CEP Magazine, December 2019
Big business in emerging markets often involves paying off the officials in charge of critical applications processes, or purchasing and beneficial tax arrangements. Over the years, many companies have faced fines or other enforcement actions in Asia. The recent spate of Securities and Exchange Commission (SEC) decisions addresses corruption and bribery in overseas businesses, and also the widespread practice of hiring the sons and daughters of local officials, or otherwise supporting the local officials’ families.
Barclays PLC was caught up in the practice,[1] and several more companies have faced fines for Foreign Corrupt Practices Act (FCPA) violations, including most recently Westport Fuel Systems Inc. of Vancouver, Deutsche Bank AG, JPMorgan Chase, and Qualcomm Inc.
In August, Deutsche Bank paid the SEC $16 million to settle FCPA offenses related to its hiring of relatives of public officials in China and Russia.
In mid-2018, Credit Suisse Group AG agreed to pay a $47 million penalty to the U.S. Department of Justice (DOJ) to end an FCPA investigation into hiring practices in Asia.
In 2016, JPMorgan Chase paid $264 million in penalties for awarding jobs to relatives and friends of Chinese government officials to win banking deals. The FCPA enforcement action was brought by the DOJ, SEC, and the Federal Reserve.
In 2015, BNY Mellon paid $14.8 million to the SEC to resolve FCPA offenses for providing internships to family members of officials connected to a Middle Eastern sovereign wealth fund.
In 2016, mobile chipmaker Qualcomm Inc. paid the SEC $7.5 million to settle FCPA offenses for hiring relatives of Chinese government officials. The officials were deciding whether to select the company’s mobile technology products, the SEC said.