Author Archives: Allison Caffarone

The Right to be Forgotten and the Monitoring Tools in Compliance Programs

by Antenor Madruga, Ana Belotto and Adriano Teixeira [1]

Obligations and incentives to implement effective compliance programs have increasingly gained importance in Brazil in light of concepts like gatekeepers[2] (professionals with the potential to  identify illicit activities, due to their function and duties in corporations) and strict liability of legal entities (established in the newest Brazilian Anti-Corruption Law that came into effect in 2014 – Law n. 2,613/2013). In this sense, private individuals have also gradually seen their supervisory responsibility increase, especially under money laundering and corruption preventive obligations.

The Brazilian Anti-Money Laundering Law imposes that certain people – legal and natural – have the obligation of (i) identifying their  clients; (ii) maintain records of clients and operations and (iii) report certain financial operations that fit defined criteria.  In turn, the Brazilian regulation of the anti-money laundering law, aside from the law itself, has been inspired by the recommendations of the Financial Action Task Force[3] moving towards the concept of a “risk based approach” -“RBA”[4], allowing individuals subject to the terms of the law to  be more flexible in  their evaluation of the inherent risks of each operation,  and on the prevention measures to be adopted. Continue reading →

Anti-Corruption Enforcement in Mexico:  A Possible Turning Point?

by Andrew M. Levine, Kara Brockmeyer, and Marisa R. Taney

In recent years, anti-corruption enforcement has become increasingly globalized.  New anti-corruption laws have proliferated, along with deepening commitments to enforcing such laws.  Sometimes, like in Brazil, active enforcement has followed promptly after the adoption of new laws.  Other times, as in the case of Mexico, the journey from enactment to enforcement has proven more challenging. 

Amidst much fanfare, Mexico adopted its new National Anti-Corruption System in mid-2016.  Many hoped Mexico would seize the opportunity and shortly thereafter pursue significant anti-corruption enforcement.  But key posts within the anti-corruption system remained unfilled, and no significant enforcement ensued. Continue reading →

Disclosure and Notification Considerations When Managing a Crisis

by Cleary Gottlieb Steen & Hamilton LLP

Effectively dealing with a crisis often requires disclosure to government authorities, shareholders, and other stakeholders, even when many facts remain unknown.  Companies must toe a delicate line when assessing when, to whom, and how much to disclose, especially in the absence of complete information. 

Mandatory Disclosure

One of the first things a company should consider in a crisis is whether disclosure to authorities is mandatory.  Mandatory disclosure obligations vary widely across legal regimes and may be imposed by Congress, government regulators, self-regulatory bodies, or even stock exchanges.  For example, regulated entities may face immediate disclosure obligations to report violations of financial laws to FINRA (Rule 4530) or annual disclosure obligations to report misconduct to the CFTC in the entity’s chief compliance officer report (although earlier disclosure of a crisis may be advisable).  Often the relevant laws, rules, and regulations do not specify what information must be disclosed, injecting substantial discretion into what is otherwise a mandatory obligation. Continue reading →

State Attorneys General Jolt Antitrust Enforcement

by Joel Mitnick, Douglas Gansler, and Monica Martin

Cadwalader Expands AG Practice

Over the past year, State Attorneys General have stepped into what they describe as a void of antitrust enforcement at the federal level.  AGs have commenced investigations and brought antitrust actions across industry segments, including financial services, healthcare, telecommunications, technology and others.  The substance of the actions cover the waterfront of antitrust including price-fixing, merger enforcement and unfair trade practices. 

In this Clients & Friends Memo, we survey some of these high profile recent AG actions. Continue reading →

China Releases Updated Draft Encryption Law for Public Comment

by Yan Luo, Eric Carlson, Tim Stratford and Kurt Wimmer

On July 5, 2019, China’s Standing Committee of the National People’s Congress (NPC) published a new draft Encryption Law (“the draft Law”) for public comment.  The draft Law, if enacted as drafted, would bring significant new changes to China’s commercial encryption regime. 

The State Cryptography Administration (“SCA”) previously issued an initial draft of this law for public comment on April 13, 2017 (“the 2017 Draft”) (see Covington’s alert on the previous version here (PDF: 70 KB)).  After the release of the 2017 draft, the regulatory regime in China for commercial encryption products was revamped significantly (see Covington’s previous alert here (PDF: 88.3 KB)).  The State Council removed certain approval requirements for the production, sale, and use of commercial encryption products in late September 2017, and the SCA issued further notices reducing the burden imposed on manufacturers, distributors and users of commercial encryption products.  The draft Law proposes further changes to this revamped regime, including for example introducing different categories of encryption, and establishing license requirements for certain imports and exports, while carving out items in “general use.”

