Top Ten International Anti-Corruption Developments for July 2016

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: Which companies reached resolutions with the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), the Serious Fraud Office (SFO), and a host of Brazilian authorities? What aspect of Mexico's new anti-corruption regime was called a “game changer”? Which Asian country saw the release of a new set of anti-corruption compliance guidelines? The answers to these questions and more are here in our July 2016 Top Ten list:

1. South American Airline Resolves Argentina FCPA Accounting Provision Allegations. In February 2016, SEC announced that Ignacio Cueto Plaza, the CEO of South America-based LAN Airlines, had agreed to settle claims that he violated the FCPA’s accounting provisions by authorizing payments to a third-party consultant in 2007 despite knowing that the consultant might pass money onto union officials in Argentina to help resolve a labor dispute. On July 25, 2016, DOJ and SEC announced that they had reached resolutions with the company for a combined penalty of approximately $22.2 million based on the same allegations. There were some notable aspects of the corporate resolutions. Although neither agency alleged that the union officials were “foreign officials” under the FCPA, both agencies characterized the consultant as an “advisor” to Argentina’s Ministry of Transportation. This suggests that they might have viewed the consultant as a person “acting in an official capacity for or on behalf of” the Ministry and, therefore, a “foreign official” under the FCPA. Read this way, any money that the consultant kept for himself in exchange for intervening in a labor dispute within the scope of his Ministry could arguably be characterized as a bribe under the FCPA. However, the SEC Order notes that the consultant held an “ad-honorem” position given to him “pursuant to an unpublished Resolution.” This further suggests that the agencies might not have been willing to test this “foreign official” theory, which they were able to avoid by bringing accounting charges instead...

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