32 Search Results

November 19, 2020 |
Best Lawyers in Brazil 2021 Recognizes Three Gibson Dunn Attorneys

Best Lawyers in Brazil 2021 has recognized three Gibson Dunn attorneys as leading lawyers in their respective practice areas: Fernando Almeida – Banking and Finance Law and Corporate and M&A Law; Lisa Alfaro – Corporate and M&A Law; and Jose Fernandez – Energy Law. The guide was published November 19, 2020. Gibson, Dunn & Crutcher’s São Paulo office serves clients in Brazil, Latin America and around the world.  Lawyers in our São Paulo office provide international legal advice to clients on mergers and acquisitions, private equity investments and capital markets.  Other areas of involvement include project finance, bank finance, fund formation, international arbitration and anti-corruption compliance.

October 13, 2020 |
Gibson Dunn Ranked in Legal 500 Latin America 2021

The Legal 500 Latin America 2021 has ranked Gibson Dunn in five categories for international law firms in Latin America. The firm was recognized with a top tier ranking in Compliance and Investigations, and was also recognized in the Banking and Finance, Capital Markets, Corporate and M&A, and International Arbitration categories.  The publication also ranked Los Angeles partner Michael Farhang and Washington, D.C. partner F. Joseph Warin as Leading Lawyers in the Compliance and Investigations category. The guide was published on October 7, 2020. Gibson Dunn’s Latin America Practice Group has provided services to clients in Latin America, and for Latin American clients around the world, for more than 30 years. The group draws on the legal, linguistic and cultural experience of its members to advise a broad base of transnational clients. The practice group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations.

September 3, 2020 |
Gibson Dunn Recognized in Chambers Latin America 2021

Gibson Dunn was recognized with three rankings in the 2021 edition of Chambers Latin America.  The firm was recognized with a top tier ranking in Latin America-wide: Corporate Crime & Investigations.  Los Angeles partner Michael Farhang and Washington, D.C. partner F. Joseph Warin were also recognized in the Latin America-wide: Corporate Crime & Investigations category.  The guide was published on September 3, 2020. Gibson Dunn’s Latin America Practice Group has provided services to clients in Latin America, and for Latin American clients around the world, for more than 30 years.  The group draws on the legal, linguistic and cultural experience of its members to advise a broad base of transnational clients.  The practice group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations.

March 26, 2020 |
Gibson Dunn Recognized in Latin Lawyer 250

Gibson Dunn was recognized in the 2020 edition of the Latin Lawyer 250 for its Latin America-related work in six practice areas: Anti-Corruption Investigations and Compliance, Arbitration, Banking & Finance, Capital Markets, Corporate and M&A, and Litigation. The guide features “the leading business law firms of Latin America” and was published in March 2020. Gibson Dunn’s Latin America Practice Group has provided services to clients in Latin America, and for Latin American clients around the world, for more than 30 years. The group draws on the legal, linguistic and cultural experience of its members to advise a broad base of transnational clients. The practice group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations.

September 13, 2019 |
Gibson Dunn Ranked in Legal 500 Latin America

The Legal 500 Latin America 2019 has ranked Gibson Dunn in three categories for International law firms in Latin America – Banking and Finance, Capital Markets and Corporate and M&A.  The publication also recommended Lisa Alfaro in the Corporate and M&A category and Tomer Pinkusiewicz in the Banking and Finance and Capital Markets categories. The guide was published on September 13, 2019. Gibson Dunn’s Latin America Practice Group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations. The Latin America group works with private clients and governmental institutions.  We have participated in the renegotiation of sovereign debt as well as advised companies and governments in major privatizations.

August 19, 2019 |
Gibson Dunn Recognized in Chambers Latin America 2020

Gibson Dunn was recognized with three rankings in the 2020 edition of Chambers Latin America.  The firm was recognized with a top tier ranking in Latin America-wide: Corporate Investigations.  Michael Farhang and Joseph Warin were also recognized in the Latin America-wide: Corporate Investigations category.  The guide was published on August 15, 2019. Gibson Dunn’s Latin America Practice Group has provided services to clients in Latin America, and for Latin American clients around the world, for more than 30 years.  The group draws on the legal, linguistic and cultural experience of its members to advise a broad base of transnational clients.  The practice group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations.

May 22, 2019 |
Lisa Alfaro Named Among Top Latin America Women Lawyers By Latinvex

Latinvex named São Paulo partner Lisa Alfaro to its 2019 Latin America’s Top 100 Female Lawyers list in the Energy and FCPA & Fraud categories. The list recognizes “the top 100 female lawyers specializing in Latin America among international law firms.” Lisa was recognized for her recent work including representing Petrobras and Prumo Logistica S.A. The list was published on May 22, 2019. Lisa Alfaro is Co-Chair of the Latin America Practice Group. She has advised U.S. and multi-national companies on their most significant and critical matters, including corporate transactions, corporate compliance and investigations.  Alfaro represents developers, investment banks, private funds, Fortune 100 companies, state owned entities and investors in the U.S. and Brazil.

March 12, 2019 |
Gibson Dunn Recognized in Latin Lawyer 250

Gibson Dunn was recognized in the 2019 edition of The Latin Lawyer 250 for its Latin America-related work in six practice areas: Anti-Corruption Investigations and Compliance, Arbitration, Banking & Finance, Capital Markets, Corporate and M&A, and Litigation. The guide features “the leading business law firms of Latin America” and was released in March 2019. Gibson Dunn’s Latin America Practice Group has provided services to clients in Latin America, and for Latin American clients around the world, for more than 30 years.  The group draws on the legal, linguistic and cultural experience of its members to advise a broad base of transnational clients.  The practice group has advised on mergers and acquisitions, venture capital and other private equity transactions, capital market transactions (including ADRs and Rule 144A transactions), debt reorganizations, including tender and exchange offers, project finance, multilateral and syndicated credits, tax matters, government expropriations, debt conversion, insurance, and litigation and international arbitrations.

February 7, 2019 |
F. Joseph Warin and Kevin Kelley Named Among Top Latin America Lawyers

Latinvex has named Washington, D.C. partner F. Joseph Warin and New York partner Kevin Kelley on its 2019 Latin America’s Top 100 Lawyers list featuring “leading attorneys from international law firms that are involved in the legal business in Latin America.” The list was published on February 7, 2019. Named a top lawyer in the FCPA & Fraud category, Warin focuses on complex civil litigation, white collar crime, and regulatory and securities enforcement – including Foreign Corrupt Practices Act investigations, False Claims Act cases, special committee representations, compliance counseling and class action civil litigation. He has handled cases and investigations in more than 40 states and dozens of countries. Warin’s clients include corporations, officers, directors and professionals in regulatory, investigative and trials involving federal regulatory inquiries, criminal investigations and cross-border inquiries by dozens of international enforcers. Named a top lawyer in the Capital Markets category, Kelley advises on capital markets transactions, particularly those involving non-U.S. issuers engaging in U.S. public or private securities offerings and exchange and tender offers. His clients include the major U.S. investment banks as well as corporations, financial institutions and sovereign issuers throughout Latin America, the Caribbean and Europe. Kelley has significant experience representing issuers and underwriters in public and 144A offerings of debt and equity securities, compliance with U.S. securities laws, and NYSE and NASDAQ listings by foreign issuers.

September 20, 2018 |
Rahim Moloo Named Among Top Rising Legal Stars in Latin America

Latinvex named New York partner Rahim Moloo to its 2018 Latin America’s Top 50 Rising Legal Stars list. The list recognizes “rising stars at international law firms doing business in the region” and was based on “scope and prominence of work and future potential.” The list was published on September 20, 2018.

August 9, 2018 |
Gibson Dunn Recognized in Chambers Latin America

Gibson Dunn was recognized with four rankings in the 2019 edition of Chambers Latin America. The firm was recognized with a top tier ranking in Latin America-wide: Corporate Investigations. Three partners were recognized in their respective practice areas: Michael Farhang – Latin America-wide: Corporate Investigations; Kevin Kelley – Latin America-wide: Capital Markets; and Joseph Warin – Latin America-wide: Corporate Investigations. The guide was published on August 9, 2018.

July 9, 2018 |
2018 Mid-Year FCPA Update

Click for PDF The steady clip of Foreign Corrupt Practices Act ("FCPA") prosecutions set in 2017 has continued apace into the first half of 2018, largely quieting any questions of enforcement of this important statute under the current Administration.  Although this update captures developments through June 30, the enforcers did not have a reprieve for the July 4th holiday, because they announced two corporate enforcement actions in the first week of the month.  From our perspective, all signs point to business as usual at the U.S. Department of Justice ("DOJ") and Securities and Exchange Commission ("SEC"), the two regulators charged with enforcing the FCPA. This client update provides an overview of the FCPA as well as domestic and international anti-corruption enforcement, litigation, and policy developments from the first half of 2018.


The FCPA's anti-bribery provisions make it illegal to corruptly offer or provide money or anything else of value to officials of foreign governments, foreign political parties, or public international organizations with the intent to obtain or retain business.  These provisions apply to "issuers," "domestic concerns," and those acting on behalf of issuers and domestic concerns, as well as to "any person" who acts while in the territory of the United States.  The term "issuer" covers any business entity that is registered under 15 U.S.C. § 78l or that is required to file reports under 15 U.S.C. § 78o(d).  In this context, foreign issuers whose American Depository Receipts ("ADRs") are listed on a U.S. exchange are "issuers" for purposes of the FCPA.  The term "domestic concern" is even broader and includes any U.S. citizen, national, or resident, as well as any business entity that is organized under the laws of a U.S. state or that has its principal place of business in the United States. In addition to the anti-bribery provisions, the FCPA also has "accounting provisions" that apply to issuers and those acting on their behalf.  First, there is the books-and-records provision, which requires issuers to make and keep accurate books, records, and accounts that, in reasonable detail, accurately and fairly reflect the issuer's transactions and disposition of assets.  Second, the FCPA's internal controls provision requires that issuers devise and maintain reasonable internal accounting controls aimed at preventing and detecting FCPA violations.  Prosecutors and regulators frequently invoke these latter two sections when they cannot establish the elements for an anti-bribery prosecution or as a mechanism for compromise in settlement negotiations.  Because there is no requirement that a false record or deficient control be linked to an improper payment, even a payment that does not constitute a violation of the anti-bribery provisions can lead to prosecution under the accounting provisions if inaccurately recorded or attributable to an internal controls deficiency.


The following table and graph detail the number of FCPA enforcement actions initiated by DOJ and the SEC during each of the past 10 years.










2018 (as of 7/06)









































Number of FCPA Enforcement Actions Per Year


The first half of 2018 saw a diverse mix of FCPA enforcement activity, from relatively modest to very large financial penalties, the first-ever coordinated U.S.-French bribery resolution, and numerous criminal prosecutions of individual defendants, particularly for non-FCPA charges arising out of foreign corruption investigations.

Corporate FCPA Enforcement Actions

There have been 11 corporate FCPA enforcement actions in 2018 to date.

Elbit Imaging Ltd.

The year's first corporate FCPA enforcement action involved an aggressive interpretation of the FCPA's accounting provisions resulting in a relatively modest financial penalty.  On March 9, 2018, Israeli-based holding company and issuer Elbit Imaging settled an SEC-only cease-and-desist proceeding for alleged FCPA books-and-records and internal controls violations.  According to the SEC's order, between 2007 and 2012 Elbit and an indirect subsidiary paid $27 million to two consultants and one sales agent in connection with real estate projects in Romania and the United States.  Without making direct allegations, the SEC intimated corruption in the Romanian projects by asserting that the two consultants were engaged without any due diligence to facilitate government approvals and were paid significant sums of money without any evidence of work performed.  In connection with the U.S. project, the SEC again asserted that the sales agent was retained without due diligence and paid significant sums of money without evidence of work performed, but in this case concluded that the majority of those funds were embezzled by Elbit's then-CEO. Without admitting or denying the allegations, Elbit consented to the cease-and-desist proceeding and agreed to pay a $500,000 civil penalty.  The SEC acknowledged Elbit's self-reporting to U.S. and Romanian authorities, as well as the fact that Elbit is in the process of winding down its operations as factors in setting the modest penalty and lack of any post-resolution monitoring or reporting obligations.  This resolution marks the lowest monetary assessment in a corporate FCPA enforcement action since June 2016 (Nortek, Inc., covered in our 2016 Mid-Year FCPA Update, in which the company paid just more than $320,000 in disgorgement and prejudgment interest).

Transport Logistics International, Inc.

The first criminal corporate FCPA resolution of 2018 stems from an investigation that we have been following for several years.  On March 12, 2018, Maryland transportation company Transport Logistics International ("TLI") reached a deferred prosecution agreement with DOJ arising from an alleged scheme to make more than $1.7 million in corrupt payments to an official of JSC Techsnabexport ("TENEX")—a Russian state-owned supplier of uranium and uranium enrichment services—in return for directing sole-source uranium transportation contracts to the company.  We first reported on this in our 2015 Year-End FCPA Update in connection with guilty pleas by former TLI Co-President Daren Condrey, wife Carol Condrey, TENEX official Vadim Mikerin, and businessman Boris Rubizhevsky.  Rounding out the charges, on January 10, 2018 the other former TLI Co-President Mark Lambert was indicted on 11 counts of FCPA, wire fraud, and money laundering charges. To resolve the charges of conspiracy to violate the FCPA's anti-bribery provisions, TLI entered into a deferred prosecution agreement and agreed to pay a $2 million criminal penalty, as well as self-report to DOJ on the state of its compliance program over the three-year term of the agreement.  Notably, the $2 million penalty represents a significant departure from the DOJ-calculated fine of $21.4 million, based upon an inability-to-pay analysis by an independent accounting firm hired by DOJ that confirmed TLI's representation that a penalty greater than $2 million would jeopardize the continued viability of the company.  After a significant colloquy with government and company counsel concerning whether DOJ was being unduly lenient in deferring prosecution, the Honorable Theodore Chuang of the U.S. District Court for the District of Maryland approved of the resolution.  Trial in the case against remaining defendant Lambert is currently set for April 2019.

Kinross Gold Corporation

On March 26, 2018, the SEC announced a settled cease-and-desist order against Canadian gold mining company Kinross Gold for alleged violations of the FCPA's accounting provisions.  According to the charging document, in 2010, Kinross acquired two subsidiaries that operated mines in Mauritania and Ghana but, despite due diligence identifying a lack of anti-corruption compliance controls, was slow to implement such controls.  Kinross further allegedly failed to respond to multiple internal audits flagging the inadequate controls, and payments continued to be made to vendors and consultants, often in connection with government interactions, without appropriate efforts to ensure that the funds were not used for improper payments.  Notably, however, the SEC did not allege any specific corrupt payments made by or on behalf of Kinross. Without admitting or denying the allegations, Kinross agreed to pay a $950,000 penalty to resolve the charges.  The SEC's order does not allege that the company realized profits tied to the misconduct and therefore did not order disgorgement.  The SEC acknowledged Kinross's remedial efforts, which the company will continue to self-report to the SEC on for one year.  Kinross has stated that DOJ has closed its investigation without taking any enforcement action.

The Dun & Bradstreet Corporation

On April 23, 2018, the business intelligence company Dun & Bradstreet agreed to settle FCPA accounting charges arising from allegations of improper payments to acquire confidential data in China.  According to the SEC, between 2006 and 2012 two Chinese subsidiaries made payments to Chinese officials and third parties to obtain non-public information that was not subject to lawful disclosure under Chinese law.  One of the subsidiaries and several of its officers were prosecuted and convicted in China for the unlawful procurement of this data. Without admitting or denying the allegations, Dun & Bradstreet consented to the entry of a cease-and-desist order and agreed to disgorge $6.08 million of profits, plus $1.14 million in prejudgment interest, and pay a $2 million civil penalty.  The SEC's order did not impose ongoing reporting requirements on Dun & Bradstreet and credited the company's self-disclosure, which occurred after local police conducted a raid at one of the subsidiaries.  Among other remedial actions, Dun & Bradstreet shuttered one of the subsidiaries.  Citing the FCPA Corporate Enforcement Policy, DOJ issued a public letter declining to prosecute Dun & Bradstreet in light of the SEC resolution and other factors.

Panasonic Corporation

On April 30, 2018, the SEC and DOJ announced the first joint FCPA resolution of 2018, with Japanese electronics company Panasonic and its California-based subsidiary Panasonic Avionics Corporation ("PAC"), respectively.  PAC designs and distributes in-flight entertainment systems and communications services to airlines worldwide.  According to the charging documents, PAC agreed to provide a post-retirement consultancy position to an official at a state-owned airline as PAC was negotiating agreements with the state-owned airline worth more than $700 million.  PAC allegedly paid the official $875,000 for little to no work.  Separately, PAC also allegedly failed to follow its own third-party due diligence protocols in Asia, including by concealing the retention of agents who did not pass screening by employing them as sub-agents to a single qualified agent. To resolve a one-count criminal information charging PAC with causing the falsification of Panasonic's books and records, PAC entered into a deferred prosecution agreement with DOJ and agreed to pay a $137.4 million criminal fine, a 20% discount from the bottom of the applicable Guidelines range based on the company's cooperation but failure to voluntarily disclose.  To resolve civil FCPA anti-bribery and accounting violations, as well as allegations that it fraudulently overstated its income in a separate revenue recognition scheme, Panasonic consented to an SEC cease-and-desist order and agreed to pay $143.2 million in disgorgement and prejudgment interest.  Together, the parent and subsidiary agreed to pay combined criminal and regulatory penalties of more than $280 million. In addition to the monetary penalties, PAC agreed to engage an independent compliance monitor for a period of two years to be followed by one year of self-reporting.  In addition to traditional monitor requirements, such as demonstrated FCPA expertise, the deferred prosecution agreement includes an additional proviso to the list of qualifications for monitor selection—diversity—stating that "[m]onitor selections shall be made in keeping with the Department's commitment to diversity and inclusion."

