Presenting a live 90 ‐ minute webinar with interactive Q&A Foreign Corrupt Practices Act in India Compliance Strategies for India's Unique Cultural and Governmental Intricacies THURS DAY, MAY 26, 2011 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Robert C. Blume, Partner, Gibson Dunn & Crutcher , Denver Pedro A. Medrano, Counsel, Wilmer Cutler Pickering Hale and Dorr , New Y ork The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. p y p y g y p p Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
Continuing Education Credits FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: • In the chat box, type (1) your name , (2) your company name and (3) the number of attendees at your location number of attendees at your location • Click the arrow to send
Tips for Optimal Quality S S ound Quality d Q lit If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial 1-866-443-5798 and enter your PIN when prompted Otherwise please send us a chat or e mail when prompted. Otherwise, please send us a chat or e-mail sound@ straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Qualit y To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again press the F11 key again.
Foreign Corrupt Practices Act in India : Compliance Strategies for India's Unique Cultural and Governmental Intricacies Strafford Webinar Robert Blume Pedro A Medrano Pedro A. Medrano May 26, 2011
<Presentation Title/Client Name> A Agenda d • Brief Overview of the Foreign Corrupt Practices Act g p • India: Market of the Future • India: Anti-Corruption Enforcement and Trends • How to Mitigate Corruption Risk in India 5
<Presentation Title/Client Name> An Overview of the Foreign Corrupt Practices Act Foreign Corrupt Practices Act (“FCPA”) 6
<Presentation Title/Client Name> A Brief Overview of the FCPA A Brief Overview of the FCPA The Foreign Corrupt Practices Act was enacted in 1977 in the wake of reports that numerous U S 1977 in the wake of reports that numerous U.S. businesses were making large payments to foreign officials to secure business • Anti-Bribery Provisions: The FCPA prohibits giving or offering anything of value to a foreign government official, political party, or party official with the intent to influence that official in his or her official capacity or to p y secure an improper advantage in order to obtain or retain business • Accounting Provisions: The FCPA also requires publicly traded U.S. companies to maintain accurate “books and records” and reasonably i i i “b k d d ” d bl effective internal controls 7
<Presentation Title/Client Name> Scope of the FCPA: Who Is Covered? Scope of the FCPA: Who Is Covered? • Issuers: any company whose securities (including ADRs and registered debt) are registered in the United States or that is required to file periodic reports with the SEC • Domestic Concerns: any individual who is a U.S. citizen, national, or resident of the United States (not just U.S. citizens), or any business organization that has its principal place of business in the United States or which is organized in the United States • Other Persons who take any act in furtherance of a corrupt payment while within the territory of the United States 8
<Presentation Title/Client Name> Definition of “Foreign Official” Definition of Foreign Official The FCPA prohibits corrupt payments to “foreign officials,” which is expansively defined to include: is expansively defined to include: • Any officer or employee (including low-level employees and officials) of a foreign government or any department agency or government or any department, agency, or instrumentality of the government, which U.S. regulators have construed to include employees of government-owned or government-controlled g g businesses and enterprises • Officers and employees of public international organizations, such as the United Nations, World g , , Bank or other international financial institutions, the Red Cross, and others • Party officials and political candidates y p (including CPC) • Members of royal families 9
<Presentation Title/Client Name> What Constitutes a “Thing of Value”? What Constitutes a Thing of Value ? • Liability exists from the first yuan, rupee, or riyal – there is no p , y “de minimis” exception • It is not limited to tangible items of economic value • It can include anything a recipient i l d hi i i would find interesting or useful, including: • Gifts Gift • Trips T i • Theatre Tickets • Loans • Entertainment • Employment • Mooncakes • Consulting Fees g • Red Envelopes • Meals • Internships • Education • Professional Training • Political or Charitable Contributions 10
<Presentation Title/Client Name> Criminal Penalties Under the FCPA Number of FCPA Enforcement Actions Per Year Anti-Bribery Provisions • Corporations: criminal penalties 50 i include a $2m fine or twice the l d $2 fi t i th 48 45 pecuniary gain or loss and 40 possible suspension and 35 debarment by the U.S. 30 DOJ government government Actions 25 25 26 26 SEC • Individuals: criminal penalties 20 Actions 20 20 include up to five years’ 18 15 14 imprisonment, and a $250,000 13 10 fine or twice the pecuniary gain p y g 8 5 7 7 5 5 or loss 2 3 0 2004 2005 2006 2007 2008 2009 2010 Books-and-Records Provisions • Corporations: criminal penalties Corporations: criminal penalties India related enforcement India ‐ related enforcement 12 up to a $25m fine actions since 2000 • Individuals: criminal penalties include up to 20 years’ South and Central Asia 43 43 imprisonment, and a $5m fine p , $ enforcement actions since 2000 f 11
<Presentation Title/Client Name> Recent Blockbuster Enforcement Actions Recent Blockbuster Enforcement Actions 8 of the top 10 FCPA-related settlements are from 2010. Siemens (2008) $800 KBR/Halliburton (2009) $579 BAE (2010) BAE (2010) $400 $400 Snamprogetti Netherlands $365 B.V. / ENI S.p.A (2010) Technip S.A. (2010) $338 Daimler AG (2010) $185 Alcatel-Lucent (2010) $137.4 Panalpina (2010) $81.8 ABB Ltd. (2010) $58.3 Pride (2010) ( ) $56.1 $ * Includes the BAE Systems prosecution, which involved 12 international bribery but did not have any FCPA charges. * Settlement amounts are in millions.
<Presentation Title/Client Name> FCPA Enforcement Actions By Country FCPA E f A i B C (January 2000 - March 2011) ( Minimum 5 Enforcement Actions ) 60 55 50 45 40 35 30 30 25 20 15 10 5 0 13
<Presentation Title/Client Name> Exceptions and Affirmative Defenses Exceptions and Affirmative Defenses • The FCPA permits payments to government officials in only a f few, very narrow circumstances: i t 1) Facilitating payments 2) Payments expressly permitted by the written laws of the host country 3) “Reasonable and bona fide expenditure[s], such as travel and lodging expenses . . . directly related to (A) the promotion, demonstration, or explanation of products or services; or (B) the execution or performance of a contract with a foreign government or agency thereof.” • These are all very narrow exceptions y p and defenses 14
<Presentation Title/Client Name> Facilitating Payments Exception Facilitating Payments Exception • Very limited exception for payments made to expedite or secure performance of “routine governmental action” g • Limited to payments that “merely move a particular matter toward an eventual act or decision” – applies only when the government official has no discretion in performing duties • Payment must be for something to which the payor was already entitled, e.g., the y g p y y g mere receipt of an application, as opposed to approval of the application • Payment must still be nominal • Best practices counsel to prohibit facilitation payments entirely – 80% of p y y U.S. companies have banned them • India , China, and many other countries do not allow facilitation payments • U.K. Bribery Act does not exempt facilitation y p payments • OECD encourages prohibition of facilitation payments 15
<Presentation Title/Client Name> 16 Market of the Future India:
Recommend
More recommend
