Yesterday, I began to conclude all five of Shakespeare’s Problem Play, by looking at “A Winter’s Tale”.  Today, I round out the series by discussing the final play considered in this oeuvre, “Timon of Athens”. While the first four Problem Plays are most generally described as a play where the mask of comedy (not the mask of tragedy) ends the plays; i.e. everyone gets married at the end of the day, even though these were really not happy endings. They are not precisely tragedies either because of one or more comedic element. Usually in the middle is some very dark part, which tests the reader, play-goer or listener with some very difficult subjects. However today’s offering is a Problem Play for yet another reason – it does not seem to be finished.

First, the play was apparently co-written by Shakespeare with Thomas Middleton. Moreover, much about this play makes it seem unfinished including unexplained plot developments, characters who appear unexplained and say little, and the two epitaphs. “The Riverside Shakespeare” calls Timon of Athens “a poor relation of the major tragedies.” Finally, according to Nicole Gluckstern, the play “doesn’t appear to have ever been performed during Shakespeare’s time.”According to Tom Cardy, “The story revolves around Timon, described as a kind and generous lord in Athens, who has many friends whom he showers with gifts. But when Timon falls into debt they abandon him. He leaves the city and plots his revenge.” Yet things get very sticky, ugly and even bizarre as Timon plots his revenge. He funds the general Alcibiades to destroy the Athens that has abandoned him and they pays two prostitutes to continue to ply their trade and infect the city with venereal disease. To end it all, Alcibiades ends the play reading the bitter epitaph Timon wrote for himself,

Here lies a wretched corpse of wretched soul bereft:

Seek not my name: a plague consume you wicked caitiffs left!

Here lie I, Timon, who alive, all living men did hate,

Pass by, and curse thy fill, but pass and stay not here thy gait.

The Foreign Corrupt Practices Act (FCPA) world is littered with cases involving freight forwarders, brokers and agents in the shipping and express delivery arena. Both the Department of Justince (DOJ) and the Securities and Exchange Commission (SEC) have aggressively pursued third party business relationships where bribery and corruption have been found. This is particularly true where companies are required to deliver goods into a foreign country through the assistance of a freight forwarder or express delivery service. There are several major risk points. These include:

• Location, location, location;
• Customs and other governmental agencies;
• Aviation and postal regulators;
• Business promotion expenditures for governmental officials;
• Agents and sub-agents; and
• Government accounts are a major part of express shipper customers so must analyze this as well.

How can a company respond to protect itself or at least reduce its potential FCPA risk with regards to a logistics company, freight forwarder or express delivery company? One way is through the use of a creative tool dubbed the “Min Model.”

James Min, former Vice President and Global Head of International Trade Law for Deutsche Post DHL in its Legal Department, developed a risk matrix for the freight forwarders/express delivery industry. In this Min analyzes risks by multiplying factors noted herein and thus scoring. This model shows that location should not be the sole criteria for risk. The factors in the Min Model are the performance of your company’s customs clearance brokers and how far that performance varies from the norm your company normally receives. In the below chart, +1.00 equals average clearance time. >1.0 equals faster than average and <1 means slower than average.

The Min Model

The key in this approach is how often the Customs Broker/Express Delivery Service varies above the average for customs clearance times. If the percentage of customs clearance performance is so great that your vendors variance is above 100% most of the time, this could be a Red Flag that bribery or corruption is involved. This should lead to further investigation, due diligence, or asking questions of your vendor.

Almost every business transaction engaged in by a freight forwarder, express delivery service or customs broker, outside the US involves a foreign governmental official. Every time your company sends raw materials into or brings them out of a country there is an interaction with a foreign governmental official in the form of a Customs Official. Every customs transaction involves a payment to a foreign government and every transaction involves some form of a foreign governmental regulatory process. While the individual payment per transaction can be small, the amount of total transactions can be quite high, if a large volume of goods are being imported into a foreign country.

Conversely interacting with international tax authorities can present problems similar to those with customs officials, but the stakes can often be much higher since tax transactions may be less in frequency but higher in financial risk. These types of risks include the valuation of raw materials for VAT purposes before such materials are incorporated into a final product, or the lack of segregation between goods to be sold on the foreign country’s domestic market as opposed to those which may be shipped through a free trade zone for sale outside that country’s domestic market.

Timon of Athens did not seem to have a process in mind when he gave all his possessions away. In the forest, he could only seethe with rage and contemplate the destruction of his former city and friends. Creative uses of your own risk ranking tools will go a long way in determining your company’s FCPA liability. You must have a thoughtful process and document that process.

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