Société Générale S.A. /Legg Mason, Inc.

Closing out the first half of 2018 corporate enforcement in a big way, on June 4, 2018 DOJ announced two separate but related FCPA enforcement actions with French financial services company Société Générale ("SocGen") and Maryland-based investment management firm Legg Mason, Inc.  Both resolutions stem from SocGen's payment of more than $90 million to a Libyan intermediary, while allegedly knowing that the intermediary was using a portion of those payments to bribe Libyan government officials in connection with $3.66 billion in investments placed by Libyan state-owned banks with SocGen.  A number of those investments were managed by a subsidiary of Legg Mason. To settle the criminal FCPA bribery and conspiracy charges, SocGen entered into a deferred prosecution agreement and had a subsidiary plead guilty.  SocGen also simultaneously resolved unrelated criminal fraud charges of rigging LIBOR rates.  Further, in the first U.S.-French coordinated resolution in a foreign bribery case, SocGen also reached a parallel resolution with the Parquet National Financier ("PNF") in Paris.  After netting out offsets between the bribery resolutions, SocGen agreed to pay $292.78 million to DOJ and $292.78 million to French authorities, in addition to $275 million to resolve DOJ's LIBOR-related allegations.  Adding $475 million paid to the U.S. Commodity Futures Trading Commission in the LIBOR case, the total price tag well exceeds $1.3 billion. Legg Mason had a somewhat lesser role in the alleged corruption scheme, reflected in the fact that it was permitted to enter into a non-prosecution agreement with DOJ with a $64.2 million price tag.  Nearly half of the DOJ resolution amount is subject to a potential credit "against disgorgement paid to other law enforcement authorities within the first year of the [non-prosecution] agreement," a seeming anticipatory nod to a forthcoming FCPA resolution with the SEC. Both companies will self-report to DOJ over the course of the three-year term of their respective agreements.  Neither was required to retain a compliance monitor, although the principal reasoning for lack of monitor in the SocGen case appears to be that the bank will be subject to ongoing monitoring by France's L'Agence Française Anticorruption.

Beam Suntory Inc.

Trailing into the second half of 2018, on July 2, 2018 the SEC announced an FCPA resolution with Chicago-based spirits producer Beam Suntory relating to allegations of improper payments to government officials in India.  According to the SEC, from 2006 through 2012 senior executives at Beam India directed efforts by third parties to make improper payments to increase sales, process license and label registrations, obtain better positioning on store shelves, and facilitate distribution.  The allegations include an interesting cameo by the SEC's 2011 FCPA resolution with Beam competitor Diageo plc (covered in our 2011 Year-End FCPA Update).  The SEC alleged that after the Diageo enforcement action was announced, Beam sent an in-house lawyer to India to investigate whether similar conduct was occurring at Beam India and to implement additional FCPA training.  This review led to a series of investigations culminating in a voluntary disclosure to the SEC. Without admitting or denying the allegations, Beam consented to the entry of a cease-and-desist order to resolve FCPA accounting provision charges and agreed to disgorge $5.26 million of profits, plus $917,498 in prejudgment interest, and pay a $2 million civil penalty.  The SEC's order did not impose ongoing reporting requirements on Beam and acknowledged the company's voluntary self-disclosure, cooperation with the SEC's investigation, and the remedial actions taken by the company, including ceasing operations at Beam India until Beam was satisfied it could operate in a compliant manner.  Beam has announced that it is continuing to cooperate in a DOJ investigation.

Credit Suisse Group AG

Further trailing into the second half of 2018, on July 5 DOJ and the SEC announced the second joint FCPA resolution of 2018 with Swiss-based financial services provider and issuer Credit Suisse.  According to the charging documents, between 2007 and 2013 Credit Suisse's Hong Kong subsidiary hired more than 100 employees at the request of Chinese government officials.  These so-called "relationship hires" were allegedly made to encourage the referring officials to direct business to Credit Suisse and despite the fact that, in many cases, these applicants did not possess the technical skills and qualifications of those not referred by foreign officials. To resolve the criminal investigation, Credit Suisse's Hong Kong subsidiary entered into a non-prosecution agreement and agreed to pay a criminal penalty of just over $47 million.  Notably, Credit Suisse received only a 15% discount from the bottom of the Guidelines range (rather than the maximum 25% available under the FCPA Corporate Enforcement Policy for non-voluntary disclosures) because its cooperation was, allegedly, "reactive and not proactive" and "because it failed to sufficiently discipline employees who were involved in the misconduct."  Credit Suisse will self-report on the status of its compliance program over the three-year term of the agreement. To resolve the SEC investigation, the parent company consented to a cease-and-desist proceeding alleging violations of the FCPA's anti-bribery and internal controls provisions and agreed to pay nearly $25 million in disgorgement plus more than $4.8 million in prejudgment interest.  This brings the total monetary resolution to nearly $77 million. Prior examples of so-called "princeling" FCPA resolutions include JPMorgan Chase & Co. (covered in our 2016 Year-End FCPA Update), Qualcomm, Inc. (covered in our 2016 Mid-Year FCPA Update), and Bank of New York Mellon Corp. (covered in our 2015 Year-End FCPA Update).

Individual FCPA and FCPA-Related Enforcement Actions

The number of FCPA prosecutions of individual defendants during the first half of 2018 was a relatively modest half dozen, including the indictment of former TLI Co-President Mark Lambert discussed above.  But that number masks the true extent of FCPA-related enforcement as DOJ brought twice that many prosecutions in money laundering and wire fraud actions arising out of FCPA investigations.  In large part, these non-FCPA charges are a result of DOJ pursuing the foreign official recipients of bribe payments, who cannot be charged under the FCPA but can be charged with criminal offenses (including money laundering) associated with the receipt of those bribes.

FCPA-Related Charges in Och-Ziff Case

In our 2017 Mid-Year FCPA Update, we covered civil FCPA charges filed by the SEC against former Och-Ziff Capital Management Group LLC executive Michael L. Cohen.  On January 3, 2018, a criminal indictment was unsealed charging Cohen with 10 counts of investment adviser fraud, wire fraud, obstruction of justice, false statements, and conspiracy.  According to the indictment, Cohen violated his fiduciary duties to a charitable foundation client by failing to disclose his personal interest in investments he promoted relating to an African mining operation and then engaged in obstructive acts to cover up the transaction after the SEC began investigating. Cohen has pleaded not guilty to all charges.  No trial date has been set.

Additional FCPA and FCPA-Related Charges in PDVSA Case

We have been reporting on DOJ's investigation of a corrupt pay-to-play scheme involving Venezuela's state-owned energy company, Petróleos de Venezuela S.A. ("PDVSA"), since our 2015 Year-End FCPA Update.  On February 12, 2018, DOJ unsealed and announced charges against five new defendants for their alleged participation in the scheme:  Luis Carolos De Leon Perez, Nervis Gerardo Villalobos Cardenas, Cesar David Rincon Godoy, Rafael Ernesto Reiter Munoz, and Alejandro Isturiz Chiesa.  All five defendants are charged with money laundering; De Leon and Villalobos are additionally charged with FCPA conspiracy. According to the indictment, in 2011 PDVSA found itself in significant financial distress relating to the sharp reduction in global oil prices.  Knowing that the agency would be unable to pay all of its vendors, the five defendants (the three non-FCPA defendants with PDVSA and the two FCPA defendants as brokers) concocted a scheme to solicit PDVSA vendors to obtain preferential treatment in payment only if they agreed to kickback 10% of the payments to the defendants. Four of the five defendants were arrested in Spain in October 2017, whereas Isturiz remains at large.  Cesar Rincon was extradited from Spain in early February and, on April 19, 2018, pleaded guilty to one count of money laundering conspiracy and was ordered to forfeit $7 million, pending a summer sentencing date.  De Leon, a U.S. citizen, has been extradited to the United States and has pleaded not guilty, although pre-trial filings suggest that a plea agreement may be in the works.  Villalobos and Reiter remain in Spanish custody pending extradition proceedings. These charges bring to 15 the number of defendants charged (publicly) in the wide-ranging PDVSA corruption investigation.  With Cesar Rincon, 11 of the 15 have now pleaded guilty.

Additional FCPA Charges in U.N. Bribery Case

We have been reporting on FCPA and non-FCPA charges associated with a scheme to bribe U.N. ambassadors to influence, among other things, the development of a U.N.-sponsored conference center in Macau, since our 2015 Year-End FCPA Update.  On April 4, 2018, Julia Vivi Wang, a former media executive who promoted U.N. development goals, pleaded guilty to three counts of FCPA bribery, conspiracy, and tax evasion in connection with her role in the scheme.  Wang was originally charged in March 2016, but a superseding charging document was filed in 2018.  Wang's sentencing has been set for September 5, 2018.

Additional FCPA and FCPA-Related Charges in Petroecuador Case

In our 2017 Year-End FCPA Update, we reported on the money laundering indictment of Marcelo Reyes Lopez, a former executive of Ecuadorian state-owned oil company Petroecuador.  Lopez pleaded guilty on April 11, 2018 to money laundering conspiracy in connection with his alleged receipt of bribes. On March 28, 2018, another former Petroecuador executive, Arturo Escobar Dominguez, likewise pleaded guilty to one count of conspiracy to commit money laundering.  Then, on April 19, 2018, a grand jury in the Southern District of Florida returned an indictment charging two additional defendants:  Frank Roberto Chatburn Ripalda and Jose Larrea.  Chatburn is charged with FCPA bribery, money laundering, and conspiracy in connection with his alleged payment of $3.27 million in bribes to Petroecuador officials to obtain $27.8 million in contracts for his company.  Larrea is charged with conspiracy to commit money laundering in connection with the scheme.  Chatburn has yet to be arraigned, and Larrea has pleaded not guilty with a current trial date of August 2018.

New FCPA and FCPA-Related Charges in Setar Case

In April 2018, charges against a former Florida telecommunications company executive, Lawrence W. Parker, Jr., and a former official of the Aruban state-owned telecommunications company Servicio di Telecomunicacion di Aruba N.V. ("Setar"), Egbert Yvan Ferdinand Koolman, were unsealed in the U.S. District Court for the Southern District of Florida.  According to the charging documents, Koolman accepted $1.3 million in bribes from Parker and others, for several years, in exchange for providing confidential information concerning Setar business opportunities.  Parker was charged with one count of FCPA conspiracy and Koolman with one count of money laundering conspiracy. Both Parker and Koolman have pleaded guilty and have been sentenced to 35 and 36 months in prison, in addition to $700,000 and $1.3 million in restitution, respectively.

New FCPA-Related Charge in HISS Case

In our 2015 Mid-Year FCPA Update, we covered DOJ's civil action to forfeit nine New Orleans properties—worth approximately $1.5 million—filed in the U.S. District Court for the Eastern District of Louisiana.  On April 27, 2018, a grand jury sitting in the same district returned an indictment criminally charging Carlos Alberto Zelaya Rojas, the nominal owner of those properties, with 12 counts of money laundering and other offenses associated with the impediment of the civil forfeiture proceedings.  According to the indictment, Zelaya is the brother of the former Executive Director of the Honduran Institute of Social Security ("HISS").  The brother, who according to press reports was criminally charged in Honduras, allegedly received millions of dollars in bribes from two Honduran businessmen.  Zelaya then assisted with the laundering of at least $1.3 million of those bribe payments, including through the purchase of the nine properties. On June 27, 2018, Zelaya pleaded guilty to a single count of money laundering conspiracy and has been detained pending an October sentencing date.  As part of this plea, Zelaya consented to the forfeiture of the nine properties.

Additional FCPA-Related Charges in Rolls-Royce Case

In our 2017 Mid-Year FCPA Update, we covered the multi-jurisdictional resolution of criminal bribery charges against UK engineering company Rolls-Royce.  The corporate charges were then supplemented by FCPA and FCPA-related charges against five individual defendants as reported in our 2017 Year-End FCPA Update.  On May 24, 2018, DOJ announced a superseding indictment that charged two new defendants—Vitaly Leshkov and Azat Martirossian—with money laundering charges associated with the Rolls-Royce bribery scheme. According to the indictment, Leshkov and Martirossian were employees of a technical advisor to a state-owned joint venture between the governments of China and Kazakhstan, formed to transport natural gas between the two nations.  In this capacity, they allegedly "had the ability to exert influence over decisions" by the state-owned joint venture and accordingly qualified as foreign officials even though they had no official government positions.  They then participated in a scheme to solicit bribes on behalf of employees of the state-owned joint venture from employees of Rolls-Royce. Neither Martirossian nor Leshkov have made a physical appearance in U.S. court to answer the charges.  Nevertheless, Martirossian already has moved to dismiss the indictment as described immediately below.


Martirossian Motion to Dismiss

As just described, Azat Martirossian was indicted on May 24, 2018 on money laundering charges associated with the alleged Rolls-Royce bribery scheme in China and Kazakhstan.  Although Martirossian reportedly remains in China and has yet to make a physical appearance in U.S. court, he very quickly filed a motion to dismiss the indictment on the grounds that it insufficiently alleges a U.S. nexus.  The motion also contests the "aggressive theory" that Martirossian qualifies as a "foreign official" under the FCPA based on his work as a technical advisor to a state-owned entity. DOJ's initial response briefly contests Martirossian's arguments on the merits, but focuses more on DOJ's contention that the motion should be held in abeyance until Martirossian submits himself to the jurisdiction of the Court pursuant to the fugitive disentitlement doctrine.  The motion remains pending before Chief Judge Edmund A. Sargus of the U.S. District Court for the Southern District of Ohio.

Ho Motion to Dismiss

We reported in our 2017 Year-End FCPA Update on the December 2017 indictment of Chi Ping Patrick Ho, the head of a Chinese non-governmental organization that holds "special consultative status" at the United Nations, on FCPA and money laundering charges associated with his alleged role in corruption schemes involving Chad and Uganda.  After pleading not guilty earlier this year, on April 16 Ho filed a motion to dismiss certain of the counts.  Ho argues, among other things, that the indictment inconsistently charges him with violating both 15 U.S.C. § 78dd-2, which applies to "domestic concerns," and § 78dd-3, which applies to persons who act within U.S. territory in furtherance of a bribe.  Ho additionally contends that the money laundering charges fail because they cannot be based on wires sent from one foreign jurisdiction to another foreign jurisdiction—here Hong Kong to Dubai and Uganda—with no U.S. nexus other than the fact that they passed through a New York bank account.  DOJ, as one would expect, opposed the motion, which remains pending before the Honorable Loretta A. Preska of the U.S. District Court for the Southern District of New York. 

Denial of Ng Seng's Motion for New Trial / Sentencing

We covered in our 2017 Year-End FCPA Update the conviction after trial of Macau billionaire Ng Lap Seng on FCPA, federal programs bribery, and money laundering charges associated with his role in a scheme to pay more than $1 million in bribes to two U.N. officials in connection with, among other things, a plan to build a U.N.-sponsored conference center in Macau.  Seng subsequently filed a Rule 33 motion for a new trial, arguing that DOJ introduced a new theory of liability at trial, constituting an amendment of or prejudicial variance from the indictment, as well as that the Government's key witness, cooperating defendant Francis Lorenzo, committed perjury at trial, which DOJ failed adequately to investigate and correct. On May 9, 2018, the Honorable Vernon S. Broderick of the U.S. District Court for the Southern District of New York denied the motion.  In a lengthy opinion, steeped in the facts of the four-week trial, the Court found that there was no constructive amendment of or prejudicial variance from the superseding indictment based on the evidence adduced at trial, and further that Seng failed to meet his burden of establishing perjury by Lorenzo, and that even if there had been perjury it was not material to the jury's verdict. Judge Broderick subsequently sentenced Seng to 48 months in prison and ordered approximately $1.8 million in forfeiture and restitution.  Seng has appealed to the Second Circuit, which in an early ruling denied Seng's motion for bail pending appeal but ordered his appeal to be expedited. In the same case, on February 28, 2018, Judge Broderick sentenced Seng's co-defendant and former assistant, Jeff Yin, to 7 months in prison and nearly $62,000 in restitution for his tax evasion conviction.

Motion to Intervene in Och-Ziff Sentencing Proceedings

As reported in our 2016 Year-End FCPA Update, New York-based hedge fund Och-Ziff Capital Management Group LLC, together with its investment advisor subsidiary, reached a coordinated FCPA resolution with DOJ and the SEC in September 2016, pursuant to which the entities agreed to pay just over $412 million in total.  After several adjournments of the sentencing hearing, on February 20, 2018 a self-styled victim of Och-Ziff's alleged corruption, Africo Resources Limited, filed a letter with the Court asserting that it is entitled to a share of the proceeds collected by DOJ pursuant to the Mandatory Victim Restitution Act.  Och-Ziff, represented by Gibson Dunn, has filed a submission disputing Africo Resources' claims.  The Honorable Nicholas G. Garaufis of the U.S. District Court for the Eastern District of New York has yet to rule.

SEC Proceedings Against Och-Ziff Defendants Stayed

As reported in our 2017 Year-End FCPA Update, former Och-Ziff executive Michael Cohen and analyst Vanja Baros filed motions to dismiss the civil FCPA proceedings brought against them by the SEC.  After those motions were fully briefed and argued, but pending ruling, DOJ unsealed an indictment that charged Cohen criminally as discussed above. On February 9, 2018, DOJ filed a motion to intervene and stay the SEC civil suit on the grounds that the facts of the civil cases overlap substantially with the criminal case, even though the indictment does not allege FCPA violations.  Cohen and Baros did not object to a stay of the SEC case, but requested that the Court rule on their pending motions to dismiss first.  On May 11, 2018, the Honorable Nicholas G. Garaufis granted DOJ's motion to stay discovery in the SEC's case, but denied the request to stay ruling on the motions to dismiss.  A decision on those motions remains pending.

