Category Archives: DPAs and NPAs

English High Court Considers Status of Internal Investigation Interview Notes

by Karolos Seeger, Andrew Lee, and Robin Lööf

In R (AL) v Serious Fraud Office,[1] the English High Court considered the SFO’s obligations to individuals prosecuted following the deferred prosecution agreement (“DPA”) in July 2016 with a company anonymised as “XYZ Ltd”. The Court’s decision is likely to force the SFO to adopt a much more aggressive approach in relation to company counsel’s notes of interviews conducted during a company’s internal investigation. In particular, when those interview notes are potentially relevant to the defences of individuals being prosecuted, this judgment is likely to lead to the SFO putting further pressure on companies to produce the notes, through court proceedings if necessary. We analyse these and other issues covered by the judgment below. Continue reading

Singapore Introduces Deferred Prosecution Agreements

by Zachary S. Brez, Brigham Q. Cannon, Mark Filip, Asheesh Goel, Cori A. Lable, Kim B. Nemirow, Abdus Samad Pardesi, Richard Sharpe, William J. Stuckwisch, Marcus Thompson, Satnam Tumani, and Jodi Wu

On 19 March 2018, Singapore passed legislation introducing the concept of the deferred prosecution agreement (“DPA”) to the jurisdiction for the first time. Under the new laws, corporations (but not individuals) facing prosecution for offences of corruption, money laundering or receipt of stolen property may attempt to negotiate the terms of a DPA with prosecuting authorities, under which they would avoid prosecution, in return for adherence to various conditions imposed upon them, for a set period of time.

By introducing the DPA as an enforcement tool, Singapore joins the ranks of the United States[1], Brazil[2], the United Kingdom[3] and France,[4] which form the vanguard of an increasingly consistent global approach to corporate criminal resolutions. Australia and Canada are also both currently evaluating whether to introduce similar legislation. Continue reading

The Jury is Out on Compliance in the First Test of the Bribery Act’s Adequate Procedures Defence

by Omar Qureshi, Iskander Fernandez, and Amy Wilkinson

Last month saw the first contested prosecution of a corporation for failure to prevent bribery under section 7 of the U.K. Bribery Act 2010 (the “Bribery Act”), providing the first insights into how such a case may be argued and determined.  The defendant company Skansen Interiors Limited (“SIL”) was found guilty of failing to prevent bribery by one of its employees, who paid £10,000 (and offered, and tried to secure payment of a further £29,000) to another in order to secure two contracts for SIL.  The individuals involved had already pleaded guilty to substantive bribery offences.

A jury found SIL did not have adequate procedures designed to prevent bribery.  While the judge did not give her views on what may constitute adequate procedures and why SIL’s fell short, the jury’s verdict indicates that even small companies may need to have documented and targeted procedures in place, specifically addressing bribery prevention, if they are to succeed in proving an adequate procedures defence. Continue reading

First French DPAs for Corruption Offences

by Antoine Kirry, Karolos Seeger, Alex Parker, Alexandre Bisch, and Robin Lööf

On March 5, 2018, French prosecutors published two Judicial Conventions of Public Interest (“CJIPs” or “French DPAs”) approved by the President of the High Court of Nanterre on February 23. The CJIPs, entered into between prosecutors and two sub-contractors to state-owned utility EDF, SAS Kaefer Wanner (“KW”) and SAS SET Environnement (“SET”), allege that these companies had ceded to solicitations to pay bribes to an EDF procurement manager, and that this behaviour amounted to corruption by them of an individual charged with a public service. KW and SET admitted these facts and their legal qualification[1], and agreed to pay financial penalties of €2,710,000 and €800,000 respectively and compensation to EDF of €30,000 each. In addition, they agreed to submit to monitoring by the French Anti-corruption Agency (“AFA”) for, respectively, 18 and 24 months.

The KW and SET CJIPs are the first to be concluded in respect of corruption offences. Helpfully, they provide (1) detail on the financial incentive of entering into a French DPA for companies with potential exposure for corruption-related offences in France, (2) clarification that co-operation and remediation can significantly reduce the financial penalty, as well as (3) the first examples of monitorships to be supervised by the AFA. However, the crucial question of how a company can qualify for a French DPA remains largely unanswered. Continue reading

The New DOJ FCPA Corporate Enforcement Policy Highlights the Continued Importance of Anti-Corruption Compliance

by Lisa Vicens, Jonathan Kolodner, and Eric Boettcher

In a significant development for companies relating to the Foreign Corrupt Practices Act (FCPA), in late November the U.S. Department of Justice (DOJ) announced a new FCPA Corporate Enforcement Policy (the Enforcement Policy).

