With M&A activity in the energy sector still buoyant, particularly in developing economies, the need for effective and risk sensitive diligence into potential bribery and corruption by target entities is becoming more important than ever.
US Experience
FCPA due diligence is now standard in energy M&A transactions, in the main because the Department of Justice (“DOJ”) has taken enforcement actions for failures by purchasers to conduct proper pre-closing and post-closing diligence.
It is the DOJ’s view that liability can attach to purchasers for pre-closing conduct of the target and has accordingly brought actions consistent with this view. In its Opinion Procedure Releases (notably in relation to Haliburton’s proposed purchase of a UK-based company), the DOJ advised that a purchaser can minimise its (or insulate itself from) liability for unlawful payments made by entities it acquires by performing adequate due diligence prior to acquisition, disclosing any pre-acquisition misconduct to the government, and implementing effective compliance procedures thereafter.
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