Khoury's Motion to Unseal Indictment

We reported in our 2017 Year-End FCPA Update on the unorthodox motion filed by Samir Khoury to unseal an indictment against him that may or may not exist.  Khoury, a former consultant named in prior FCPA corporate resolutions as "LNG Consultant," contends that it is likely that there is an indictment pending against him under seal since approximately 2009, waiting for him to travel to the United States or another country with an extradition treaty.  Khoury asserts that the indictment should be unsealed and then dismissed given the prejudicial effect of the passage of time. Oral argument on the motion was heard before the Honorable Keith P. Ellison of the U.S. District Court for the Southern District of Texas on March 22, 2018.  At the hearing, Khoury's counsel presented argument that 12 potential defense witnesses have died since 2009, and that Khoury has been unable to open bank accounts in his native Lebanon and has lost business opportunities because of his perceived affiliation with the Bonny Island scheme.  In response, attorneys for DOJ refused to acknowledge whether Khoury had or had not been indicted, but indicated that if an indictment did exist it could hold the indictment under seal indefinitely. On June 11, 2018, Judge Ellison issued a Memorandum Opinion and Order.  He first pushed aside DOJ's "issue preclusion" arguments that decisions from several years prior resolve this matter, holding that the three years that has passed since that litigation represent a changed circumstance warranting another look.  Similarly, the Court rejected DOJ's "fugitive disentitlement" argument, holding that Khoury is not a fugitive because he did not abscond from the United States but rather has at all relevant times been living in his native Lebanon.  Judge Ellison gave DOJ 20 days to submit to the Court, in camera, any evidence it "wishes to adduce in opposition to Mr. Khoury's Motion to Unseal." DOJ filed a sealed pleading on July 2, 2018.  The next day, Khoury filed a motion to unseal any portion of that pleading that was beyond the contours of what the Court permitted.  This motion, as well as the underlying motion to unseal and dismiss, remain pending.

Guilty Plea in Vietnamese Skyscraper Case

In our 2017 Mid-Year FCPA Update, we reported on the indictment of New Jersey real estate broker Joo Hyun Bahn in connection with a feigned plot to bribe an official of the sovereign wealth fund of a Middle Eastern country (subsequently identified as Qatar) to induce the official to cause the fund to purchase a skyscraper in Hanoi.  The alleged agent of the sovereign wealth fund subsequently admitted that the bribery plot was a sham and that he pocketed the bribe payment. On January 5, 2018, Bahn pleaded guilty to one count of FCPA conspiracy and one count of violating the FCPA in the U.S. District Court for the Southern District of New York.  His sentencing is scheduled for September 6, 2018 before the Honorable Edgardo Ramos.

Guilty Plea in Siemens Case

As reported in our 2017 Year-End FCPA Update, former Siemens executive Eberhard Reichert was extradited to the United States, following his arrest in Croatia, to face a December 2011 indictment charging him and seven others in relation to their alleged roles in a scheme to bribe Argentine officials in connection with a $1 billion contract to create national identity cards. On March 15, 2018, Reichert pleaded guilty in the U.S. District Court for the Southern District of New York to one count of conspiring to violate the anti-bribery, internal controls, and books-and-records provisions of the FCPA and to commit wire fraud.  Reichert awaits a sentencing date before the Honorable Denise L. Cote.


In addition to the enforcement activity covered above, the first six months of 2018 saw DOJ issue important guidance on how it will administer criminal enforcement, as well as a Supreme Court decision with significant ramifications for FCPA whistleblowers.

DOJ Announces "Piling On" Policy

On May 9, 2018, Deputy Attorney General Rod J. Rosenstein introduced a new DOJ "Policy on Coordination of Corporate Resolution Penalties."  Announcing the policy at a New York City Bar event, Rosenstein said that it attempts to discourage "piling on" by different enforcement authorities punishing the same company for the same conduct. Incorporated in Sections 1-12.100 and 9-28.1200 of the U.S. Attorneys' Manual, the new policy directs federal prosecutors to "consider the totality of fines, penalties, and/or forfeiture imposed by all Department components as well as other law enforcement agencies and regulators in an effort to achieve an equitable result."  The policy has four key components:
  • First, prosecutors may not use the specter of criminal prosecution as leverage in negotiating a civil settlement;
  • Second, if multiple DOJ components are investigating the same company for the same conduct, they should coordinate to avoid duplicative penalties;
  • Third, DOJ should coordinate with and consider fines, penalties, and/or forfeiture paid to other federal, state, local, or foreign enforcement authorities investigating the same company for the same conduct; and
  • Fourth, the policy sets forth factors DOJ should consider in determining whether multiple penalties are appropriate, including the egregiousness of wrongdoing, statutory requirements, the risk of delay in achieving resolution, and the adequacy and timeliness of a company's disclosures to and cooperation with DOJ.
In our view, the policy largely reflects pre-existing DOJ practice in the FCPA arena, where DOJ routinely coordinates resolutions with the SEC and, increasingly, participates in cross-border resolutions by, among other things, crediting a company's payments to foreign enforcement authorities in calculating the U.S. criminal fine.  We covered this latter phenomenon in our 2017 Year-End FCPA Update.

Supreme Court Decision Resolves Dispute Over Who is a "Whistleblower"

On February 21, 2018, the U.S. Supreme Court unanimously held in Digital Realty Trust, Inc. v. Somers that the anti-retaliation provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act covers only those who report an alleged violation of the federal securities laws to the SEC.  The Court's decision reversed a Ninth Circuit ruling that Dodd-Frank's anti-retaliation provision also covers employees who report such issues internally without reporting them to the SEC.  Although the statutory definition of a "whistleblower" as "any individual who provides . . . information relating to a violation of the securities laws to the [SEC], in a manner established . . . by the [SEC]," appeared to be clear to all nine justices, this issue had sharply divided the lower courts in recent years. The holding in Digital Realty has been interpreted by some as a harbinger of future potential whistleblowers bypassing internal reporting channels and going directly to the SEC to ensure they are protected.  Although we agree that the Court's decision could affect the decision-making calculus of a would-be whistleblower, studies routinely show that the vast majority of employees report their concerns internally first, and that they report externally only after they feel their concerns have not been adequately addressed.  We are not certain that this phenomenon will change, at least dramatically, and we thus advise our clients and friends that it is more important now than ever for companies to scrutinize their internal policies and procedures to ensure that they encourage internal reporting, protect those who do, and robustly investigate the concerns expressed.  For more on the Supreme Court's decision, please see our Client Alert, "Supreme Court Says Whistleblowers Must Report to the SEC Before Suing for Retaliation Under Dodd-Frank."


We continue to follow DOJ's Kleptocracy Asset Recovery Initiative, spearheaded by DOJ's Money Laundering and Asset Recovery Section.  The initiative uses civil forfeiture actions to freeze, recover, and, in some cases, repatriate the proceeds of foreign corruption.  The first half of 2018 saw continued coordination between attorneys from MLARs and DOJ's FCPA Unit, as they have been frequently appearing in one another's enforcement actions, working hand-in-glove across section lines.  As stated by then-Acting Deputy Assistant Attorney General (now Gibson Dunn partner) M. Kendall Day in his February 6, 2018 testimony before the Senate Committee on the Judiciary, "One of the most effective ways to deter criminals . . . is to follow the criminals' money, expose their activity and prevent their networks from benefitting from the enormous power of [the U.S.] economy and financial system." In our 2016 and 2017 Year-End FCPA Updates, we reported on DOJ's massive civil forfeiture action seeking to recover more than $1 billion in assets associated with Malaysian sovereign wealth fund 1Malaysia Development Berhad ("1MDB").  In February 2018, a 300-foot superyacht allegedly bought with money stolen from 1MDB was impounded on behalf of U.S. authorities off the coast of Bali.  DOJ seeks to bring the yacht to the United States where it can be taken into U.S. government custody and sold.  In March, Hollywood production company Red Granite Pictures (the company that produced The Wolf of Wall Street) agreed to pay $60 million to resolve a civil lawsuit stemming from the DOJ's investigation.  Red Granite was co-founded by the stepson of the Malaysian prime minister, and DOJ alleged that three of Red Granite's productions were funded with money stolen from 1MDB.


We continue to observe that although the FCPA does not provide for a private right of action, various causes of action are employed by civil litigants in connection with losses allegedly associated with FCPA-related conduct.  A selection of matters with developments in the first half of 2018 follows.

Shareholder Lawsuits

  • Centrais Electricas Brasileiras S.A. ("Eletrobras"):  On May 2, 2018, Eletrobras entered into a $14.75 million settlement agreement with shareholders to resolve claims that the government-controlled utility made misrepresentations in its public filings regarding the company's financials and internal controls in connection with a bid-rigging scheme for service and engineering contracts.  In a press release, Eletrobras stated that it made no admission of wrongdoing or misconduct, but entered into the agreement for the best interests of its shareholders.  A hearing on the proposed settlement is scheduled before the Honorable John G. Koeltl of the U.S. District Court for the Southern District of New York on July 17, 2018.
  • Cobalt International Energy, Inc.:  On April 5, 2018, the U.S. Bankruptcy Court for the Southern District of Texas approved a Chapter 11 plan by Cobalt on the heels of a consolidated class action against the exploration and production company for material misrepresentations regarding an alleged bribery scheme involving Angolan officials and the true potential of the company's Angolan wells.  In June 2017, the Honorable Nancy F. Atlas certified a class of investors who purchased the company's securities between March 2011 and November 2014.  In February 2018, the plaintiffs voluntarily dismissed the class action without prejudice because of the bankruptcy proceedings.
  • Embraer S.A.:  On March 30, 2018, the U.S. District Court for the Southern District of New York dismissed a class action lawsuit against Brazilian-based aircraft manufacturer Embraer, which had contended that Embraer made false statements in its securities filings pertinent to its 2016 FCPA resolution.  In dismissing the suit, the Honorable Richard M. Berman explained that a company's filings need not constitute a wholesale "confession" and that companies "do not have a duty to disclose uncharged, unadjudicated wrongdoing."  The Court found that Embraer properly disclosed that it might have to pay fines or incur sanctions as a result of the investigation, that the company's financial statements were accurate, and that because Embraer's code of ethics was "inherently aspirational," an undisclosed breach of the code was not actionable under the securities laws.
  • Petróleo Brasileiro S.A. – Petrobras:  On June 4, 2018, the U.S. District Court for the Southern District of New York held a final settlement hearing for a securities class action brought against Brazil's state oil company Petrobras.  As previously reported in our 2017 Mid-Year FCPA Update, the class action plaintiffs—purchasers of Petrobras securities in the United States—alleged that Petrobras made materially false and misleading statements about its earnings and assets as part of a far-reaching money laundering and bribery scheme in Brazil.  The settlement, which does not involve any admission of wrongdoing or misconduct by Petrobras and, in fact, includes an express denial of liability, resolves these claims for a total of $2.95 billion paid by Petrobras plus an additional $50 million paid by its external auditor, PricewaterhouseCoopers Auditores Independentes ("PwC Brazil").  In a series of opinions and orders from June 25 to July 2, 2018, the Honorable Jed S. Rakoff approved of the settlement, but reduced counsel fees for the plaintiffs by nearly $100 million, to just over $200 million total.

Civil Fraud / RICO Actions


As reported in our 2017 Mid-Year FCPA Update, the Government of Bermuda filed a Racketeer Influenced and Corrupt Organizations Act ("RICO") lawsuit in U.S. District Court for the District of Massachusetts against Lahey Clinic, Inc., alleging that, for nearly two decades, the defendants conspired with Dr. Ewart Brown—the former Premier of Bermuda, a member of Bermuda's Parliament, and the owner of two private health clinics in Bermuda—to receive preferential treatment.  On March 8, 2018, the Honorable Indira Talwani granted Lahey's motion to dismiss, finding the Government of Bermuda had failed to demonstrate that it had suffered an injury to its U.S.-held business or property as a result of the alleged schemes.

EIG Global Energy Partners Litigation

In our 2017 Mid-Year FCPA Update we covered the civil fraud lawsuit against Petrobras filed by various investment funds, including EIG Global Energy Partners, alleging the funds lost their investment in an offshore drilling project known as "Sete" as a result of the Operation Car Wash scandal.  On March 30, 2017, the U.S. District Court for the District of Columbia largely denied Petrobras's motion to dismiss, finding in relevant part that Petrobras was not immune from civil lawsuit under the Foreign Sovereign Immunities Act ("FSIA") because the suit concerned Petrobras's commercial activities having a "direct effect" in the United States.  Petrobras took an interlocutory appeal of the FSIA ruling. On July 3, 2018, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the judgment of the district court in a 2-1 decision authored by the Honorable Karen L. Henderson.  "Although a foreign state is presumptively immune from the jurisdiction of United States courts," the Court held that the "direct-effect" exception to the FSIA applied on the facts as alleged by EIG in its complaint, while at the same time acknowledging that other "third-party lenders might have also injured EIG" and that the "locus" of the tort was foreign.  The Honorable David B. Sentelle filed a dissenting opinion in which he concluded that the requisite "direct effect" on U.S. commerce had not been established sufficiently to divest Petrobras of its presumptive right to immunity from suit in the U.S. courts. This is not the only RICO litigation initiated by EIG arising out of its failed Brazilian investment.  As summarized in our 2017 Year-End FCPA Update, in December 2017 Keppel Offshore & Marine Ltd. paid more than $422 million in penalties for its alleged bribery scheme with Brazilian government officials, including officials at Petrobras.  On February 6, 2018, EIG funds that had invested with Keppel filed suit in the U.S. District Court for the Southern District of New York seeking more than $660 million in damages for alleged RICO violations.  Plaintiffs allege that Keppel did not disclose its scheme to bribe Brazilian officials to secure contracts for the Sete project, and, after being discovered, the bribery scheme effectively wiped out EIG's $221 million investment.  EIG has since amended its complaint to add additional predicate acts, and a briefing schedule for the motion to dismiss has been issued by the Honorable Paul G. Gardephe.

Harvest Natural Resources

On February 16, 2018, a recently-defunct Texas-based energy company, Harvest Natural Resources, Inc., filed suit in the U.S. District Court for the Southern District of Texas against various individuals and entities affiliated with the Venezuelan government and Venezuela's state oil company, PDVSA.  The complaint alleges that, because Harvest refused to pay four separate bribes to Venezuelan officials in the pay-to-play scheme resulting in criminal prosecutions as described above, the Venezuelan government wrongfully refused to approve the sale of Harvest's energy assets, forcing Harvest to sell the assets to a different buyer at a loss of approximately $470 million.  The complaint further alleges that by requiring bribes to approve sales, Venezuela tainted the market and made it impossible for law-abiding companies to conduct business within the country.  The complaint claims that the defendants violated both the RICO and antitrust laws. On April 30, 2018, the defendants moved to dismiss the suit for failure to state a claim.  On May 11, 2018 Chief Judge Lee H. Rosenthal granted Harvest's motion for jurisdictional discovery to test defendants' jurisdictional ties and contacts.


On March 3, 2017, Setar, N.V., filed a civil suit in the U.S. District Court for the Southern District of Florida against several individuals and entities, including Lawrence W. Parker, Jr. and former Setar official Egbert Yvan Ferdinand Koolman, who as discussed above pleaded guilty to one count of FCPA conspiracy and one count of money laundering conspiracy, respectively.  In relevant part, an amended complaint filed in February 2018 alleges that Koolman orchestrated a years-long scheme to steal more than $15 million from Setar through kickbacks and other improper means.  According to Setar's amended complaint, when the Panama Papers (covered in our 2016 Mid-Year FCPA Update) became public and linked Koolman to a British Virgin Islands company, this led to an internal investigation that resulted in Koolman's termination and the identification of the scheme.  Various motions to dismiss have been filed, and the proceedings are ongoing.

FCPA-Related FOIA Litigation

100Reporters LLC

We have been covering for several years the Freedom of Information Act ("FOIA") lawsuit filed by media organization 100Reporters against DOJ in the U.S. District Court for the District of Columbia.  100Reporters sought records relating to DOJ's 2008 FCPA resolution with Siemens AG and the monitorship reports prepared by Dr. Theo Waigel and his U.S. counsel, F. Joseph Warin of Gibson Dunn. As discussed in our 2017 Mid-Year FCPA Update, on March 31, 2017, the Honorable Rudolph Contreras granted defendants' motions for summary judgment, in part, and denied in its entirety 100Reporters' cross-motion for summary judgment.  The Court accepted Gibson Dunn's position on behalf of Dr. Waigel that the "consultant corollary" to the deliberative process privilege may extend to communications between a government agency and an independent monitor and thereby shield information from disclosure under FOIA Exemption 5—the first time a court has applied the consultant corollary to a compliance monitor.  Judge Contreras denied summary judgment on these grounds because DOJ did not specifically identify the deliberative process at issue with respect to each type of documents withheld by DOJ, and left the door open for defendants to submit further affidavits to support this argument.  The Court also ordered DOJ to submit a copy of one monitorship work plan and one monitorship report for in camera review to assess whether any of the withheld materials could be segregated from non-exempt material. In response to the Court's order, DOJ submitted two new declarations from DOJ personnel involved in the monitorship, an amended chronology of events supporting the deliberative process privilege, and the materials required for in camera review.  DOJ and 100Reporters filed renewed cross-motions for summary judgment. On June 18, 2018, the Court granted in part and denied in part both sets of cross-motions for summary judgment.  Judge Contreras scrutinized the materials submitted by DOJ and held that DOJ's Exemption 4 withholdings were overbroad and although DOJ had justified withholding certain information under Exemption 5, those withholdings also were overbroad.  Ultimately, the Court determined that certain materials should be produced to 100Reporters; however, the Court determined that DOJ properly withheld the monitorship reports themselves (aside from a single, brief "best practices" subsection of each report), as well as draft work plans, presentations by the Monitor to DOJ, and correspondence among the Monitor, monitorship team, and DOJ.  Thus, the core monitorship materials, including the monitorship reports, will be withheld.  Judge Contreras ordered DOJ to reexamine its withholdings and redactions in light of the Court's guidance and disclose the newly identified non-exempt information to 100Reporters.

