Category Archives: Bribery and Corruption

Biden: The Fight Against Foreign and Transnational Corruption Is a National Security Interest

by Kimberly A. Parker, Jay Holtmeier, Christopher Cestaro, John F. Walsh, Edward C. O’Callaghan, Ronald C. Machen, Lillian Howard Potter, Chavi Kenney Nana, Zachary Goldman, Mandy Fatemi, and Gemma Bateman

On June 3, 2021, President Biden issued a National Security Memorandum establishing the fight against corruption both at home and abroad as a core United States national security interest and directing the development of a 200-day interagency review designed to culminate in a report and recommendations on how the United States government and its partners can better combat corruption, enhance transparency in the global financial system and promote good governance. When combined with the anti-money laundering (AML) legislation that entered into force with the January 2021 bipartisan passage of the National Defense Authorization Act for Fiscal Year 2021 (NDAA)[1]—the most significant reforms to US AML laws since the 2001 adoption of the USA PATRIOT Act—and a review of sanctions policy conducted by the Treasury Department, the Memorandum may lead to a heightened focus on illicit financial activity and corruption and may ultimately result in additional resources being allocated to anti-corruption and AML enforcement. Continue reading →

UK Steps Up Enforcement Efforts with New Global Anti-Corruption Sanctions Regime (Part II of II)

by Ryan D. Junck, Elizabeth Robertson, and Zahra Mashhood

This is Part II of a two-part post. This Part discusses practical ramifications of the UK’s new Global Anti-Corruption Sanctions Regulations. For Part I, discussing technical aspects of the regulations, click here.

The new Global Anti-Corruption Sanctions Regime is a further step by the UK on its path to forge its own post-Brexit sanctions policy. It mirrors the approach taken by its international partners, the US and Canada, both of which already have systems in place that impose sanctions on people and entities based on allegations of corruption. For example, under the new rules, the UK sanctioned current Guatemalan official Felipe Alejos Lorenzana on the same day the US did. Furthermore, a large number of the individuals on the UK’s list have already been sanctioned by the US.

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UK Steps Up Enforcement Efforts with New Global Anti-Corruption Sanctions Regime (Part I of II)

by Ryan D. Junck, Elizabeth Robertson, and Zahra Mashhood

This is Part I of a two-part post. This Part discusses the technical aspects of the UK’s new Global Anti-Corruption Sanctions Regulations. For Part II, discussing practical ramifications of the regulations, click here.

On 27 April 2021, the UK implemented its new Global Anti-Corruption Sanctions Regime, enhancing its existing Global Human Rights Sanctions Regime, which came into force in July 2020. The new Global Anti-Corruption Sanctions Regulations 2021 (the Regulations) enable the UK Foreign Secretary to impose asset freezes and travel bans on designated individuals and entities linked to certain corrupt activities, and criminalises the breach of those sanctions within the UK, as well as any breach by any UK individual or UK entity wherever located. That includes UK subsidiaries of foreign companies.

The purpose of the regime is to prevent and combat serious governmental corruption, by stopping those involved from entering and channelling money through the UK. The system is broadly similar to those in place in the US and Canada. The regime has been implemented under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA), which established the legal framework for the UK to introduce new sanctions regimes post-Brexit.

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Three Key Takeaways from the DOJ Fraud Section’s 2020 Annual Report

by Andrew Weissmann and Tali R. Leinwand

Last week, the Fraud Section, part of the U.S. Department of Justice’s (DOJ’s) Criminal Division, released its annual year-in-review report.[1] In this post, we highlight three key takeaways from the 2020 report.

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With Lava Jato Closing Up Shop, What Comes Next?

by Sean Hecker, Marshall Miller, and Ana Frischtak

The largest criminal investigation in Brazil’s history – and perhaps this century’s most important anti-corruption investigation worldwide – came to a close last week.  Operation “Lava Jato” (“Car Wash,” in English) was launched by the Curitiba[1] branch of the Brazilian Federal Police in 2014, (later known as the Curitiba Task Force).[2]  The Operation, which drew its name from a car wash in Brasília where one of the targeted criminal organizations laundered illicit funds, uncovered a widespread, complex, and unprecedented web of corruption implicating Brazil’s giant state-owned oil company, Petrobrás, public officials, and Brazil’s largest construction companies in a sweeping contracts-for-kickbacks scheme. Operation Lava Jato ultimately expanded to expose bribery and graft in numerous other industries, involving dozens of politicians and government officials, and an almost countless number of companies, both Brazilian and multinational.

