3.pdf; see also Craig S. Morford, Acting Dep. Att’y Gen., US. Dept. of Justice, Mem. to the Heads of Department Components and United States Attorneys on Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations (Mar. 7, 2008), available at http :// www justice.gov/dag/morford- useofmonitorsmemo-03072008.pdf. a7) Historically, DOJ had, on occasion, agreed to DPAs with companies that were not filed with the court. That is no longer the practice of DOJ. 3899 USAM § 9-27.230. 31USAM § 9-27.230.B. 382 DOJ has recently declined matters where some or all of the following HOUSE_OVERSIGHT_022620

119 circumstances were present: (1) a corporation voluntarily and fully disclosed the potential misconduct; (2) corporate principles voluntarily engaged in interviews with DOJ and provided truthful and complete information about their conduct; (3) a parent company conducted extensive pre-acquisition due diligence of potentially liable subsidiaries and engaged in significant remediation efforts post-acquisition; (A)a company provided information about its extensive compliance policies, procedures, and internal controls; (5) a company agreed to a civil resolution with the Securities and Exchange Commission while also demonstrating that criminal declination was appropriate; (6) only a single employee was involved in the improper payments; and (7) the improper payments involved minimal funds compared. to overall business revenues. 383 See Criminal Information, United States v. Peterson, supra note 8, Press Release, U.S. Dept. of Justice, Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required by FCPA (Apr. 25, 2012), available at http://www.justice.gov/opa/ pr/2012/ April/ 12-crm-534.html (“After considering all the available facts and circumstances, including that Morgan Stanley constructed and maintained a system of internal controls, which provided reasonable assurances that its employees were not bribing government officials, the Department of Justice declined to bring any enforcement action against Morgan Stanley related to Peterson’s conduct. The company voluntarily disclosed this matter and has cooperated throughout the department's investigation.” ); see also Press Release, U.S. Sec. and Exchange Comm., SEC Charges Former Morgan Stanley Executive with FCPA Violations and Investment Adviser Fraud (Apr. 25,2012), available at http: / / www. sec.gov/news/press/2012/2012-78 htm (“Morgan Stanley, which is not charged in the matter, cooperated with the SEC’s inquiry and conducted a thorough internal investigation to determine the scope of the improper payments and other misconduct involved.”). 3% SEC Rules of Practice, 17 C.ER. § 201.102(e). 385 Deferred Pros. Agreement, In the Matter of Tenaris, S.A. (May 17, 2011), available at http ://www.sec.gov/news/press/2011/2011-1 12-dpa. pdf; see also Press Release, U.S. Sec. and Exchange Comm., Tenaris to Pay $5.4 Million in SEC’s First-Ever Deferred Prosecution Agreement (May 17,2011), available at http ://www.sec.gov/news/press/2011/2011-112. htm. 386 See Non-Pros. Agreement, In re Tenaris, S.A. (May 17, 2011), available at http ://www.justice.gov/criminal/fraud/fcpa/cases/tenaris-sa/201 1- 03-14-tenaris.pdf. 387 See US. SEC. AND EXCHANGE COMM., ENFORCEMENT MANUAL § 6.2.3. (March 9, 2012), available at hetp://www.sec-gov/divisions/ enforce/enforcementmanual.pdf. 388 See id. § 6.2.4. 38 See id. § 2.6. 318 US.C. § 1514A(c). 3118 US.C. § 1513(e). 3 15 US.C. § 78u-6(a)(3). The new provision defines “original information” to mean information that: (A) is derived from the independent knowledge or analysis of a whistleblower; (B) is not known to the Commission from any other source, unless the whistleblower is the original source of the information; and (C) is not exclusively derived from an allegation made ina judicial or administrative hearing, ina governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information. 33.15 USC. § 78u-6; see also Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 922, 124 Stat. 1376, 1841-49 (2010). 394 For detailed information about the program, including eligibility requirements and certain limitations that apply, see Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, available at http ://www.sec.gov/about/oflices/owb/dodd-frank-sec-922.pdf, and the final rules on eligibility, Exchange Act Rule 21F-8, 17 C.ER.§ 240.2 1F-8. 3% For example, the rules: (1) make a whistleblower eligible for an award. if the whistleblower reports original information internally, and the company informs the SEC about the violations; (2) give whistleblowers 120 days to report information to the SEC after first reporting internally and still be treated as if he or she had reported to the SEC at the earlier reporting date , thus preserving their “place in line” for a possible whistleblower award from the SEC; and (3) provide that a whistleblower’s voluntary participation in an entity's internal compliance and reporting systems is a factor that can increase the amount of an award, and that a whistleblower’s interference with internal compliance and reporting system is a factor that can decrease the amount of an award. See Exchange Act Rule 21E, 17 C.ER. § 240.21F, 36 See Exchange Act Rule 21F-7(b), 17 C.ER. § 240.21F-7(b). 397 For example, SEC staff will not disclose a whistleblower’s identity in response to requests under the Freedom of Information Act. However, there are limits on SEC’s ability to shield a whistleblower’s identity, and in certain circumstances SEC must disclose it to outside entities. For example, in an administrative or court proceeding, SEC may be required to produce documents or other information that would reveal the whistleblower’s identity. In addition, as part of ongoing SEC investigatory responsibilities, SEC staff may use information provided by a whistleblower during the course of the investigation. In appropriate circumstances, SEC may also provide information, subject to confidentiality requirements, to other governmental or regulatory entities. Exchange Act Rule 21F-7(a), 17 C.AR. 240.21F-7(a). 398 Although SEC does not have an opinion procedure release process, it has declared its decision to follow the guidance announced through DOJ’s FCPA Opinion Release Procedure. US. Sec. and Exchange Comm., SEC Release No. 34-17099 (Aug. 29, 1980), available at hetp:// www.sec.gov/news/digest/1980/dig082980.pdf. SEC Release No. 34- 17099 stated that, to encourage issuers to take advantage of the DOJ’s FCPA Review Procedure, as a matter of prosecutorial discretion, SEC would “not take enforcement action alleging violations of Section 30A in any case where an issuer has sought and obtained an FCPA Review letter from the Department, prior to May 31, 1981, stating that the Department will not take enforcement action under Section 30A with respect to the transaction involved.” Jd. The release further noted that it would revisit this policy once the DOJ had evaluated the results of the FCPA Review Procedure after its first year of operation. A second release stated that the SEC would continue to adhere to the policy announced in Release No. 34-17099. USS. Sec. and Exchange Comm., SEC Release No. 34-18255 (Nov. 13, 1981), available at http://www.sec.gov/news/ digest/1981/dig111381L.pdf. °° Both DOJ’s opinion procedure releases (from 1993 to present) and review procedure releases (from 1980- 1992) are available at http://www. justice.gov/ criminal/fraud/ fcpa/: opinion. “°° The full regulations relating to DOJ’s opinion procedure are available at http ://wwwjustice.gov/criminal/fraud/fcpa/docs/frgnerpt.pdf. #198 C.ER.§ 80.1. 4298 C.ER. § 80.3. 328 CER. § 80.12 (“Neither the submission of a request for an FCPA Opinion, its pendency, nor the issuance of an FCPA Opinion, shall in any way alter the responsibility of an issuer to comply with the accounting requirements of 15 U.S.C. 78m(b)(2) and (3).”). 4498 C.ER. § 80.4. #598 C.ER. § 80.5. #698 C.ER. § 80.6. #728 CER. § 80.14(a). This non-disclosure policy applies regardless of whether DOJ responds to the request or the party withdraws the request before receiving a response. Td. 4898 C.ER. § 80.6. 4998 C.ER. § 80.2. 419Ty connection with any request for an FCPA opinion, DOJ may conduct whatever independent investigation it believes appropriate. 28 CER. § 80.7. 41198 CER. § 80.15. Oncea request is withdrawn, it has no effect. However, DOJ reserves the right to retain a copy of any FCPA opinion request, documents, and information submitted during the opinion release procedure for any governmental purpose, subject to the restrictions on disclosures in 28 C.E.R. § 80.14. 41298 CER. § 80.8. 41398 CER. § 80.7. “Such additional information, if furnished orally, must be confirmed in writing promptly. ‘The same person who signed the initial request must sign the written, supplemental information and must again certify it to be a true, correct and complete disclosure of the requested information.” /d. 41498 CLER. § 80.9 (“No oral clearance, release or other statement HOUSE_OVERSIGHT_022621