Monitor Candidates

As covered in our 2016 Year-End and 2017 Mid-Year FCPA Updates, GIR Just Anti-Corruption journalist Dylan Tokar filed a December 2016 FOIA lawsuit in the U.S. District Court for the District of Columbia seeking disclosure of the names of corporate compliance monitor candidates submitted by 15 companies that settled FCPA charges through agreements that contained a monitorship requirement, as well as information regarding the DOJ committee tasked with evaluating and selecting such candidates.  In 2017, DOJ provided the identity of some of the firms associated with the monitorship candidates and certain information about the DOJ committee—but withheld the names of the candidates who were not selected, citing privacy concerns reflected in FOIA Exemptions 6 and 7(C).  When DOJ refused to answer a second request for the candidate names, the parties cross-moved for summary judgment. On March 29, 2018, the Honorable Rudolph Contreras granted GIR Just Anti-Corruption's motion for summary judgment.  The Court rejected DOJ's contention that the FOIA request would not lead to enhanced public understanding of the monitor selection process, instead concluding that GIR Just Anti-Corruption "sufficiently demonstrated that the public interest will be significantly served by the release of these names."  The Court also rejected DOJ's argument that its refusal to disclose the names of monitorship candidates fell under FOIA exemption 7(C), which traditionally shields individuals from the stigma of being associated with an ongoing investigation.  The Court denied the majority of DOJ's cross-motion for summary judgment with the exception of granting DOJ's argument regarding redaction of information relating to efforts by one of the companies to enhance its compliance program on trade secrets grounds.  DOJ released the names to GIR Just Anti-Corruption in June 2018.


World Bank Integrity Vice Presidency Expands Consideration of Monitor Candidates

In March 2018, the World Bank—through Integrity Vice Presidency ("INT") head Pascale Hélène Dubois—changed course regarding those it will allow to serve as a compliance monitor for companies sanctioned by the World Bank.  Ms. Dubois explained in a written response to GIR Just Anti-Corruption that the World Bank now will consider representatives of law firms with concurrent cases before INT, so long as the individuals proposed as monitors are not currently advising on those cases.  By revising the prior approach of informally disqualifying candidates from firms that had faced INT as adversaries in sanctions proceedings, the World Bank has broadened the pool of potential candidates. Also in March, the World Bank Office of Suspension and Debarment ("OSD") released a 10-year update of metrics regarding OSD's role in World Bank enforcement.  The report illustrates the depth and breadth of efforts by the World Bank to ensure that those who participate in projects financed with World Bank funds play by World Bank rules, but also shows the difficulty of successfully challenging INT allegations of misconduct:  historically, OSD has agreed with the preliminary determinations of INT—agreeing in 96% of cases that INT had presented sufficient evidence for at least one claim set forth, and in 62% of cases that INT had presented sufficient evidence for all claims set forth.


United Kingdom

As we reported in our 2017 Year-End United Kingdom White Collar Crime Update, last year six individuals were charged by the UK Serious Fraud Office ("SFO") in connection with investigations of Unaoil.  The first half of 2018 brought additional developments in this investigation.  On May 22, 2018, the SFO announced charges against Basil Al Jarah (Unaoil's Iraq partner) and Ziad Akle (Unaoil's territory manager for Iraq) for conspiracy to pay alleged bribes to secure a $733 million contract to build two oil pipelines in Iraq.  And on June 26, 2018, the SFO announced charges against Unaoil Monaco SAM and Unaoil Ltd.  Unaoil Ltd was charged in connection with the same oil pipeline project, while Unaoil Monaco SAM was charged with conspiracy to make corrupt payments to secure the award of contracts for SBM Offshore.  Unaoil has been summoned to appear at the Westminster magistrates court in London on July 18, 2018. In other enforcement developments, following a three-day trial in the High Court in London, in March 2018 the SFO secured recovery of £4.4 million from two senior Chad diplomats to the United States who received bribes from Canadian oil and gas company Griffiths Energy International in exchange for securing oil development rights.  This is the first time that money was returned overseas in a civil recovery case.  As reported in our 2013 Year-End FCPA Update, on January 22, 2013 Griffiths entered a guilty plea in Canada and paid a CAD $10.35 million fine in connection with the alleged bribery. Look for much more on UK white collar developments in our forthcoming 2018 Mid-Year United Kingdom White Collar Crime Update, to be released on July 16, 2018.


As discussed above, in June 2018 SocGen entered into a deferred prosecution agreement with DOJ and reached a parallel settlement with the French PNF in the first coordinated enforcement action by DOJ and French authorities in an overseas anti-corruption case.  SocGen will also be subject to ongoing monitoring by the L'Agence Française Anticorruption. In two decisions this year, France's Supreme Court—the Cour de Cassation—limited the use of "international double jeopardy" as a viable defense to criminal prosecution.  French law provides that a criminal conviction in another country will preclude prosecution in France if no act related to the conduct took place in France.  But in March 2018, the French Court ruled that the Swiss company Vitol could be prosecuted for charges related to its involvement in the U.N. Oil-for-Food Program, despite having entered a guilty plea for grand larceny in New York based on the same facts.  The case spent more than five years in French courts before the Supreme Court ruled that the International Covenant on Civil and Political Rights, to which France is a signatory, prevents double jeopardy on similar charges for "unique facts" and applies "only in cases where both proceedings were initiated in the territory of the same State."  The decision thus appears to end the protection against prosecution in France for the same conduct that had given rise to proceedings in the United States. The 2018 Vitol decision resembled another recent ruling in which the French Supreme Court overturned a lower court's refusal to hear the case against British-Israeli lawyer Jeffrey Tesler, who pleaded guilty in the United States to charges of bribing Nigerian officials.  As we reported in our 2017 Mid-Year FCPA Update, the Paris Court of Appeals had previously held that the prosecution of Tesler was precluded by his 2011 plea agreement entered in U.S. court, suggesting that the U.S. plea was essentially involuntary and precluded him from fairly defending himself in France.  On January 17, 2018, the French Supreme Court reversed that ruling, noting that Tesler had not been deprived of his right to a fair trial because his appearance in French courts was not dictated by the terms of the U.S. plea agreement.  Furthermore, because some of the corrupt acts had been committed in France, the U.S. plea deal did not preclude French prosecution.


In February 2018, the German unit of French aerospace multinational Airbus SE agreed to pay $99 million to resolve a six-year bribery investigation by German prosecutors into a 2003 deal to sell fighter jets to Austria.  Although prosecutors conceded that they had identified no evidence that bribes were used to secure the 2003 contract, they accused Airbus management of supervisory negligence in allowing employees to make large payments linked to the deal for "unclear purposes."  Airbus continues to face ongoing litigation in Austria, where the Austrian government is seeking more than $1 billion in damages from Airbus in connection with the 2003 deal.


One of Russia's semiautonomous republics, Dagestan, has become embroiled in a major corruption scandal, with the arrest of numerous high-ranking local government officials, including the acting prime minister, his two deputies, and the mayor of Makhachkala (Dagestan's capital).  In Moscow, Alexander Drymanov, a high-level official within Russia's Investigative Committee ("IC") known to be very close to Alexander Bastrykin, the head of the IC, resigned from his position in early June.  His resignation has been widely linked to allegations that Drymanov and other IC officers accepted bribes from the ringleader of a prominent criminal syndicate to ensure the release of a member of this syndicate.  Additionally, in March 2018, Drymanov's former deputy told federal investigators of payments he had made in exchange for favorable treatment from Drymanov.  Drymanov has characterized his departure as retirement; however, news reports suggest his removal is part of a coordinated attack against Bastrykin by other law enforcement agencies, such as the General Prosecutor's Office and the FSB (the KGB's successor).


Ukraine's parliament passed a bill to establish an anti-corruption court on June 7, 2018, which President Petro Poroshenko signed into law four days later.  This court will become the fourth anti-corruption institution launched in Ukraine since 2014, following the establishment of the National Anti-Corruption Bureau of Ukraine ("NABU"), the Specialized Anti-Corruption Prosecutor's Office ("SAPO"), and the National Agency on Corruption Prevention ("NAZK").  There is hope that the new court will address one of the NABU's key complaints:  that, despite investigations into and arrests of corrupt officials, these efforts are being wasted due to corrupt judges who help the officials escape justice.  The newly passed law creates certain mechanisms intended to ensure that the anti-corruption court's judges remain impartial and do not become beholden to political or financial influence.  Most notably, candidates for appointment to this court are subject to vetting by and interviews with a panel of six international experts.  If three of the six raise concerns about a nominee's integrity or background, they may vote to block the candidacy, which result can be reversed only following further deliberations and a repeat vote. Despite the generally positive reaction to this piece of legislation, commentators have voiced concerns over one provision added to the bill at the last moment, whereby regular courts will retain jurisdiction over ongoing corruption cases, and any resulting appeals also will be heard in courts of general jurisdiction, rather than the appellate branch of the anti-corruption court.  Anti-corruption activists have expressed outrage at the furtive way in which this provision became part of the law—it was absent from the version of the law read to members of parliament prior to their vote—and have suggested its purpose is to enable the acquittal of certain indicted individuals, already on (or awaiting) trial, by courts of general jurisdiction.

The Americas


A federal magistrate in Argentina has charged former President Cristina Fernández de Kirchner and her children with money laundering and ordered millions in assets seized.  In another enforcement proceeding, the Anticorruption Office is seeking a prison sentence of five-and-a-half years, along with permanent disqualification from public office, against ex-Vice President and former Minister of Finance Amado Boudou after his conviction for "passive bribery" and "transactions incompatible with the exercise of public functions."  The sentencing follows a trial concerning Boudou's purchase of 70% of a then-bankrupt government contractor and his subsequent actions to have the bankruptcy lifted so that the contractor could again participate in federal government contracts. As covered in our Key 2017 Developments in Latin American Anti-Corruption Enforcement client alert, Argentina has passed sweeping new anti-corruption legislation under which legal entities are strictly liable for crimes such as bribery, extortion, or illicit enrichment of public officials that are committed, directly or indirectly, in their name, interest, or benefit.  Punishment for violating the law may result in one or a combination of criminal fines, suspension of state benefits, debarment, and dissolution.  To be exempt from penalties and administrative responsibility under the new law, legal entities must be able to demonstrate that they reported the wrongdoing as a result of a proper internal investigation; implemented a compliance program prior to commission of the act in question; and returned the benefit that was wrongfully obtained.  Companies facing possible sanctions may mitigate their punishment by cooperating in an active investigation.  Such cooperation includes disclosing accurate, actionable information that sheds further light on potential wrongdoing, recovery of assets, or identification of individual offenders. Articles 22 and 23 of the new law outline requirements for compliance or "integrity" programs.  The programs should be designed to prevent, detect, and correct irregularities and illicit acts taken by the corporation, its representatives, or third parties that confer a benefit to the company.  To receive exemption from any penalties under the law, companies must create internal compliance reporting methods and develop procedures to investigate reports.  The law requires that the compliance or integrity program contain at least (1) a code of conduct; (2) rules and procedures to prevent illicit acts in the course of bidding for administrative contracts, or in any other interaction with the public sector; and (3) periodic training programs for directors, administrators, and staff.


Despite facing economic and political uncertainty, Brazil remains a driving force in global anti-corruption efforts.  Brazilian law enforcement entities across the country increasingly are cooperating with each other, as well as with dozens of foreign enforcement authorities.  Operation Lava Jato (Car Wash), now in its fifth year, continues to accumulate convictions related to a vast corruption scheme that exploited contracts with Brazil's state-owned oil company, Petrobras.  So far, prosecutors have charged approximately 400 individuals and obtained more than 200 convictions on charges including corruption, money laundering, and abuse of the international financial system.  Building on its previous efforts, the Car Wash Task Force has initiated four new phases of Car Wash in 2018, many of which dig deeper into allegations that came to light in previous phases. We discussed in our 2017 Year-End FCPA Update the conviction of President Luiz Inácio Lula da Silva on corruption and money laundering charges.  Despite his conviction, Lula remained the front-runner for Brazil's October 2018 presidential election.  In April 2018, however, Lula was ordered to turn himself in and begin serving his 12-year prison sentence.  Now in prison and with little hope of successfully appealing his conviction, it is unlikely Lula will be eligible to run for the presidency. Brazilian authorities also have expanded Operation Carne Fraca ("Weak Flesh"), which covers allegations of bribery in the Brazilian meatpacking industry to evade food safety inspections.  After launching the investigation in 2017, authorities carried out a third investigative phase in March 2018.  The new phase focused on Brazilian food processing giant BRF, with police arresting former BRF CEO Pedro de Andrade Faria, former BRF Vice President of Global Operations Helio dos Santos, and other executives.  Meanwhile, authorities have continued to investigate Brazilian meatpacking company JBS and its parent company, J & F Investimentos.  Its former executives and part owners Joesley and Wesley Batista—who were targets of earlier phases of Weak Flesh, as reported in our 2017 Year-End FCPA Update, and had been in prison since 2017—were released from prison after their prison sentences were commuted to house arrest in February 2018.  In May 2018, Brazilian authorities again arrested Joesley Batista, charging him with corruption, money laundering, and obstruction of justice.  Additional charges are expected, particularly as additional Brazilian law enforcement entities join the investigations.


In February 2018, Public Services and Procurement Canada ("PSPC"), the division of the Canadian government responsible for internal administration, announced that it would introduce legislation to adopt the use of deferred prosecution agreements as a new tool to penalize corporate wrongdoing.  The proposed program, known as the Remediation Agreement Regime, is intended to encourage companies to voluntarily disclose potential misconduct by offering a potential alternative to criminal conviction and debarment.  Legislation to adopt the Regime was introduced in March 2018.  Under the proposed bill, "remediation agreements" would be subject to prosecutorial discretion and, as in the United Kingdom, would require judicial approval and oversight.  Notably, only certain economic crimes—bribery, fraud, insider trading, and books-and-records violations, among others—would be eligible for deferred prosecution under the current draft of the bill. In addition to proposing the adoption of deferred prosecution agreements, PSPC in March further announced it would work to enhance the government-wide "Integrity Regime" debarment program.  Under the current program, companies convicted of certain white collar offenses are banned from bidding on government contracts for a period of 10 years, which can be reduced to a five-year ban in certain circumstances.  According to a March 2018 press release, enhancements to the program will include increasing the number of triggers that can lead to debarment, as well as introducing greater flexibility in debarment decisions.  A detailed description of the Integrity Regime's new provisions will be included in a revised Ineligibility and Suspension Policy to be published on November 15, 2018.  The enhanced program will come into effect on January 1, 2019.


As reported in our 2017 Mid-Year FCPA Update, former National Director of Anti-Corruption for Colombia's Office of the Attorney General Luis Gustavo Moreno Rivera was charged in U.S. federal court with conspiracy to commit money laundering and related charges in June 2017.  On May 18, 2018, Moreno was extradited from Bogotá to Miami on charges stemming from an alleged bribery scheme.  Moreno and his purported middleman, Colombian attorney Leonardo Luis Pinilla Gomez, are accused of receiving a $10,000 bribe in a Miami mall bathroom in exchange for confidential information, including witness statements, from Moreno's corruption investigation of former Córdoba governor Alejandro Lyons Muskus.  The exchange allegedly was a down payment for a $132,000 deal, in which Moreno agreed to discredit a witness in a case against Lyons before the IRS.  Recorded conversations purportedly capture Moreno and Pinilla discussing Moreno's ability to control and obstruct the investigation.  Moreno and Pinilla were arraigned in Miami in late May and face wire fraud and money laundering-related charges. In August 2018, Colombia will hold a public referendum allowing citizens to vote on seven proposals aimed at combating graft and corruption.  The referendum will include provisions amending prison sentences and imposing lifelong bans on government employment for individuals found guilty of corruption, lower salaries for legislators and senior government officials, terms limits for holding office in public companies, and greater transparency in the bidding processes for government contracts.


Corruption investigations in Guatemala continued to face obstacles in early 2018.  As noted in our 2017 Year-End FCPA Update, President Jimmy Morales attempted to expel from Guatemala Iván Velásquez, a Colombian prosecutor and head of the International Commission Against Impunity (known by its Spanish acronym "CICIG"), on August 27, 2017.  CICIG is a U.N. commission created in 2006 to investigate corruption in the Guatemalan government.  The attempted expulsion came after Velásquez and Guatemalan Attorney General Thelma Aldana announced an investigation into Morales for illegal campaign financing.  Though the Guatemalan Supreme Court blocked the expulsion and other attempts to prevent investigations into Morales, CICIG remains embattled. In March 2018, the Guatemalan government removed 11 national police investigators from CICIG, disrupting the investigation into Morales and other high-ranking government officials.  Additionally, U.S. Senator Marco Rubio has placed $6 million in U.S. aid to CICIG, which represents a third of its annual budget, on hold, citing suspected manipulation of CICIG by Russian bank VTB to politically persecute a Russian family.  Rubio's concerns stem from CICIG's involvement in the criminal conviction of the Bitkov family, Russian nationals found guilty of purchasing false Guatemalan passports and entering Guatemala illegally after the state-owned Russian bank targeted their paper business. Despite these challenges, CICIG has moved forward with other investigations.  In February, former President Álvaro Colom and nine members of his cabinet were arrested.  Among them is Juan Alberto Fuentes Knight, a former finance minister and current chairman of Oxfam International.  The investigation concerns a $35 million deal for a public bus system in Guatemala City.  Prosecutors allege that nearly a third of the funding was spent on equipment that went unused.


