FCPA Enforcement Actions Fall to Lowest Level in a Decade

The level of Foreign Corrupt Practices Act (FCPA) enforcement activity in 2021 was the lowest in a decade.

Stanford FCPA Clearinghouse

That’s the conclusion of a report from Stanford University’s FCPA Clearinghouse. 

According to the report, the Department of Justice and the Securities and Exchange Commission (SEC) filed only 18 enforcement actions in 2021. 

The FCPA enforcement activity in 2021 was the lowest in a decade and significantly below the ten-year average of 36.

“This remarkable falloff in activity may be the initial result of the steady decline in publicly-disclosed investigations witnessed over the last four years,” the report’s authors speculated. “If so, the level of activity could remain slow over the next few years. That said, policy changes initiated in the first year of the Biden administration may cause the number of FCPA-related investigations and enforcement actions to increase over the coming years. In the more immediate future, at least two companies, Stericycle, Inc. and Honeywell International Inc., disclosed accruals in 2021 in anticipation of the settlement of their FCPA investigations.”

Former Department of Justice FCPA unit chief Daniel Kahn is now a partner at Davis Polk in Washington, D.C. Kahn told Corporate Crime Reporter that “there’s inherent variability in corporate enforcement so it’s always unwise to read too much into numbers in a given year.”

“That said, there are a number of reasons that make it unsurprising that this was a down year, including that new administrations often scrutinize cases in the pipeline, resolutions are increasingly being coordinated with multiple foreign authorities, as well as the ongoing pandemic, all of which could lead to a delay in the announcement of corporate resolutions,” Kahn said.  “But given the pipeline of cases, as well as repeated statements by Department of Justice and SEC officials about their commitment to fighting corruption and additional resources they are devoting to it, I think you will see a lot of resolutions announced in 2022.  Officials have also stressed the importance of prosecuting individuals, and this year was on par with previous years in terms of the number of charges and convictions.”

And the current heads of the enforcement agencies at the SEC and the Department of Justice predicted the FCPA pipeline will produce increased action soon.

David Last, chief of the Department of Justice’s FCPA unit, and Charles Cain, head of the Securities and Exchange Commission’s FCPA unit, appeared late last year at an FCPA conference outside of Washington, D.C.

According to a report from attorneys at Arnold & Porter who attended the event, both Last and Cain said their units are busy at work, new enforcement actions are expected to be announced over the coming months and “the pipeline is strong.”

Last and Cain noted that “information continues to flow in from whistleblowers, cooperating witnesses, companies making voluntary disclosures, and foreign enforcement authorities.” 

“According to Last, referrals from foreign authorities are on the upswing. While Last said that ‘we don’t do industry sweeps,’ he emphasized that Department prosecutors don’t just sit around and wait for cases to fall on their desks – they actively look for leads, including through data mining.”

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