- OECD Report Released
- November 9, 2010 | Author: Susan Kohn Ross
- Law Firm: Mitchell Silberberg & Knupp LLP - Los Angeles Office
During an October webinar hosted by the Journal of Commerce and moderated by Susan Ross of Mitchell Silberberg & Knupp, Chuck Duross, Department of Justice (Justice) Deputy Chief, Fraud Section, Criminal Division, observed this will be a record year in terms of both the fines collected and the number of cases brought by Justice under the Foreign Corrupt Practices Act (FCPA). While the number of FBI and ICE teams working closely with Justice in bringing anti corruption cases remains basically the same, Justice is adding more prosecutors and other resources. The day of the webinar, the Phase 3 report issued by the international Organisation for Economic Co-operation and Development (OECD) Working Group on Bribery was released and is now posted on the Justice website; see http://www.oecd.org/dataoecd/10/49/46213841.pdf. The U.S. responses to the underlying questionnaire can be found at: http://www.justice.gov/criminal/fraud/fcpa/docs/response3.pdf and its supplemental responses at: http://www.justice.gov/criminal/fraud/fcpa/docs/response3-supp.pdf.
The FCPA applies to U.S. and foreign companies that trade shares on a U.S. exchange or take corrupt action within the U.S., plus officers, directors, employees, and agents who act on behalf of a U.S. company. Justice will impose criminal consequences and has the power to also impose civil fines, while it is the U.S. Securities and Exchange Commission that fines public companies when they record bribes inaccurately on their books and records, thereby masking the true value of the company's shares. It is the combined action of these two agencies that has led to the significant fines prominently publicized on the pages of most newspapers and many websites in recent years.
The OECD report makes clear that the U.S. has a number of laudable best practices, such as specialized resources for investigations and prosecutions, and innovative methods of resolution, including deferred prosecutions and non prosecutions. At the same time, the report found a lack of transparency and a lack of effective means to deal with small-and medium -size enterprises. The U.S. was represented during the OECD review process by personnel from Justice, Commerce, and State, along with the SEC. The U.S. and Finland are the only countries to have undergone a Phase 3 review. Since the Phase 2 review of the U.S. was completed in 2002, 88 enterprises and 71 individuals have been held accountable, with more than $3 billion in criminal and civil fines, criminal forfeitures, and civil disgorgements having been collected.