The Organization of American States Mission to Support the Fight Against Corruption and Impunity in Honduras (known by its Spanish-language acronym, "MACCIH") has faced a number of setbacks over the past six months.  In December 2017, MACCIH and the Public Ministry (national prosecutors) indicted five outgoing members of the Honduran Congress for misappropriating public funds in a case known as Red de Diputados.  Around the time of the announcement, then-Spokesman and Head of MACCIH Juan Jiménez Mayor said that between 60 and 140 additional legislators were under investigation as part of the corruption probe.  Shortly thereafter, Congress passed a law blocking MACCIH from assisting the Public Ministry, and ordering the Tribunal Superior de Cuentas ("TSC")—a government body dominated by ruling party stalwarts—to engage in an audit of the funds that Congress members have received since 2006.  The new measure shields members of Congress from legal action until the TSC concludes its investigation, which may take several years.  Citing the new law, the judge overseeing the Red de Diputados case released the five indicted congresspersons and postponed their trial.  On February 15, 2018, MACCIH's director, Jiménez Mayor, announced in an open letter that he was resigning from the organization as a result of the challenges of working with the Honduran government and a lack of support from OAS Secretary General Luis Almagro Lemes. In late May 2018, the Honduran Supreme Court partially invalidated an agreement that created the Fiscal Unit Against Impunity and Corruption ("UFECIC"), the entity within the Public Ministry that worked with MACCIH.  The controversial ruling came in response to a legal challenge to MACCIH brought by three individuals accused by prosecutors and MACCIH of embezzling money in connection with the Red de Diputados case.  The plaintiffs argued that MACCIH should be declared unconstitutional because it violated Honduras' sovereignty and the independence of its governmental organizations.  Though the court rejected that argument, it determined that the UFECIC, by serving as MACCIH's investigative arm, impermissibly delegated constitutional functions to MACCIH and thus should be invalidated.  The Supreme Court's decision followed lobbying by members of Honduras's Congress—many of whom were being investigated by MACCIH—to invalidate the entire anti-corruption mission.  The opinion has been criticized by anti-corruption advocates.


On May 18, 2018, the Mexican government published new requirements for companies wishing to contract with Petróleos Mexicanos ("PEMEX"), the Mexican state-owned oil company and a subject of numerous FCPA enforcement actions.  The new rules require parties contracting with PEMEX to have compliance programs designed to prevent and detect any instances of corruption.  The compliance program must remain in force for the duration of the contract with PEMEX and PEMEX has the power to verify the program.  The newly published regulations do not specify requirements for the compliance program, though one guidepost may be the Mexican Ministry of Public Administration's Model Program for Company Integrity in the recently passed General Law of Administrative Responsibility ("GLAR").  As discussed in our Key 2017 Developments in Latin American Corruption Enforcement client alert, the Model Program calls for clearly written anti-corruption policies and procedures, training, and avenues for reporting potential misconduct. In October 2017, Santiago Nieto was fired from his post as Special Prosecutor for Electoral Crimes.  Nieto claimed that his firing was politically motivated to halt his investigation into whether funds solicited by Emilio Lozoya Austin—CEO of PEMEX—were used to finance President Enrique Peña Nieto's 2012 campaign.  This May, the Mexican government initiated an investigation against Lozoya, which remains ongoing.  Lozoya is alleged to have requested and received millions of dollars of improper payments from the Brazilian construction firm Odebrecht.  Nevertheless, the Mexican government has thus far not pursued further investigations into whether government officials accepted bribes from Odebrecht.  In April, Mexico issued administrative sanctions against Odebrecht, barring the company from doing business in the country for at least two years and three months.  The Mexican government also has fined Odebrecht $30 million.


Peruvian President Pedro Pablo Kuczynski resigned on March 21, 2018, the day before a scheduled congressional impeachment vote.  As reported in our 2017 Year-End FCPA Update, Kuczynski has been the subject of an investigation involving former Odebrecht CEO Marcelo Odebrecht's alleged payment of $29 million in bribes to Peruvian officials, including Kuczynski and former presidents Ollanta Humala and Alejandro Toledo.  Kuczsynski's resignation followed quickly after surreptitiously recorded videos purported to show his colleagues, including Peruvian congressman Kenji Fujimori, bribing opponents with public contracts in exchange for voting against his impeachment in the 2018 vote.  Martín Vizcarra, the Vice-President, assumed the Peruvian presidency in Kuczynski's place and will serve out his term through 2021. On June 10, 2018, Peruvian prosecutors formally opened an investigation into Kuczynski, Toledo, and former president Alan García for allegedly accepting bribes from Odebrecht.  The three former Peruvian Presidents are suspected of promising construction contracts in exchange for undeclared campaign contributions.  Humala already was under investigation for similar allegations; he and his wife were arrested in July 2017 but were released in May 2018 because no formal charges had yet been filed against them.  Toledo, who has been living in the United States, continues to fight extradition to Peru.



Bangladesh's former two-term Prime Minister, Khaleda Zia, was sentenced to a five-year prison term in February 2018.  Zia had been convicted of embezzling donations meant for an orphanage trust established during her term as Prime Minister.  In March 2018, a Bangladeshi court granted bail to Zia, prompting hopes that she could participate in a December general election.  Despite a decision by the  Bangladeshi Supreme Court upholding a lower court's decision to grant Zia bail, Zia remains imprisoned as her bail related to other charges has been denied.  Zia faces more than 30 separate inquiries into allegations of violence and corruption.


China's anti-corruption campaign continues to be a priority as Xi Jinping moves into his second term.  Following the nationwide pilot scheme of the National Supervisory System rolled out in November 2017, in March 2018 the National People's Congress ("NPC") passed the Supervision Law of the People's Republic of China ("PRC Supervision Law") and at the same time amended the Chinese Constitution.  This provided legal and constitutional foundation for the National Supervisory System.  Supervisory Commissions at national and local levels are a new organ of the state and have jurisdiction to investigate corruption by all public servants in China, including those who are not party members.  Supervisory commissions have broad investigative powers to conduct interviews and interrogations, carry out inquiries and searches, freeze assets, obtain, seal/block and seize properties, records and evidence, conduct inquests, inspections and forensic examinations, and to detain individuals under a new mechanism known as "Liu Zhi."  The 2018 NPC also approved a wide ranging reorganization of the Ministries under the State Council.  This means that enforcement of commercial bribery offenses under the Anti-Unfair Competition Law will now be carried out by the new State Administration for Market Regulation and its local counterparts. The first half of 2018 has also seen prosecution and sentencing of a number of high-profile individuals for corruption offenses.  Most notably in May 2018, Sun Zhengcai, a former member of the Politburo, was sentenced to life for bribery.  Sun had served as party chief of Chongqing, succeeding Bo Xilai who was sentenced to life imprisonment for corruption offenses in 2013.  He is the first serving member of the Politburo to be targeted by the campaign.  Xiang Junbo, the former Chairman of China's now-defunct insurance regulator and the highest-ranking finance official snared in China's anti-corruption campaign, has pleaded guilty to taking bribes and is awaiting sentencing.


In February 2018, the Central Bureau of Investigation ("CBI") registered a case against executives of the Indian subsidiary of U.S.-based engineering and construction firm CDM Smith, as well as officials of the National Highways Authority of India ("NHAI").  According to the CBI, CDM Smith paid bribes through its Indian subsidiary to various officials of the NHAI to secure infrastructure contracts between 2011 and 2016. The CDM Smith executives that stand accused allegedly disguised their bribes as "allowable business expenses" on their income tax returns.  The CBI enforcement action follows the 2016 Pilot Program declination with CDM Smith (covered in our 2017 Mid-Year FCPA Update) in which CDM Smith agreed to disgorge just over $4 million in profits in connection with the alleged improper payments to the NHAI. On April 4, 2018, the Indian government sought to pass the Prevention of Corruption (Amendment) Bill, 2013 (discussed in our 2016 Year-End FCPA Update) at a parliamentary session held at the Rajya Sabha (otherwise known as the Council of States, the upper house of the Indian Parliament).  The proposed law would introduce specific offenses and fines for commercial organizations engaging in bribery in India, create a specific offense for offering a bribe, and provide for criminal liability for company management of companies engaging in corrupt practices.  However, the Bill failed to be passed.  The Bill's prospects of passage remain unclear.


The first half of 2018 saw a number of high-profile charges and convictions for corruption-related offenses.  As reported in our 2017 Year-End FCPA Update, then-President Park Geun-Hye was impeached in December 2016 amid allegations of influence peddling and corruption.  In April 2018, Park was convicted of 16 corruption-related offenses, including abuse of power, bribery, and coercion.  She was sentenced to 24 years' imprisonment and a fine of KRW 18 billion (approximately $16 million).  Park decided not to appeal her sentence and is currently serving her jail term.  Choi Soon-Sil, Park's friend and advisor who was accused of coercing Korean conglomerates into donating millions of dollars to charitable organizations connected to the former President, was sentenced in February 2018 to 20 years' imprisonment for influence peddling, abuse of power, and corruption. In March 2018, another former Korean President, Lee Myung-Bak, was arrested on multiple charges of corruption, including bribery, embezzlement, tax evasion, and abuse of power.  Lee allegedly received more than KRW 11 billion (approximately $10 million) in bribes before and during his presidency.  Lee's trial began at the end of May 2018 and is ongoing. As reported in our 2017 Year-End FCPA Update, Samsung Electronics Vice Chairman Lee Jae Yong was convicted of bribery and related charges and sentenced to five years' imprisonment in August 2017.  In an unexpected turn of events, Lee was released from prison in February 2018, after the Seoul High Court halved his jail term to 2.5 years and suspended his sentence on appeal.  In contrast, Lotte Group's Chairman Shin Dong Bin was convicted of bribery and sentenced to 30 months' imprisonment and a fine of KRW 7 billion (approximately $6.5 million) in February 2018.  The court found that he paid KRW 7 billion (approximately $6.5 million) to Choi Soon-Sil's K Sports Foundation in return for Park's support of reissuing Lotte's business permit to operate its duty-free stores.  Shin remains imprisoned while his appeal of the sentence continues.

Middle East and Africa


In January 2018, the Office of Israel's Tax and Economic Prosecutor announced that it reached a Conditional Agreement with Teva Pharmaceuticals Industries Ltd, the world's largest manufacturer of generic pharmaceutical products.  The agreement arose from alleged corrupt payments made between 2002 and 2012 to high-ranking ministry of health officials in Russia and Ukraine to influence the approval of drug registrations, as well as to state-employed physicians in Mexico to influence the prescription of products.  As part of the agreement with Israeli authorities, Teva agreed to pay a fine of approximately $22 million, on top of the $519 million it paid to resolve FCPA charges arising from the same conduct, as covered in our 2016 Year-End FCPA Update.  This was the second enforcement action brought under Israel's foreign bribery statute and the first involving a Conditional Agreement.  Israeli prosecutors stated that the decision to enter into a Conditional Agreement with Teva was based on various factors, including the large penalty already paid to U.S. authorities, Teva's cooperation and remediation, and recent financial hardships incurred by Teva.

Saudi Arabia

Earlier this year, Saudi officials began taking steps to conclude a large anti-corruption probe initiated in November 2017 by Saudi Arabian Crown Prince Mohammed bin Salman that involved the detainment and questioning of hundreds of influential Saudis (covered in our 2017 Year-End FCPA Update).  According to one prosecutor, the government reached settlements worth $106 billion as a result of the probe.  Although most detainees have been released, some remain in custody pending trial.  Some analysts have viewed the corruption campaign as a power grab by Prince Mohammed, but the Saudi government insists its focus is combating endemic corruption.  In March 2018, Saudi officials announced that new anti-corruption departments were added to the Attorney General's office in furtherance of King Salman and Crown Prince Mohammed's goal to eradicate corruption.

South Africa

In April 2018, South African officials announced the reopening of a corruption investigation involving alleged abuse of public funds for a dairy farm in Vrede.  The investigation initially focused on Ace Magashule, secretary general of the African National Congress, and Mosebenzi Joseph Zwane, the former minister of mineral resources.  According to prosecutors, the dairy farm project was intended to help black farmers but instead funneled $21 million to business allies of the African National Congress.  As part of the investigation, prosecutors seized $21 million from three brothers known to be family friends and political allies of South Africa's former President Jacob Zuma, who was ousted in February 2018 in connection with corruption allegations.


As is our semiannual tradition, over the following weeks Gibson Dunn will be publishing a series of enforcement updates for the benefit of our clients and friends as follows:
  • Tuesday, July 10 – 2018 Mid-Year Update on Corporate NPAs and DPAs;
  • Wednesday, July 11 – 2018 Mid-Year False Claims Act Update;
  • Thursday, July 12 – Developments in the Defense of Financial Institutions;
  • Friday, July 13 – 2018 Mid-Year Class Actions Update;
  • Monday, July 16 – 2018 Mid-Year UK White Collar Crime Update;
  • Tuesday, July 17 – 2018 Mid-Year Media and Entertainment Update;
  • Wednesday, July 18 – 2018 Mid-Year Securities Litigation Update;
  • Thursday, July 19 – 2018 Mid-Year Government Contracts Litigation Update;
  • Monday, July 23 – 2018 Mid-Year UK Labor & Employment Update;
  • Tuesday, July 24 – 2018 Mid-Year Shareholder Activism Update;
  • Thursday, July 26 – 2018 Mid-Year Healthcare Compliance and Enforcement Update – Providers;
  • Friday, July 27 – 2018 Mid-Year Securities Enforcement Update; and
  • Wednesday, August 1 – 2018 Mid-Year FDA and Health Care Compliance and Enforcement Update – Drugs and Devices.

The following Gibson Dunn lawyers assisted in preparing this client update: F. Joseph Warin, John Chesley, Richard Grime, Christopher Sullivan, Jacob Arber, Elissa Baur, Josh Burk, Ella Alves Capone, Claire Chapla, Grace Chow, Stephanie Connor, Daniel Harris, William Hart, Patricia Herold, Korina Holmes, Derek Kraft, Miranda Lievsay, Zachariah Lloyd, Lora MacDonald, Andrei Malikov, Michael Marron, Jesse Melman, Steve Melrose, Jaclyn Neely, Jonathan Newmark, Nick Parker, Jeffrey Rosenberg, Rebecca Sambrook, Emily Seo, Jason Smith, Pedro Soto, Laura Sturges, Karthik Ashwin Thiagarajan, Caitlin Walgamuth, Alina Wattenberg, Oliver Welch, Oleh Vretsona, and Carissa Yuk.

Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these issues.  We have more than 110 attorneys with FCPA experience, including a number of former federal prosecutors and SEC officials, spread throughout the firm's domestic and international offices.  Please contact the Gibson Dunn attorney with whom you work, or any of the following leaders and members of the FCPA group: Washington, D.C. F. Joseph Warin - Co-Chair (+1 202-887-3609, fwarin@gibsondunn.com) Richard W. Grime (+1 202-955-8219, rgrime@gibsondunn.com) Patrick F. Stokes (+1 202-955-8504, pstokes@gibsondunn.com) Judith A. Lee (+1 202-887-3591, jalee@gibsondunn.com) David P. Burns (+1 202-887-3786, dburns@gibsondunn.com) David Debold (+1 202-955-8551, ddebold@gibsondunn.com) Michael S. Diamant (+1 202-887-3604, mdiamant@gibsondunn.com) John W.F. Chesley (+1 202-887-3788, jchesley@gibsondunn.com) Daniel P. Chung (+1 202-887-3729, dchung@gibsondunn.com) Stephanie Brooker (+1 202-887-3502, sbrooker@gibsondunn.com) M. Kendall Day (+1 202-955-8220, kday@gibsondunn.com) Stuart F. Delery (+1 202-887-3650, sdelery@gibsondunn.com) Adam M. Smith (+1 202-887-3547, asmith@gibsondunn.com) Oleh Vretsona (+1 202-887-3779, ovretsona@gibsondunn.com) Christopher W.H. Sullivan (+1 202-887-3625, csullivan@gibsondunn.com) Courtney M. Brown (+1 202-955-8685, cmbrown@gibsondunn.com) Jason H. Smith (+1 202-887-3576, jsmith@gibsondunn.com) Ella Alves Capone (+1 202-887-3511, ecapone@gibsondunn.com) Pedro G. Soto (+1 202-955-8661, psoto@gibsondunn.com) New York Reed Brodsky (+1 212-351-5334, rbrodsky@gibsondunn.com) Joel M. Cohen (+1 212-351-2664, jcohen@gibsondunn.com) Lee G. Dunst (+1 212-351-3824, ldunst@gibsondunn.com) Mark A. Kirsch (+1 212-351-2662, mkirsch@gibsondunn.com) Alexander H. Southwell (+1 212-351-3981, asouthwell@gibsondunn.com) Lawrence J. Zweifach (+1 212-351-2625, lzweifach@gibsondunn.com) Daniel P. Harris (+1 212-351-2632, dpharris@gibsondunn.com) Denver Robert C. Blume (+1 303-298-5758, rblume@gibsondunn.com) John D.W. Partridge (+1 303-298-5931, jpartridge@gibsondunn.com) Ryan T. Bergsieker (+1 303-298-5774, rbergsieker@gibsondunn.com) Laura M. Sturges (+1 303-298-5929, lsturges@gibsondunn.com) Los Angeles Debra Wong Yang - Co-Chair (+1 213-229-7472, dwongyang@gibsondunn.com) Marcellus McRae (+1 213-229-7675, mmcrae@gibsondunn.com) Michael M. Farhang (+1 213-229-7005, mfarhang@gibsondunn.com) Douglas Fuchs (+1 213-229-7605, dfuchs@gibsondunn.com) San Francisco Winston Y. Chan (+1 415-393-8362, wchan@gibsondunn.com) Thad A. Davis (+1 415-393-8251, tadavis@gibsondunn.com) Marc J. Fagel (+1 415-393-8332, mfagel@gibsondunn.com) Charles J. Stevens - Co-Chair (+1 415-393-8391, cstevens@gibsondunn.com) Michael Li-Ming Wong (+1 415-393-8333, mwong@gibsondunn.com) Palo Alto Benjamin Wagner (+1 650-849-5395, bwagner@gibsondunn.com) London Patrick Doris (+44 20 7071 4276, pdoris@gibsondunn.com) Charlie Falconer (+44 20 7071 4270, cfalconer@gibsondunn.com) Sacha Harber-Kelly (+44 20 7071 4205, ) Philip Rocher (+44 20 7071 4202, procher@gibsondunn.com) Steve Melrose (+44 (0)20 7071 4219, smelrose@gibsondunn.com) Paris Benoît Fleury (+33 1 56 43 13 00, bfleury@gibsondunn.com) Bernard Grinspan (+33 1 56 43 13 00, bgrinspan@gibsondunn.com) Jean-Philippe Robé (+33 1 56 43 13 00, jrobe@gibsondunn.com) Audrey Obadia-Zerbib (+33 1 56 43 13 00, aobadia-zerbib@gibsondunn.com) Munich Benno Schwarz (+49 89 189 33-110, bschwarz@gibsondunn.com) Michael Walther (+49 89 189 33-180, mwalther@gibsondunn.com) Mark Zimmer (+49 89 189 33-130, mzimmer@gibsondunn.com) Hong Kong Kelly Austin (+852 2214 3788, kaustin@gibsondunn.com) Oliver D. Welch (+852 2214 3716, owelch@gibsondunn.com) São Paulo Lisa A. Alfaro - Co-Chair (+55 (11) 3521-7160, lalfaro@gibsondunn.com) Fernando Almeida (+55 (11) 3521-7095, falmeida@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, CA 90071 Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

May 1, 2017 |
Key Developments in Latin American Anti-Corruption Enforcement

Washington, D.C. partner F. Joseph Warin; Los Angeles partner Michael Farhang and associates Michael Galas, Abiel Garcia, and John Sandoval; São Paulo partner Lisa Alfaro; Denver associate Tafari Lumumba; and Orange County associate Sydney Sherman are the authors of “Key 2017 Developments in Latin American Anti-Corruption Enforcement,” [PDF] published in Trade Security Journal on May 2017.

