As the Foreign Corrupt Practices Act (FCPA) turned 35 years old in 2012, the surge in enforcement activity that was first observed five years ago appears to be leveling off. Nevertheless, numerous events in 2012 signal a statute that is maturing rather than falling into obscurity: the first sustained pattern of trial activity; increasing ability and enthusiasm by the government to conduct industrywide investigations; and serious policy debates between industry, executive and legislative interests leading up to the much-anticipated issuance of statutory guidance from the government.
In 2012, the U.S. Department of Justice (DOJ) initiated 13 prosecutions and the U.S. Securities and Exchange Commission (SEC) opened 12 enforcement actions, with the pace of enforcement actions dropping significantly from 2011.
However, rather than signaling a relaxing of FCPA enforcement, this reduced case initiation likely reflects the DOJ's preoccupation with issuing the much-anticipated FCPA resource guide, preparing for trials and closing the last Chapter on some of its less successful enforcement actions.
Though the number of new actions may have abated, the scope of FCPA activity has expanded, spilling into courtrooms and Congress. Enforcement efforts remain robust and show no indication of a decline. Recent FCPA cases and trends reflect:
* Increased variations in the use of compliance monitors;
* Continued pursuit of individuals in the aftermath of company settlements;
* Industry-wide investigations are on the rise and the government's sweep of the medical device industry is showing results; and,
* Compliance and cooperation are the keys to preventing prosecution or, at the very least, greatly reducing penalties.
Coming off a string of disappointing courtroom setbacks the DOJ and SEC will look to improve their outcomes, while some defendants will take these setbacks as a basis to skip settlement and. look to fight the government. In success and in failure, FCPA enforcement has established itself as headline legal news, and this year is not likely to be a quiet One for the FCPA.
DOJ Issues Resource Guide
A Resource Guide to the U.S. Foreign Corrupt Practices Act--the DOJ's and SEC's detailed compilation of guidance on the act and its enforcement--was released in November 2012. It endeavors to provide a multifaceted approach, along with insight into DOJ and SEC enforcement. The long- promised and much-awaited detailed guidance emerges out of the larger context of continued public debate on FCPA reform.
Congressional interest in FCPA reform form has been high over the past two years, with multiple hearings on enforcement and reform proposals. With organizations like the U.S. Chamber of Commerce's Institute for Legal Reform continuing its focus on the reforms, the debate will certainly continue and may yet produce...