The Enforcement Policy[1] is designed to encourage companies to voluntarily disclose misconduct by providing greater transparency concerning the amount of credit the DOJ will give to companies that self-report, fully cooperate and appropriately remediate misconduct. Notably, in announcing the Enforcement Policy, the DOJ highlighted the continued critical role that anti-corruption compliance programs play in its evaluation of eligibility under the Enforcement Policy. Continue reading

Global Anti-Bribery Year-in-Review: 2017 Developments and Predictions for 2018

by Kimberly A. Parker, Jay Holtmeier, Erin G.H. Sloane, Lillian Howard Potter, Tetyana V. Gaponenko, Victoria J. Lee, and Roger M. Witten

This past year marked the 40th anniversary of the U.S. Foreign Corrupt Practices Act (“FCPA”).  Since its enactment in 1977, the U.S. Department of Justice (the “DOJ”) has brought approximately 300 FCPA enforcement actions, while the U.S. Securities and Exchange Commission (the “SEC”) has brought approximately 200 cases.[1]  This anniversary year, the first year of the Trump administration, demonstrated that the FCPA continues to be a powerful tool in combating corruption abroad and encouraging compliance at global companies.

Below are six key take-aways regarding FCPA enforcement in 2017: Continue reading

DOJ Expands and Codifies Policy Incentivizing Corporations to Voluntarily Self-Disclose FCPA Violations

by Eric Volkman, Erin Brown Jones, and Bridget R. Reineking

On November 29, 2017, Deputy Attorney General Rod J. Rosenstein announced that the US Department of Justice (DOJ) has implemented a permanent, revised version of the Foreign Corrupt Practices Act (FCPA) Pilot Program.[1] The Pilot Program — which was launched as a one-year trial in April 2016 by then-Assistant Attorney General for the Criminal Division (and now Latham partner) Leslie Caldwell — was extended indefinitely in April 2017 to allow DOJ to evaluate the program’s efficacy.[2] Rosenstein announced that the enhanced policy — now called the FCPA Corporate Enforcement Policy (PDF: 51 KB) (FCPA Policy) — will be incorporated into the United States Attorneys’ Manual (USAM). Like its predecessor, the FCPA Policy aims to encourage companies to make timely and voluntary disclosures of wrongdoing under the FCPA, while providing additional concrete incentives rewarding corporations for cooperation.

This policy announcement is likely the first of several DOJ policy changes and/or enhancements under the new administration. As detailed in Latham’s October 2017 Client Alert (PDF: 93.58 KB), Rosenstein recently announced that DOJ was reviewing a wide range of existing corporate enforcement policies, including the Pilot Program, DOJ’s policy on “Individual Accountability for Corporate Wrongdoing” (the Yates Memo), and other DOJ policies and memoranda — with the intention of ultimately incorporating the revised policies into the USAM. Continue reading

A French Court Authorizes the First-Ever “French DPA”

by Frederick T. Davis

In December 2016 the French government finally passed the so-called “Loi Sapin II” in order to bolster its ability to penalize overseas bribery. Its unstated but clear goal was to achieve some degree of parity with US efforts in this area, which had led to a number of highly publicized cases where well-known French companies had paid fines totaling well over $2 billion to the US treasury to resolve criminal matters that could well have been resolved in France.  A key provision of the new law is a procedure that permits a negotiated outcome, similar in concept to a US Deferred Prosecution Agreement (“DPA”), that avoids a criminal conviction.  On November 14, 2017, the first such agreement was announced by the National Financial Prosecutor of France.  While many details of the deal will not be known until the release of the court’s opinion approving it, which may be available as early as the end of November, the fact of the outcome and its known parameters are very significant. Continue reading

Negotiated Corporate Criminal Settlements: Bringing DPA Mandates Within the Rule of Law

by Jennifer Arlen

Countries around the world are beginning to embrace negotiated corporate criminal settlements, cognizant of U.S. federal prosecutors’ success in using deferred and non-prosecution agreements (hereinafter D/NPAs) to impose both substantial monetary sanctions and mandated reforms. Negotiated settlements, and the mandates they impose, can materially enhance governments’ ability to deter corporate crime when used effectively (Arlen and Kahan 2017).

Yet the existing U.S. approach to mandates needs to be reformed because it suffers from a material weakness: the Department of Justice provides less guidance and formal oversight over mandates imposed through D/NPAs than is required to ensure that prosecutorial authority over mandates is consistent with the Rule of Law.

Continue reading

Second Circuit Limits District Courts’ Supervision of Deferred Prosecution Agreements

by Brandon Fox and Natalie K. Orpett

The Second Circuit Court of Appeals has issued an important decision limiting district courts’ authority to supervise Deferred Prosecution Agreements (DPAs), a method companies and the Department of Justice (DOJ) frequently use to resolve criminal investigations.  Under DPAs, companies are charged with – but not convicted of – crimes, so long as they abide by the terms of the agreement.  In United States v. HSBC Bank USA, N.A. (PDF: 248 KB), — F.3d –, 2017 WL 2960618 (2d Cir. July 12, 2017), the companies (collectively, HSBC) and DOJ agreed to a DPA based on HSBC’s alleged failure to prevent money laundering by Mexican drug cartels and violations of sanctions laws.

Under the terms of the DPA, HSBC consented to the appointment of a monitor who was to provide DOJ with periodic reports regarding HSBC’s compliance with the agreement.  After arraignment on the charges, DOJ and HSBC requested that the court grant an exclusion of time under the Speedy Trial Act, which was necessary so that HSBC could fulfill its obligations under the DPA rather than go to trial in 70 days.  As a condition to granting the motion, the district court ordered the parties to file quarterly reports apprising it of significant developments in HSBC’s efforts to comply with the DPA. Continue reading