May 2, 2018 |
Lisa Alfaro Named Among Top Latin America Women Lawyers

Latinvex named São Paulo partner Lisa Alfaro to its 2018 Latin America’s Top 100 Female Lawyers list in the Energy and FCPA & Fraud categories. The list recognizes “the top 100 female lawyers specializing in Latin America among international law firms.” The list was published on May 2, 2018.

March 15, 2018 |
Key 2017 Developments in Latin American Anti-Corruption Enforcement

Click for PDF In 2017, several Latin American countries stepped up enforcement and legislative efforts to address corruption in the region.  Enforcement activity regarding alleged bribery schemes involving construction conglomerate Odebrecht rippled across Latin America's business and political environments during the year, with allegations stemming from Brazil's ongoing Operation Car Wash investigation leading to prosecutions in neighboring countries.  Simultaneously, governments in Latin America have made efforts to strengthen legislative regimes to combat corruption, including expanding liability provisions targeting foreign companies and private individuals.  This update focuses on five Latin American countries (Mexico, Brazil, Argentina, Colombia, and Peru) that have ramped up anti-corruption enforcement or passed legislation expanding anti-corruption legal regimes.[1]  New laws in the region, coupled with potentially renewed prosecutorial vigor to enforce them, make it imperative for companies operating in Latin America to have robust compliance programs, as well as vigilance regarding enforcement trends impacting their industries.

1.    Mexico

Notable Enforcement Actions and Investigations

In 2017, Petróleos Mexicanos ("Pemex") disclosed that Mexico's Ministry of the Public Function (SFP) initiated eight administrative sanctions proceedings in connection with contract irregularities involving Odebrecht affiliates.[2]  The inquiries stem from a 2016 Odebrecht deferred prosecution agreement ("DPA") with the U.S. Department of Justice ("DOJ").[3]  According to the DPA, Odebrecht made corrupt payments totaling $10.5 million USD to Mexican government officials between 2010 and 2014 to secure public contracts.[4]  In September 2017, Mexico's SFP released a statement noting the agency had identified $119 million pesos (approx. $6.7 million USD) in administrative irregularities involving a Pemex public servant and a contract with an Odebrecht subsidiary.[5] In December 2017, Mexican law enforcement authorities arrested a former high-level official in the political party of Mexican President Enrique Peña Nieto.[6]  The former official, Alejandro Gutiérrez, allegedly participated in a broad scheme to funnel public funds to political parties.[7]  While the inquiry has not yet enveloped the private sector like Brazil's Operation Car Wash investigation, the prosecution could signal a new willingness from Mexican authorities to take on large-scale corruption cases.  The allegations are also notable due to their similarity to the allegations in Brazil's Car Wash investigation.  In both inquiries, funds were allegedly embezzled from state coffers for the benefit of political party campaigns.

Legislative Update

Mexico's General Law of Administrative Responsibility ("GLAR")—an anti-corruption law that provides for administrative liability for corporate misconduct—took effect on July 19, 2017.  The GLAR establishes administrative penalties for improper payments to government officials, bid rigging in public procurement processes, the use of undue influence, and other corrupt acts.[8]  The law reinforces a series of Mexican legal reforms from 2016 that expanded the scope of the country's existing anti-corruption laws and created a new anti-corruption enforcement regime encompassing federal, state, and municipal levels of government.  Among the GLAR's most significant changes are provisions that target corrupt activities by corporate entities and create incentives for companies to implement compliance programs to avoid or minimize corporate liability. The GLAR applies to all Mexican public officials who commit what the law calls "non-serious" and "serious" administrative offenses.[9]  Non-serious administrative offenses include the failure to uphold certain responsibilities of public officials, as defined by the GLAR (e.g., cooperating with judicial and administrative proceedings, reporting misconduct, etc.).[10]  Serious administrative offenses include accepting (or demanding) bribes, embezzling public funds, and committing other corrupt acts, as defined by the GLAR.[11]  The GLAR also applies to private persons (companies and individuals) who commit acts considered to be "linked to serious administrative offenses."[12]  These offenses include the following:
  • Bribery of a public official (directly or through third parties)[13];
  • Participation in any federal, state, or municipal administrative proceedings from which the person has been banned for past misconduct[14];
  • The use of economic or political power (be it actual or apparent) over any public servant to obtain a benefit or advantage, or to cause injury to any other person or public official[15];
  • The use of false information to obtain an approval, benefit, or advantage, or to cause damage to another person or public servant[16];
  • Misuse and misappropriation of public resources, including material, human, and financial resources[17];
  • The hiring of former public officials who were in office the prior year, acquired confidential information through their prior employment, and give the contractor a benefit in the market and an advantage against competitors[18]; and
  • Collusion with one or more private parties in connection with obtaining improper benefits or advantages in federal, state, or municipal public contracting processes.[19]  Notably, the collusion provisions apply extraterritorially and ban coordination in "international commercial transactions" involving federal, state, or municipal public contracting processes abroad.[20]
The GLAR provides administrative penalties for violations committed by both physical persons and legal entities.  Physical persons who violate the GLAR can be subjected to: (1) economic sanctions (up to two times the benefit obtained, or up to approximately $597,000 USD)[21]; (2) preclusion from participating in public procurements and projects (for a maximum of eight years)[22]; and/or (3) liability for any damages incurred by any affected public entities or governments.[23] Legal entities, on the other hand, can be fined up to twice the benefit obtained, or up to approximately $5,970,000 USD, precluded from participating in public procurements for up to ten years, and held liable for damages.[24]  The GLAR also creates two additional penalties for legal entities:  suspension of activities within the country for up to three years, and dissolution.[25]  Article 81 limits the ability to enforce these two stiffer penalties to situations where (1) there was an economic benefit and the administration, compliance department, or partners were involved, or (2) the company committed the prohibited conduct in a systemic fashion.[26]  The GLAR's penalties for physical and legal persons are administrative, rather than criminal. Under Article 25 of the GLAR, Mexican authorities can take into account a company's robust compliance "Integrity Program" in determining and potentially mitigating corporate liability under the GLAR.[27]  The law requires the Integrity Program to have several elements, including clearly written policies and adequate review, training, and reporting systems.[28] The GLAR contains a self-reporting incentive that provides for up to a seventy percent reduction of penalties for those who report past or ongoing misconduct to an investigative authority.[29]  As previously noted, the GLAR's non-monetary sanctions include preclusion from participating in public procurements and projects for up to eight years (for physical persons) or ten years (for companies).[30]  If a person subject to a preclusion sanction self-reports GLAR violations, the preclusion sanction can be reduced or completely lifted by the Mexican authorities.[31]  Requirements for obtaining a reduction of penalties through self-reporting include: (1) involvement in an alleged GLAR infraction and being the first to contribute information that proves the existence of misconduct and who committed the violations; (2) refraining from notifying other suspects that an administrative responsibility action has been initiated; (3) full and ongoing cooperation with the investigative authorities; and (4) suspension of any further participation in the alleged infraction.[32] Notably, other participants in the alleged misconduct who might be the second (or later) to disclose information could receive up to a fifty percent penalty reduction, provided that they also comply with the above requirements.[33]  If a party confesses information to the investigative authorities after an administrative action has already begun, that party could potentially receive a thirty percent reduction of penalties.[34] For a full analysis of the GLAR, see https://www.gibsondunn.com/mexicos-new-general-law-of-administrative-responsibility-targets-corrupt-activities-by-corporate-entities/.

2.    Brazil

Following the success of the massive Operation Car Wash investigation into corruption involving the country's energy sector, Brazilian regulators launched or advanced inquiries in 2017 impacting companies in the healthcare, meatpacking, and financial industries, among others.  Brazilian authorities have also continued to garner international accolades for their anti-corruption work, with Brazil's federal prosecution service ("Ministério Público Federal" or "MPF") winning Global Investigation Review's "Enforcement Agency or Prosecutor of the Year" award for its 2017 Operation Car Wash efforts.[35]  This award follows a 2016 recognition of the Car Wash Taskforce by Transparency International.[36]  The robust enforcement environment in Brazil is also reflected in this year's public company disclosures.  In 2017, thirty-four companies disclosed information regarding new or ongoing inquiries involving Brazil, while disclosures regarding other Latin American nations numbered in the single digits.[37]

2017 Disclosures of Open / Ongoing Investigations

Notable Enforcement Actions and Investigations

A.    Operation Car Wash (Operação Lava Jato)

Operation Car Wash, the multi-year investigation into allegations of corruption related to contracts with state-owned oil company Petrobras, has remained a focus area for the Brazilian authorities.  The investigation opened four new phases in 2017.  Notably, in October 2017, Judge Sergio Moro—the lead jurist for the investigation—stated at a public event that the Car Wash inquiry was "moving toward the final phase."[38]  Judge Moro did not, however, provide a potential date for closing the investigation, stating, "a good part of the work is done, but this does not mean that work does not remain."[39]  To date, Brazilian authorities investigating the Car Wash allegations have obtained 177 convictions, with sentences totaling more than 1,750 years in prison.[40]

B.    Operation Zealots (Operação Zelotes)

In 2017, Brazilian authorities launched new phases of Operation Zealots, a multi-year investigation into alleged payments to members of Brazil's Administrative Board of Tax Appeals.[41]  The investigation began as an inquiry into one of the largest alleged tax evasion schemes in the country's history.  Large companies and banks, including Bradesco, Santander, and Safra, allegedly paid bribes to members of the appeals board in exchange for a reduction or waiver of taxes owed.[42]  Operation Zealots was launched in 2015 and initially implicated companies in the financial sector.  The scope of the investigation has expanded in the last two years to also reach companies in the automobile sector and a Brazilian steel distributor.[43]  Notably, in 2017, a criminal complaint was filed against former Brazilian President Luiz Inácio Lula da Silva alleging that he received payments in exchange for securing tax benefits for automobile companies.[44]  The total amount of evaded taxes through various alleged Operation Zealots schemes is estimated to reach nearly $19 billion BRL (approx. $5.8 billion USD).[45]

C.    Operation Weak Flesh (Operação Carne Fraca)

In early 2017, the Brazilian Federal Police launched an investigation into the alleged bribery of government food sanitation inspectors called Operation Weak Flesh.[46]  The operation was reported to be one of the largest in the history of the Federal Police, with Brazilian authorities executing 194 search-and-seizure warrants.[47]  Dozens of inspectors are accused of taking bribes in exchange for allowing the sale of rancid products, falsifying export documents, overlooking illicit additives, and failing to inspect meatpacking plants.[48]  Authorities are investigating more than thirty meatprocessing companies, including giants such as JBS S.A. and BRF S.A.

D.    Operation Bullish (Operação Bullish)

On May 12, 2017, the Federal Police launched Operation Bullish, an investigation into fraud and irregularities in the manner by which Brazil's National Bank for Economic and Social Development approved investments of over $8 billion BRL (approx. $2.4 billion USD) for the expansion of the Brazilian meatpacking company JBS.[49]  While JBS claims that it did not receive any favors from the bank's investment arm ("BNDESPar"), Brazil's Federal Court of Accounts ("TCU") claims that the bank approved "risky" investments for JBS with inadequate time for analysis.[50]  The Federal Police further claim that although BNDESPar approved funds for a JBS acquisition of a foreign company, the acquisition never occurred and the investment funds were never returned.[51]

E.    Operation Mister Hyde (Operação Mister Hyde)

Brazilian authorities also continued inquiries in the healthcare space as part of a multi-year investigation into an alleged "Prosthetics Mafia" of doctors and medical instrument suppliers that rigged the bidding process for surgical supplies.  Investigators alleged that in exchange for payments, doctors would identify patients for unnecessary surgeries and ensure that the surgical instruments used in the operations came from a specified provider.[52]  The inquiry stems from a 2015 congressional investigation.  In February 2017, it was reported that three employees from one of the companies under investigation, TM Medical, agreed to plea bargains with the federal authorities.[53]

Settlements and Leniency Agreements

UTC Engenharia.  In July 2017, UTC Engenharia signed a leniency agreement with the Brazilian government and agreed to pay $574 million BRL (approx. $175 million USD), including a fine, damages, and unjust enrichment.[54]  UTC signed the agreement with Brazil's Comptroller General of the Union ("CGU") and Brazil's Federal Attorney General's Office.[55]  Under the agreement, UTC must adopt an integrity program and pay its fine within twenty-two years.[56] According to the Brazilian government, the agreement reflects "the basic pillars enumerated by the two federal agencies in the negotiations, that is, speed in obtaining evidence, identification of others involved in the crimes, cooperation with investigations, and commitment to the implementation of effective integrity mechanisms."[57]  Notably, according to the press release, the implementation of UTC's integrity program "will be monitored by the CGU, which can perform inspections at the company and request access to any documents and information necessary."[58] Rolls-Royce plc.  In January 2017, Rolls-Royce settled allegations that the company offered, paid, or failed to prevent bribes involving the sale of engines, energy systems, and related services in Brazil and five other foreign jurisdictions.[59]  According to charging documents, between 2003 and 2013, Rolls-Royce allegedly made commission payments to an intermediary while knowing that portions of the payments would be paid to officials at Brazil's state-owned oil company Petrobras.[60]  Rolls-Royce's intermediary allegedly made more than $1.6 million BRL (approx. $485,700 USD) in corrupt payments to obtain contracts for supplying equipment and long-term service agreements.[61]  As a part of a global settlement with DOJ, Britain's Serious Fraud Office, and Brazil's Ministério Público Federal, Rolls-Royce agreed to pay $800 million USD total, with $25.5 million USD of that settlement being paid to the Brazilian authorities.[62] SBM Offshore N.V.  In November 2017, SBM settled allegations with DOJ that the company made payments to foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan, and Iraq.[63]  According to the DPA, SBM used a sales agent to provide payments and hospitalities to Petrobras executives to secure an improper advantage in business with the state-owned company.[64]  SBM agreed to pay a $238 million USD criminal fine.[65]  DOJ took into account overlapping conduct prosecuted by other jurisdictions when calculating SBM's fine, including the company's ongoing negotiations with the MPF and a $240 million USD settlement with the Dutch authorities.[66]  The government's press release also stated that DOJ was "grateful to Brazil's MPF" and authorities in the Netherlands and Switzerland "for providing substantial assistance in gathering evidence during [the] investigation."[67] Braskem/Odebrecht.  In December 2016, Brazilian construction conglomerate Odebrecht and its petrochemical production subsidiary, Braskem, resolved bribery charges with authorities in Brazil, Switzerland, and the United States.[68]  At the time of the 2016 settlement, the DOJ/SEC segment of the multibillion-dollar resolution was $419 million USD.  The settlement agreement did note, however, that Odebrecht represented it could pay no more than $2.6 billion USD in penalties.[69]  The agreement further noted that the Brazilian and U.S. authorities would conduct an independent analysis of Odebrecht's representation.[70]  According to an April 2017 sentencing memorandum filed with the court, the U.S. and Brazilian authorities analyzed Odebrecht's ability to pay the proposed penalty and determined that Odebrecht was indeed unable to pay a total criminal penalty in excess of $2.6 billion USD.[71]  The sentencing memorandum noted the parties agreed that Odebrecht would therefore pay a reduced fine of $93 million USD to the U.S. government.[72]