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White-Collar and Regulatory Enforcement: What Mattered in 2020 and What to Expect in 2021

by John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Sarah K. Eddy, Lauren M. Kofke, Carol Miller, and Tamara Livshiz

As we write this memorandum, a new administration is forming in Washington, with new leadership teams being nominated at DOJ, SEC, CFTC and other regulatory and law-enforcement agencies — thus prompting the question of what these changes may portend for white-collar and regulatory enforcement priorities, trends and policies. Having watched many administrations come and go over the years, our sense is that, in this area at least, continuity tends to prevail over disruption. That said, we can offer the following educated guesses on what to expect going forward:

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Congress Passes Anti-Money Laundering Legislation Banning Anonymous Shell Companies

by Andrew Weissmann, David Bitkower, Tali R. Leinwand, Sarah F. Weiss, E.K. McWilliams, and Wade A. Thomson

Last week, a law designed to thwart the use of US shell companies by drug traffickers, terrorists, foreign adversaries, and others seeking to shield the provenance of their funds cleared Congress with bipartisan support. The Senate joined the House in overriding President Donald Trump’s veto of the National Defense Authorization Act for Fiscal Year 2021 (NDAA), which includes a variety of reforms to anti-money laundering (AML) laws.

The key reform requires certain companies to disclose their ultimate owners to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), making it harder for certain criminals to manipulate shell companies to launder money or evade taxes.[1] Although the law has various loopholes, it enhances the government’s ability to detect and deter the use of shell companies to commit crime.

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A Step Towards More Responsibility in Banking

by Claire A. Hill

Goldman Sachs recently admitted that it conspired to violate the Foreign Corrupt Practices Act’s (FCPA’s) anti-bribery provisions.  It agreed to pay a significant monetary fine and to enter into a deferred prosecution agreement.  These sorts of resolutions are common when companies are charged with violating the law.  But Goldman did something that is not common: it clawed back or reduced compensation for senior executives not directly involved in the wrongdoing.  It clawed back some amounts paid to senior executives during the time the misconduct was occurring, and it reduced 2020 compensation of present top management. Continue reading →

The Airbus Triple Resolution: A Landmark Case in Europe and America

by Michel A. Perez

With the triple coordinated resolution of the Airbus case announced simultaneously on January 31, 2020 in Washington, London and Paris, negotiated corporate settlements reached new heights in Europe. Airbus is the second largest aerospace company in the world after Boeing. It is a consortium of British, French, German and Spanish units with its head legal office in the Netherlands. For more than a decade, the company was suspected by regulatory authorities in Europe and the United States of using bribes to promote its sales.

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AML Regulators Clarify Diligence Requirements for Politically Exposed Persons

by Katherine Mooney Carroll, Paul Marquardt, Patrick Fuller, and Graham Bannon

On August 21, the Financial Crimes Enforcement Network (FinCEN), together with the federal banking agencies[1] (the “Agencies”), released a statement (PDF: 220 KB) (“Statement”) to clarify banks’ customer due diligence (“CDD”) obligations for politically exposed persons (“PEPs”). The Statement affirms that (i) there is no regulatory requirement, and no supervisory expectation, for banks’ Bank Secrecy Act (BSA) / anti-money laundering (“AML”) programs to include “unique, additional due diligence steps” for customers who are PEPs and (ii) there is no regulatory requirement for banks to screen customers and their beneficial owners for PEPs. Instead, the Statement confirms that PEP customers should be subject to the same risk-based approach to CDD that applies to any other customer, but that PEP status (and screening for PEPs) may be a factor in developing a customer risk profile and assessing money laundering risk. It also reminds banks of the continued U.S. national security and law enforcement interest in detecting and combating public corruption and other criminality involving PEPs.

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