Monday, November 1, 2010
Guest Blogger - T. Markus Funk
OECD Report's Targeted Recommendations
Transitioning from the descriptive to the proscriptive, the October 21, 2010, OECD Phase 3 report also contains a number of specific reform recommendations:
- Continue transnational law enforcement cooperation and evidence-sharing to up transnational gains in the global anti-bribery fight.
- Consider extending the FCPA's statute of limitations to 10 years to permit adequate time for investigation and prosecution of these complex financial cases.
- Reduce business and legal-community uncertainty by more clearly defining what qualifies as a "facilitation payment," spelling out that the term covers not only bribes for obtaining and retaining business, per se, but also improper payments to secure foreign licenses, permits, etc.
- Boost transparency, public understanding, and compliance by explaining when, how, and why DOJ and SEC use plea agreements, deferred-prosecution agreements, and non-prosecution agreements, and what circumstances trigger the decision to require corporate monitors.
- Increase use of debarment and arms export license denials (that is, increase use of "Excluded Parties List System") to punish companies engaging in foreign fraud.
- Consolidate, summarize, and make publicly-available information on the real-world application of FCPA, including on affirmative defense of reasonable and bona fide expenses.
- Revise Criminal Resource Manual to explicitly state that the "business nexus test" includes bribes to foreign public officials to (1) obtain or retain business or (2) gain some other improper advantage in the conduct of international business.
- Increase efforts to raise FCPA awareness, and increase deterrence and bribery-detection, among small-to-medium size businesses.
- Boost awareness of need to pursue books and records violations under the FCPA, including offense of misreporting facilitation payments.
- Clarify that state-owned or state-controlled enterprises, persons holding judicial offices in a foreign country, and persons or institutions, such as state-controlled or state-owned enterprises, exercising a public function for a foreign country qualify as "foreign officials" for FCPA purposes.
- Consider subjecting deferred-prosecution agreements to greater judicial scrutiny, and provide mechanism for judicial screening of non-prosecution agreements.
Viewed from the DOJ and SEC's perspective, the landmark OECD report provides welcome external validation of the effectiveness of their mounting anti-corruption efforts. The U.S., in short, has not only complied with the OECD Anti-Bribery Convention, but has done so to an extent that, according to the report, deserves to be emulated worldwide. U.S. diplomatic pressure, surely buoyed by the OECD's encouraging findings, signals an era of continued domestic and international efforts to stem the tide of global corruption. Companies that fail to appropriately adapt to this new enforcement reality risk exposure not only to massive fines and financial penalties, but also to stiffening criminal sanctions. As the OECD report vividly illustrates, this is a risk increasingly difficult to justify.
For the full text of the OECD Phase 3 report: http://www.oecd.org/dataoecd/10/49/46213841.pdf
The corresponding USDOJ press release can be found at http://blogs.usdoj.gov/blog/archives/1020
By T. Markus Funk (firstname.lastname@example.org). Markus is a partner in Perkins Coie's Investigations and White Collar Defense Group. Markus spent the past 10 years as an Assistant U.S. Attorney in Chicago, Illinois, most recently serving in U.S. Attorney Patrick Fitzgerald's Public Corruption and Organized Crime Section. Markus' full bio is at www.perkinscoie.com/mfunk