Legislative Updates and Agency Guidance

State-Level Anti-Corruption Law.  In late 2017, the state of Rio de Janeiro passed an anti-corruption law requiring companies contracting with the state to have compliance programs.[73]  The law applies to companies and individuals, including foreign companies with "headquarters, subsidiaries, or representation in Brazil."[74]  While the Clean Company Act takes a company's compliance program into consideration in the application of sanctions, Rio de Janeiro's law goes one step further and requires companies to have programs in place before contracting with the state.[75] Ten Measures Against Corruption.  An initiative from Brazil's Ministério Público Federal to strengthen anti-corruption laws has yet to pass both houses of Brazil's legislative branch.  The initiative—called the "Ten Measures Against Corruption"—was first announced by the MPF in 2015.[76]  The proposal was introduced to Congress as a public initiative in 2016 after it received more than 1.7 million signatures of support from the public.[77]  The measures propose changes in corruption laws and criminal proceedings that would make the judiciary and prosecutor's office more transparent, criminalize unjust enrichment of civil servants, hold political parties liable for accepting undeclared donations, and increase penalties for corrupt acts.[78]  Consideration of the proposal was halted in the Senate in 2017 after public outrage in response to the lower Congress's addition of a provision that would impose harsh penalties on the judiciary and federal prosecutors for "abuse of authority."[79]  Operation Car Wash prosecutor Deltan Dallagnol claimed that the House's amendments "favored" white collar crimes and undermined the proposal's purpose.[80] Ministério Público Federal Leniency Agreement Guidance.  In August 2017, the Ministério Público Federal issued guidance for prosecutors negotiating leniency agreements.[81]  The guidance provides insights into the process Brazil's prosecutors use for negotiating such agreements and the expectations for collaborators.  One section of the guidance, for example, states that negotiations should be conducted by "more than one member of the MPF" and preferably by a criminal and administrative prosecutor for the agency.[82]  The guidance also notes the possibility that the negotiations could take place together with other Brazilian authorities, including the CGU [the chief regulator of the Clean Company Act], the Federal Attorney General's Office ("AGU"), the chief anti-trust regulator, and the TCU.[83]  The guidance also notably details obligations of collaborators in leniency agreements, including:
  • Communicating relevant information and proof (time frames, locations, etc.);
  • Ceasing illicit conduct;
  • Implementing a compliance program and submitting to external audit, at the company's expense;
  • Collaborating fully with the investigations during the life of the agreement and always acting with honesty, loyalty, and good faith, without reservation;
  • Paying applicable fines and damages; and
  • Declaring that all information supplied is correct and accurate, under the penalty of rescission of the leniency agreement.[84]

3.    Argentina

Notable Enforcement Actions and Investigations

A.    Investigation into President Mauricio Macri

Beginning in 2016 and continuing throughout 2017, federal prosecutors in Argentina launched investigations concerning current President Mauricio Macri.[85]  While Macri was elected on promises to combat corruption in Argentina,[86] his family's extensive business holdings have been scrutinized by Argentine authorities in connection with various influence trafficking and money laundering probes.[87]  An investigation opened in April 2017, for example, focuses on the grant of airline routes to a company connected to Macri's father.[88]  Argentine prosecutors are also probing allegations that a government official received payments from construction conglomerate Odebrecht in connection with renewing a public contract.[89]  At the time of the alleged payments, Odebrecht was a participant in a consortium with a company connected to Macri's cousin.[90]

B.    Investigation into Former President Cristina Fernández de Kirchner

In April 2017, former President Cristina Fernández de Kirchner was indicted in connection with allegations that she led a scheme to launder funds misappropriated from public coffers through a family-owned business.[91]  The charges represent the second indictment filed against Kirchner since she left office more than two years ago.[92]  In December 2016, charges were brought against Kirchner alleging that she led a criminal organization that attempted to illegally benefit its members by awarding public contracts to construction company Austral Construcciones.[93]  In a separate investigation, a judge ordered Kirchner's arrest in connection with allegations that she covered up possible Iranian involvement in the 1994 bombing of a Jewish community center in Buenos Aires in exchange for a potentially lucrative trade deal.[94]  Other former high-level employees in Kirchner's government have been arrested for unjust enrichment, including Vice President Amado Boudou and former planning minister Julio de Vido.[95]

Legislative Update

In November 2017, Argentina's Congress passed new legislation imposing criminal liability on corporations for bribery (national and transnational), influence peddling, unjust enrichment of public officials, falsifying balance sheets and reports, and other designated offenses.[96]  The bill, called the Law on Corporate Criminal Liability, applies to both Argentine and multinational companies domiciled in the country.[97]  The law went into effect on March 1, 2018.[98] Under the bill, legal entities can be held liable for bribery and other misconduct carried out directly or indirectly, with the company's intervention, or in the company's name, interest, or benefit.[99]  Legal entities can also be held liable if the company ratifies the initially unauthorized actions of a third party.[100]  The bill states that legal entities are not held liable, however, if the physical person who committed the misconduct acted "for his exclusive benefit, and without providing any advantage" for the company.[101]  The bill also imposes successor liability on parent companies in mergers, acquisitions, and other corporate restructurings.[102]  The bill applies to transnational bribery for acts committed by Argentine citizens and entities that are domiciled in Argentina.[103] The bill imposes monetary and non-monetary sanctions, including:
  • Monetary fines from two to five times the benefit that was (or could have been) obtained by the company,[104]
  • Complete or partial suspension of activities for up to ten years,[105]
  • Suspension for up to ten years from participating in public bids, contracts, or any other activity linked to the state,[106] and
  • Dissolution and liquidation of the corporate person when the entity was created solely for the purposes of committing misconduct, or when misconduct constituted the principal activities of the entity.[107]
Legal entities can be exempted from criminal liability where the company (1) self-reported misconduct detected through its own efforts and internal investigation, (2) implemented an adequate internal control and compliance system before the misconduct occurred, and (3) returned undue benefits obtained through the misconduct.[108]  The bill also contains provisions allowing for Argentina's public prosecutor's office, the Ministério Público Fiscal, to enter into collaboration agreements with legal entities.[109]  The agreements require legal entities to provide information regarding the misconduct, pay the equivalent of half the minimum monetary fine imposed under the law, and comply with other conditions of the agreement (including, but not limited to, implementing a compliance program).[110] Minimal requirements for compliance programs consistent with the bill include:
  • A code of ethics or conduct, or the existence of integrity policies and procedures applicable to all directors, administrators, and employees that prevent the commission of the crimes contemplated by the law,[111]
  • Specific rules and procedures to prevent wrongdoing in the context of tenders and bidding processes in the execution of administrative contracts, or in any other interaction with the public sector,[112] and
  • Periodic trainings on the compliance program for directors, administrators, and employees.[113]
The law also notes that a compliance program may include additional elements, including, among others:
  • Periodic risk assessments,[114]
  • Visible and unequivocal support of the program from upper management,[115]
  • Misconduct-reporting channels that are open to third parties and adequately defined,[116]
  • Anti-retaliation policies,[117]
  • Internal investigation systems,[118]
  • Due diligence processes for M&A transactions,[119]
  • Monitoring and evaluation of the effectiveness of the compliance program,[120] and
  • Designation of an employee responsible for the coordination and implementation of the program.[121]
The compliance program components listed in the law are notably similar to elements of effective compliance programs delineated by DOJ, the SEC, and Mexico's General Law of Administrative Responsibility.[122]

4.    Colombia

Notable Enforcement Actions and Investigations

A.    Odebrecht Fallout

According to a December 2016 deferred prosecution agreement with DOJ, Odebrecht made more than $11 million USD in corrupt payments to government officials in Colombia to secure public works contracts.[123]  In the wake of this settlement with U.S. authorities and Brazil's multi-year investigation into Odebrecht's dealings, Colombian prosecutors have announced inquiries into congressional involvement in the allegations and have arrested former Colombian senator Otto Bula for allegedly taking $4.6 million USD in bribes from the company.[124]  Odebrecht allegedly paid Bula to ensure that a contract for the construction of the Ocaña-Gamarra highway included higher-priced tolls that would benefit the company.[125]  Odebrecht also allegedly made $6.5 million USD in payments to former Vice Minister of Transportation Gabriel García Morales in exchange for a contract to construct a section of the Ruta del Sol highway.[126]

B.    Reficar Oil Refinery

In 2017, Colombian authorities brought corruption charges against executives from an American engineering firm, Chicago Bridge & Iron Company ("CB&I"), in connection with the Refineria de Cartagena ("Reficar") oil refinery.[127]  The Reficar oil refinery is a subsidiary of Colombia's state-owned oil company, Ecopetrol.  Colombian authorities charged CB&I and Reficar executives with various corruption charges, including unjust enrichment, misappropriation of funds, and embezzlement.[128]  According to the Colombian authorities, Reficar executives directed contracts to CB&I without abiding by legal requirements for public bidding.[129]  The Colombian authorities also claimed to have discovered irregularities with payments CB&I received in connection with Reficar contracts, including payments for work that was not performed, reimbursements for extravagant expenses unrelated to the refinery project, and double billing.[130]

C.    Conviction of Former Anti-Corruption Chief Luis Gustavo Moreno

On June 27, 2017, former anti-corruption chief Luis Gustavo Moreno was arrested in his office by the CTI (the Technical Investigation Team, a division of the Colombian Attorney General).  They charged him with soliciting bribes in return for interfering with anti-corruption investigations into Alejandro Lyons Muskus, ex-governor of Córdoba, with the possibility of ending such investigations.  After his arrest, Moreno turned into a key collaborator with various officials, shedding light on a massive corruption scandal in the judiciary and congressional branch.  According to Moreno, the scandal involved state politicians such as Musa Besaile Fayad and Bernardo "Ñoño" Elías, while also accusing judges such as Gustavo Malo Fernández, Francisco José Ricaurte, and Leónidas Bustos of accepting bribes in order to corrupt judicial proceedings.[131]  President Juan Manuel Santos signed extradition orders for Moreno and extradited him to Florida, where DOJ officials charged him with conspiracy to launder money with the intent to promote foreign bribery.[132]

Legislative Update

In 2017, Colombian President Juan Manuel Santos announced a series of measures to address corruption issues in the country.[133]  The announcement followed Colombia's 2016 passage of its first foreign bribery statute, the Transnational Corruption Act ("TCA").[134]  The TCA notably has extraterritorial effect and holds legal entities administratively liable for improper payments to foreign government officials made by the entity's employees, officers, directors, subsidiaries, contractors, or associates.[135]  The new anti-corruption measures announced by President Santos, among others, include passing new laws that would provide labor protections and economic incentives for whistleblowers, require that companies disclose information regarding "the persons who in reality profit from a business or company," and eliminate the use of house arrest for corruption cases.[136]  The President also proposed creating a group of judges who specialize in anti-corruption cases.[137]  Other corruption reforms considered by Colombia's Congress in 2017 include requiring lobbyists to disclose meetings with public officials and the creation of a registry of beneficiaries of public contracts.[138]

Transnational Cooperation

In 2017, Colombia's Superintendence of Corporations and the Peruvian Ministry entered into a Memorandum of Understanding ("MOU") to prosecute international corruption.[139]  The goal of the MOU is to help investigate corruption in Peru and Colombia by focusing on a bilateral exchange of evidence between the two countries.[140]  Colombia signed a similar agreement with Spain in 2017.[141]  These new efforts are meant to assist partnering states in overcoming the difficulties of cross-border investigations, including the need to acquire evidence in foreign territories.

5.    Peru

Notable Enforcement Actions and Investigations

The Odebrecht scandal has significantly impacted the political and anti-corruption landscape in Peru.  In its settlement with Odebrecht, DOJ disclosed that Odebrecht executives admitted to funneling around $29 million USD in bribes to Peruvian government officials between 2004 and 2015.[142]  Government officials announced that Odebrecht and other companies involved in corruption would no longer be able to bid on public work contracts.[143]  This marked the end of Odebrecht's four-decade run as a successful bidder on public work projects in Peru.[144]  The government will now decide on a case-by-case basis what to do with the remaining contracts awarded to Odebrecht.[145] Three of Peru's recent former presidents have been arrested and/or accused of crimes related to corruption, all with some alleged connection to Odebrecht.[146]  In July 2017, a Peruvian judge ordered the arrest of former President Ollanta Humala and his wife on charges of money laundering and conspiracy related to the alleged receipt of a $3 million USD bribe from Odebrecht.[147]  Humala, who has continued to maintain his innocence, became the first former head of state detained in connection with the Odebrecht scandal.[148]  Prosecutors are also investigating former President Alan Garcia, who allegedly facilitated irregular bidding on the subway in Lima.[149] Another former president, Alejandro Toledo, was ordered arrested by a Peruvian judge in February, pursuant to accusations that he had received $20 million USD in bribes from Odebrecht in connection with bidding on the Interoceanic Highway between Brazil and Peru.  Toledo has remained in the United States and denied any wrongdoing.[150]  A formal extradition request to the United States for Toledo to return to Peru and face charges for the alleged bribe is near approval on the Peruvian side.[151] Even Peru's current president, Pedro Pablo Kuczynski, has been unable to evade implication in the ever-expanding Odebrecht probe.  Earlier in 2017, he had to testify as a witness in the same investigation implicating former President Toledo in the alleged irregular bidding process to build the Interoceanic Highway.[152]  In November 2017, former Odebrecht CEO Marcelo Odebrecht told Brazilian prosecutors that Odebrecht hired Kuczynski as a consultant after he had opposed highway contracts granted to the company.[153]  Kuczynski denied the allegations, but subsequently documents showed Kuczynski may have received $782,000 in payments from Odebrecht through his investment banking firm, Westfield Capital.[154]  Kuczynski narrowly survived an impeachment vote based on the corruption allegations in late December 2017.[155]  Recent additional testimony from an Odebrecht official purporting to confirm impropriety in Kuczynski's relationship with Odebrecht has renewed calls for Kuczynski to step down or be impeached.[156] On a regional and local level in Peru, several governors have been under investigation or accused of corruption.[157]  Remarkably, a May 2014 study by Peru's office of the anti-corruption solicitor reported that a significant majority of mayors in office between 2011 and 2014 in Peru had been investigated for criminal activity.[158]