The comment period ends on September 2, 2019. Continue reading →

DOJ Expands Opportunities for Cooperation Credit in Criminal Antitrust Investigations

by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Arthur J. Burke, Ronan P. Harty, Neil H. MacBride, Tatiana R. Martins, Paul J. Nathanson, Howard Shelanski, Jesse Solomon

In a speech on July 11, 2019, Assistant Attorney General Makan Delrahim of the Antitrust Division of the Department of Justice (“DOJ”) announced that, for the first time, DOJ will consider the effectiveness of corporate compliance programs at the charging stage of criminal antitrust investigations.  Previously, under the Antitrust Division’s leniency program, only the first participant in the illegal activity to self-report could avoid a guilty plea; other cooperators received credit at sentencing.  Companies with effective compliance programs may now receive deferred prosecution agreements, even if they are not the first to self-report. Continue reading →

Dutch Cabinet Ministers Present Action Plan on Money Laundering to Dutch Legislators

by Jonathan J. Rusch

On June 30, two Ministers in the Dutch Cabinet — Minister of Finance Wopke Hoekstra and Minister of Justice and Security Ferdinand Grapperhaus – sent a joint letter to the President of the House of Representatives in the Dutch States-General (Parliament), outlining a series of new measures as an action plan to combat money laundering.[1]   The letter characterized money laundering as “an immense and complex problem” that made it very important that money laundering be combated “in a joint and effective manner.” [Note: All translations herein are unofficial.] Continue reading →

Assessing Risks and Potential Liability in Responding to a Crisis

by Cleary Gottlieb Steen & Hamilton LLP

A company faced with a crisis needs to act quickly to assess and determine the scope of any potential liability in order to guide its first response and frame the forthcoming investigation.  Issues overlooked in the early phases of an investigation could prove very costly down the road, limiting options or potentially subjecting a company to greater penalties.  Understanding the full scope of potential liability early in an investigation allows a company to develop a plan of action through consideration of how such penalties can potentially be mitigated and whether it is sensible to set aside reserves for potential fines and other expenses associated with an investigation.  The severity of such penalties may also shed light on who needs to be informed, including for example, whether any public disclosures will be necessary. 

In determining the scope of that liability and potential consequences, companies should think broadly about:  (1) civil or criminal enforcement liability, (2) the possibility of private civil litigation, (3) individual employee liability, and (4) collateral consequences flowing from the crisis.  The below is a non-comprehensive list of factors that companies should consider when assessing risks and liability at the outset of a crisis. Continue reading →

New CJIP Implementation Guidelines Further Align France with the US Anti-Corruption Enforcement Regime, But Key Differences Remain

by Laurent Cohen-Tanugi and Ann Y. Du

In December 2016, to strengthen its position in the international fight against corruption, the French government adopted a new anti-corruption law known as “Law Sapin 2.”  Law Sapin 2 introduced several innovations, including a new negotiated instrument labeled “convention judicaire d’intérêt public” (“CJIP”), modeled on the US deferred prosecution agreement (“DPA”).

On June 27, 2019, the Financial Prosecutor’s office (Procureur de la République financier, or “PRF”) published jointly with the French Anti-Corruption Agency (“AFA”) a set of guidelines on the implementation of CJIPs (the “Guidelines”). The Guidelines further align the new French enforcement regime with its US counterpart, notably with respect to its emphasis on cooperation and internal investigations, a centerpiece of the US enforcement system. However, several critical differences with US practice remain that may prove problematic in a multi-jurisdictional context.

While the Guidelines are not legally binding, they provide useful insight into future French enforcement policy and practices. Continue reading →

Policing Your Own Jardin – France Signals Eagerness to Take Control of Its White Collar Enforcement

by Antoine F. Kirry, Alexandre Bisch, Frederick T. Davis, Robin Lööf, Line Chataud, Ariane Fleuriot, Fanny Gauthier, and Alice Stosskopf

In light of well-publicized U.S. enforcement actions against French companies (Alstom, Total, Technip, Alcatel, BNP), the French government asked MP Raphaël Gauvain to consider measures to protect French companies faced with foreign extraterritorial judicial and administrative procedures. His long-awaited report was published on June 26, 2019. Entitled “Restoring French and European Sovereignty and protecting our companies from extraterritorial laws and measures,” this 100-page document points out the lack of effective legal tools available to French companies faced with extraterritorial proceedings. Drawing on this, the report makes several recommendations. Continue reading →