purporting to limit the enforcement discretion of the Department of Justice may be given. The requesting issuer or domestic concern may rely only upon a written FCPA opinion letter signed by the Attorney General or his designee.”). “528 C.KR. § 80.8. FCPA opinions do not bind or obligate any agency other than DOJ. They also do not affect the requesting party’s obligations to any other agency or under any statutory or regulatory provision other than those specifically cited in the particular FCPA opinion. 28 C.ER. § 80.11. Ifthe conduct for which an FCPA opinion is requested is subject to approval by any other agency, such FCPA opinion may not be taken to indicate DOJ’s views on any legal or factual issues before that other agency. 28 C.ER. § 80.13. 41628 C.RR. § 80.10. DOJ can rebut this presumption by a preponderance of the evidence. A court determining whether the presumption has been rebutted weighs all relevant factors, including whether the submitted information was accurate and complete and the activity was within the scope of conduct specified in the request. Td. As of September 2012, DOJ has never pursued an enforcement action against a party for conduct that formed the basis of an FCPA opinion stating that the prospective conduct would violate DOJ’s present enforcement policy. 47 Asa general matter, DOJ normally anonymizes much of the information in its publicly released opinions and includes the general nature and circumstances of the proposed conduct. DOJ does not release the identity of any foreign sales agents or other types of identifying information. 28 C.ER. § 80.14(b). However, DOJ may release the identity of the requesting party, the foreign country in which the proposed. conduct is to take place, and any actions DOJ took in response to the FCPA opinion request. Jd. Ifa party believes that an opinion contains proprietary information, it may request that DOJ remove or anonymize those portions of the opinion before it is publicly released. 28 CER. § 80.14(c). 41898 CER. § 80.16. 120 HOUSE_OVERSIGHT_022622

FCPA Unit Fraud Section, Criminal Division U.S. Department of Justice 1400 New York Avenue, N.W. Washington, DC 20005 http://www.justice.gov/criminal/fraud/fcpa/ FCPA Unit Enforcement Division U.S. Securities & Exchange Commission 100 F Street, NE Washington, DC 20549 http://www.sec.gov/spotlight/fcpa.shtml HOUSE_OVERSIGHT_022623