Legislative Update

The most significant development in anti-corruption legislation in Peru over the last year was Legislative Decree No. 1352, enacted on January 6, 2017.  This decree modifies Law No. 30424 (Law Regulating Administrative Liability of Legal Entities for the Commission of Active Transnational Bribery),[159] which was enacted in 2016 to declare that legal entities, including corporations, would be autonomously and administratively liable for active transnational bribery when it was committed in their name or for them and on their behalf.[160]  Decree No. 1352 extended the administrative and autonomous liability of legal entities to include those guilty of active bribery of public officials.[161]  The liability provided for in Decree No. 1352 is termed "autonomous" because a natural person does not have to be found liable first; the Decree's charges now create independent liability, and an independent entity like a corporation can be charged separately.[162]  The law provides for autonomous liability for certain crimes of bribery and money laundering.[163] Parent companies are not liable for penalties under the autonomous liability provisions of Decree No. 1352 unless the employees who engaged in corruption or money laundering did so with specific consent or authorization from the parent company.[164]  Additionally, companies that acquire entities found guilty of corruption under the autonomous liability provision may not be separately penalized if the acquiring company used proper due diligence, defined as taking reasonable actions to verify that no autonomous liability crimes had been committed.[165]  Finally, entities can avoid autonomous liability by implementing a sufficient criminal law compliance program designed to prevent such crimes of corruption from being committed on behalf of the company.[166] Elements of a properly designed program include: an autonomous person in charge of the compliance program, proper implementation of complaint procedures, continuous monitoring of the program, and training for those involved.[167]  The Peruvian securities regulator had promised additional guidance before January 1, 2018—when the Decree took effect—but, as of the date of this publication, no such guidance has been issued.[168] The Peruvian government has also modified the procurement laws via Decree 1341 to ban any company with representatives who have been convicted of corruption from securing government contracts.[169]  The ban applies even if the crimes are admitted as part of a plea bargain agreement for a reduced sentence.[170] Peru has also enacted harsher penalties for public officials found guilty of corruption and prohibitions on such officials from being able to work in the public sector post-conviction.  Legislative Decree No. 1243 (the "civil death" law) was enacted in late 2016 to establish harsher sentences for corruption-related offenses and to increase the "civil disqualification" period to five to twenty years for corruption crimes like extortion, simple and aggravated collusion, embezzlement, and bribery.[171]  That said, this disqualification only applies to crimes committed as part of a "criminal organization," and because of the practicalities involved in these types of crimes, it is unlikely that many officials will be found to have been part of a "criminal organization" and thus barred from public service.[172] Legislative Decree No. 1295 was also enacted on December 30, 2016 with provisions to improve government integrity.[173]  The decree created the National Registry of Sanctions against Civil Servants (Registro Nacional de Sanciones contra Servidores Civiles).[174] This online registry will be updated monthly by the National Authority of Civil Service (Autoridad Nacional del Servicio Civil) and will consolidate all the information relevant to disciplinary actions and/or sanctions against public officials (including corruption charges).[175]  Anyone listed in the registry is prohibited from government employment for the duration of their registry.[176]
[1] This article is intended to review key developments in the five enumerated countries.  Changes to the compliance environment continue throughout Central and South America, though they are not covered in this particular update. [2] Petróleos Mexicanos – Pemex, Report of Foreign Private Issuer (Form 6-K) (Nov. 11, 2017), at 8. [3] Petróleos Mexicanos – Pemex, Report of Foreign Private Issuer (Form 6-K) (Sept. 29, 2017), at 21. [4] See Plea Agreement, Attach. B ¶¶ 59-60, United States v. Odebrecht S.A., Cr. No. 16-643 (RJD) (E.D.N.Y. Dec. 21, 2016). [5] See Secretaría de la Función Pública, Abre SFP nuevos procedimientos administrativos en contra de filial de Odebrecht (Sep. 11, 2017), https://www.gob.mx/sfp/articulos/abre-sfp-nuevos-procedimientos-administrativos-en-contra-de-filial-de-odebrecht-126170?idiom=es. [6] Azam Ahmed and J. Jesus Esquivel, Mexico Graft Inquiry Deepens with Arrest of a Presidential Ally, N.Y. Times, Dec. 20, 2017, https://www.nytimes.com/2017/12/20/world/americas/mexico-corruption-pri.html. [7] Id.; Detienen a extesorero del PRI por presunto desvío de recursos en 2016, El Financiero, Dec. 20, 2017, http://www.elfinanciero.com.mx/nacional/detienen-a-extesorero-del-pri-por-presunto-desvio-de-recursos-en-2016.html. [8] Ley General de Responsabilidades Administrativas, Artículos 2, 52, 66, 70 (July 18, 2016) (Mex.) [hereinafter "GLAR"]. [9] GLAR at Artículos 49, 51. [10] Id. at Artículo 49. [11] Id. at Artículos 51-64. [12] Id. at Artículos 3, 4, 65. [13] Bribery includes promising, offering, or giving any benefit, whether it be through money, valuables, property, services well below market value, donations, or any other benefit, to a public servant or their spouse in return for the public servant performing or refraining from performing any act related to their duties, or using their influence in their position, for the purpose of obtaining or maintaining a benefit or advantage, irrespective of the benefit actually being achieved.  Id. at Artículos 52, 66. [14] Id. at Artículo 67. [15] Id. at Artículo 68. [16] Id. at Artículo 69. [17] Id. at Artículo 71. [18] Id. at Artículo 72. [19] Id. at Artículo 70. [20] Id. [21] Under Article 81 of the GLAR, if no benefit is obtained through the corrupt act, the financial penalty is calculated by multiplying a statutorily defined value by the daily tenor of a Mexican government economic reference rate called the Unidad de Medida y Actualización ("UMA").  While the UMA is a variable rate that changes over time, the statutory multiple is static and defined by the GLAR.  For physical persons—if no benefit was obtained—the penalty can be up to 150,000 times the UMA (approximately $597,000 USD as of May 2017).  GLAR, Artículo 81. [22] Id. [23] Id. [24] Id. [25] Id. [26] Id. [27] Id. at Artículo 25. [28] The seven required elements of the integrity program are delineated in the statute and discussed more fully in Gibson Dunn's review of the GLAR, found at https://www.gibsondunn.com/mexicos-new-general-law-of-administrative-responsibility-targets-corrupt-activities-by-corporate-entities/. [29] GLAR at Artículos 88-89. [30] Id. at Artículo 81. [31] Id. at Artículos 88-89. [32] Id. at Artículo 89. [33]Id. [34]Id. [35] Ministério Público Federal, MPF recebe prêmio internacional por trabalho no combate à corrupção (Nov. 6, 2017), http://www.mpf.mp.br/rj/sala-de-imprensa/noticias-rj/mpf-recebe-premio-internacional-pelo-combate-a-corrupcao. [36] Press Release, Transparency Int'l Secretariat, Brazil's Carwash Task Force Wins Transparency Int'l Anti-Corruption Award (Dec. 6, 2016). [37] See generally FCPA Tracker, https://fcpatracker.com/. [38] See Felipe Gutierrez, Moro se diz 'cansado' e que trabalho da Lav Jato em Curitiba esta no fim, Folha de Sao Paulo, Aug. 15, 2017, http://www1.folha.uol.com.br/poder/2017/10/1923633-moro-diz-que-trabalho-da-lava-jato-em-curitiba-esta-acabando.shtml. [39] Id. [40] See Ministério Público Federal, A Lava Jato em numeros – STF (Jan. 12, 2018), http://www.mpf.mp.br/para-o-cidadao/caso-lava-jato/atuacao-no-stj-e-no-stf/resultados-stf/a-lava-jato-em-numeros-stf. [41] Entenda a Operação Zelotes da Polícia Federal, Folha de São Paulo, Apr. 1, 2015, http://www1.folha.uol.com.br/mercado/2015/04/1611246-entenda-a-operacao-zelotes-da-policia-federal.shtml. [42] Id. [43] Mateus Rodrigues, MPF denuncia executivos da Gerdau na Zelotes por corrupcão e lavagem de dinheiro, Oglobo, Aug. 24, 2017, https://g1.globo.com/distrito-federal/noticia/mpf-denuncia-executivos-da-gerdau-na-zelotes-por-corrupcao-e-lavagem-de-dinheiro.ghtml; MPF denuncia Lula e Gilberto Carvalho por corrupcao passive na Operacoes Zelotes, Oglobo, Sept. 11, 2017, https://g1.globo.com/politica/noticia/mpf-denuncia-lula-por-corrupcao-passiva-na-operacao-zelotes.ghtml. [44] MPF denuncia Lula e Gilberto Carvalho por corrupcao passive na Operacoes Zelotes, supra note 43. [45] Entenda a Operação Zelotes da Polícia Federal, supra note 41. [46] Estelita H. Carazzai, Bela Megale, & Camila Mattoso, Operação contra frigoríficos prende 37 e descobre até carne podre à venda, Folha de S. Paulo, Mar. 17, 2017, http://www1.folha.uol.com.br/mercado/2017/03/1867309-pf-faz-operacao-contra-frigorificos-e-cumpre-quase-40-prisoes.shtml. [47] Id. [48] Id. [49] Operação Bullish investiga fraudes em empréstimos no BNDES, Agência de Notícias de Polícia Federal, May 12, 2017, http://www.pf.gov.br/agencia/noticias/2017/05/operacao-bullish-investiga-fraudes-em-emprestimos-no-bndes; Bela Megale, Camila Mattoso, & Raquel Landim, Operação policial põe sob suspeita apoio do BNDES à expansão da JBS, Folha de S. Paulo, May 12, 2017, http://www1.folha.uol.com.br/mercado/2017/05/1883367-pf-deflagra-operacao-que-investiga-fraudes-em-emprestimos-no-bndes.shtml. [50] Megale et al., supra note 49. [51] Id. [52] Graziele Frederico and Gabriela Lapa, Grupo de acusados na 'máfia de próteses' do DF fecha acordo de delação premiada, Oglobo, Feb. 9, 2017, http://g1.globo.com/distrito-federal/noticia/grupo-de-acusados-na-mafia-das-proteses-do-df-fecha-acordo-de-delacao-premiada.ghtml. [53] Id. [54] Ministério da Transparência e Controladoria-Geral da União, CGU e AGU assinam acordo de leniência com UTC Engenharia, July 10, 2017, http://www.cgu.gov.br/noticias/2017/07/cgu-e-agu-assinam-acordo-de-leniencia-com-o-utc-engenharia. [55] Id. [56] Id. [57] Id. [58] Id. [59] Press Release, U.S. Dep't of Justice, Rolls-Royce plc Agrees to Pay $170 Million Criminal Penalty to Resolve Foreign Corrupt Practices Act Case (Jan. 17, 2017), https://www.justice.gov/opa/pr/rolls-royce-plc-agrees-pay-170-million-criminal-penalty-resolve-foreign-corrupt-practices-act. [60] Deferred Prosecution Agreement, Attach. A ¶ 20, United States v. Rolls-Royce plc, No. 2:16-CR-00247-EAS (S.D. Ohio. Dec. 20, 2016). [61] Id. [62] Press Release, U.S. Dep't of Justice, supra note 59. [63] Press Release, U.S. Dep't of Justice, SBM Offshore N.V. and United States-Based Subsidiary Resolve Foreign Corrupt Practices Act Case Involving Bribes in Five Countries (Nov. 29, 2017), https://www.justice.gov/opa/pr/sbm-offshore-nv-and-united-states-based-subsidiary-resolve-foreign-corrupt-practices-act-case. [64] Deferred Prosecution Agreement, Attach. A ¶¶ 27, 35, United States v. SBM Offshore N.V., No. 17-686 (S.D. Tex. Nov. 29, 2017). [65] Press Release, U.S. Dep't of Justice, supra note 63. [66] Id. [67] Id. [68] Press Release, U.S. Dep't of Justice, Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in History (Dec. 21, 2016), https://www.justice.gov/opa/pr/odebrecht-and-braskem-plead-guilty-and-agree-pay-least-35-billion-global-penalties-resolve. [69] Plea Agreement ¶ 21(b), United States v. Odebrecht, No. 16-643 (RJD) (Dec. 21, 2016). [70] Id. at ¶ 21(c). [71] Sentencing Memorandum at 4, United States v. Odebrecht S.A., No. 13-643 (RJD) (Apr. 11, 2017). [72] Id. [73] Lei No. 7753 de 17 de outubro de 2017, do Rio de Janeiro. [74] Id. at Artigo 1. [75] Id.; Lei No. 12.846 de 2013, at Artigo 7. [76] Fausto Macedo, Quais são e o Que propõem as '10 Medidas contra a corrupção' do Ministério Público, Estadão, Sept. 16, 2015, http://politica.estadao.com.br/blogs/fausto-macedo/quais-sao-e-o-que-propoem-as-10-medidas-contra-a-corrupcao-do-ministerio-publico/. [77] Marcello Larcher, CCJ valida assinaturas do projeto das dez medidas contra a corrupção, Agência Câmara Notícias, Mar. 28, 2017, http://www2.camara.leg.br/camaranoticias/noticias/POLITICA/527029-CCJ-VALIDA-ASSINATURAS-DO-PROJETO-DAS-DEZ-MEDIDAS-CONTRA-A-CORRUPCAO.html. [78] Renan Ramalho, MP apresenta dez propostas para reforçar combate à corrupção no país, Oglobo, Mar. 20, 2015, http://g1.globo.com/politica/noticia/2015/03/mp-apresenta-dez-propostas-para-reforcar-combate-corrupcao-no-pais.html. [79] Felipe Gelani, Lei de abuso de autoridade divide opinões entre juristas, Jornal do Brasil, Dec. 4, 2016, http://m.jb.com.br/pais/noticias/2016/12/04/lei-de-abuso-de-autoridade-divide-opinioes-entre-juristas/; Projeto com medidas contra a corrupção aguarda relator na CCJ, Senado Notícias (Apr. 17, 2017), https://www12.senado.leg.br/noticias/materias/2017/04/17/projeto-com-medidas-contra-a-corrupcao-aguarda-relator-na-ccj. [80] Ricardo Brandt, 'Congresso destruiu' as 10 Medidas contra Corrupção, diz procurador da Lava Jato, Estadão, Dec. 3, 2016, http://politica.estadao.com.br/blogs/fausto-macedo/congresso-destruiu-as-10-medidas-contra-corrupcao-diz-procurador-da-lava-jato/. [81] Ministério Público Federal, Orientation No. 07/2017 – Leniency Agreements (Aug. 24, 2017), http://www.mpf.mp.br/pgr/documentos/ORIENTAO7_2017.pdf. [82] Id. [83] Id. [84] Id. [85] Almudena Calatrava, Argentine Clean-up President Macri Finds Scandals of His Own, U.S. News, Mar. 3, 2017 https://www.usnews.com/news/world/articles/2017-03-03/argentine-clean-up-president-macri-finds-scandals-of-his-own; Abren investigación contra presidente de Argentina por presunta asociación ilícita y tráfico de influencias, CNN Español, Mar. 1, 2017, http://cnnespanol.cnn.com/2017/03/01/abren-investigacion-al-presidente-de-argentina-mauricio-macri-por-entrega-de-rutas-aereas-a-avianca/. [86] Lucia de Dominicis, 10 promesas incumplidas de Macri en sus 2 años de gobierno, La Primera Piedra, Dec. 10, 2017, http://www.laprimerapiedra.com.ar/2017/12/10-promesas-incumplidas-de-macri/. [87] Calatrava, supra note 85; Fiscal argentino abre investigación a Mauricio Macri por firmas 'offshore,' La Prensa, Apr. 7, 2016, https://www.prensa.com/mundo/Fiscal-argentino-investigacion-Mauricio-Macri_0_4455304547.html. [88] Abren investigación contra presidente de Argentina por presunta asociación ilícita y tráfico de influencias, supra note 85. [89] Hugo Alconada Mon, Un Operador de Odebrecht le giro US$ 600.00 al jefe de inteligencia argentine, La Nacion, Jan. 11, 2017, http://www.lanacion.com.ar/1974791-un-operador-de-odebrecht-le-giro-us-600000-al-jefe-de-inteligencia-argentino; AFP, Argentina: fiscal abre causa contra jefe de espias por giro de Odebrecht, La Prensa, Jan. 24, 2017, https://www.prensa.com/mundo/Argentina-fiscal-causa-espias-Odebrecht_0_4674282545.html. [90] Mon, supra note 89. [91] Frederico Rivas Molina, Cristina Fernández de Kirchner suma otro procesamiento por corrupción, El Pais, Apr. 4, 2017, https://elpais.com/internacional/2017/04/04/argentina/1491322535_840466.html. [92] Id. [93] Id. [94] Max Radwin and Anthony Faiola, Argentine Ex-president Cristina Fernández de Kirchner Charged with Treason, Wash. Post, Dec. 7, 2017, https://www.washingtonpost.com/world/the_americas/argentine-ex-president-cristina-fernandez-charged-with-treason/2017/12/07/e3e326e0-db80-11e7-a241-0848315642d0_story.html?utm_term=.37df90a6bf06. [95] Argentina Former Vice-President Amado Boudou Arrested, BBC News, Nov. 3, 2017, http://www.bbc.com/news/world-latin-america-41867239. [96] Argentina Congress Passes Law to Fight Corporate Corruption, Reuters, Nov. 8 2017, https://www.reuters.com/article/us-argentina-corruption/argentina-congress-passes-law-to-fight-corporate-corruption-idUSKBN1D83AX; La Ley de Responsabilidad Penal de las Personas Jurídicas, Law No. 27401 (Nov. 8, 2017), Artículo 1 (Arg.) [hereinafter Ley de Responsabilidad Penal]. [97] La Ley de Responsabilidad Penal de las Personas Jurídicas, at Artículo 1, supra note 96. [98] Paula Urien, Cómo reaccionan las compañías ante la ley penal empresaria, La Nacion, March 4, 2018, https://www.lanacion.com.ar/2113848-como-reaccionan-las-companias-ante-la-ley-penal-empresaria. [99]  Ley de Responsibilidad Penal, at Artículo 2, supra note 97. [100] Id. at Artículo 1. [101] Id. at Artículo 2. [102] Id. at Artículo 3. [103] Id. at Artículo 29. [104] Id. at Artículo 7. [105] Id. [106] Id. [107] Id. [108] Id. at Artículo 9. [109] Id. at Artículo 16. [110] Id. at Artículos 16, 18. [111] Id. at Artículo 23. [112] Id. [113] Id. [114] Id. [115] Id. [116] Id. [117] Id. [118] Id. [119] Id. [120] Id. [121] Id. [122] DOJ and SEC, A Resource Guide to the U.S. Foreign Corrupt Practices Act, at 57 (Nov. 14, 2012); GLAR at  Artículo 25. [123] See Plea Agreement, Attach. B ¶ 51, United States v. Odebrecht S.A., Cr. No. 13-643 (RJD) (E.D.N.Y. Dec. 21, 2016). [124] ¿Pueden las leyes acabar con la corrupción?, Política, July 29, 2017, http://www.semana.com/nacion/articulo/corrupcion-10-proyectos-de-ley-se-tramitan-en-el-congreso-sirven/534225; Julia Symmes Cobb & Guillermo Parra-Bernal, Colombia Arrests Ex-Senator Linked to Odebrecht Graft Scandal, Reuters, Jan. 15, 2017, https://www.reuters.com/article/brazil-corruption-odebrecht-colombia/colombia-arrests-ex-senator-linked-to-odebrecht-graft-scandal-idUSL1N1F5073. [125] Cobb & Parra-Bernal, supra note 124. [126] Jose Maria Irujo & Joaquin Girl, La policía investiga la conexión Colombia-Miami en los pagos al Exviceministro García Morales, El Pais, Nov. 9, 2017, https://elpais.com/internacional/2017/11/06/actualidad/1509965659_671036.html. [127] Fiscalía General de la Nación, Imputados empresarios extranjeros y colombianos por corrupción en la construcción de Reficar (July 26, 2017), https://www.fiscalia.gov.co/colombia/bolsillos-de-cristal/imputados-empresarios-extranjeros-y-colombianos-por-corrupcion-en-la-construccion-de-reficar/. [128] Id. [129] Id. [130] Fiscalía General de la Nación, Refineria de Cartagena (2017), https://www.fiscalia.gov.co/colombia/wp-content/uploads/Presentacion-REFICAR270417.pdf. Santos ratificó extradición del exfiscal Luis Gustavo Moreno, RCN Radio, Mar. 12, 2018, https://www.rcnradio.com/judicial/santos-ratifico-extradicion-del-exfiscal-luis-gustavo-moreno. [132] Id. [133] Presidencia de la República, Gobierno presenta paquete de iniciativas para combatir la corrupción (Aug. 18, 2017), http://es.presidencia.gov.co/noticia/170818-Gobierno-presenta-paquete-de-iniciativas-para-combatir-la-corrupcion. [134] Ley. 1778 de 2016 (Feb. 2, 2016) Diario Oficial 49.774 (Colo). [135] Id. at Artículo 2. [136] Presidente anuncia nuevas medidas para seguir enfrentando el desafío de la corrupción y a los corruptos, El Observatario, Apr. 19, 2017, http://www.anticorrupcion.gov.co/Paginas/Presidente-anuncia-nuevas-medidas-para-seguir-enfrentando-el-desafio-de-la-corrupcion-y-a-los-corruptos.aspx. [137] Colombia tendrá jueces especializados en casos de corrupción, El Observatario, Dec. 7, 2017,     http://www.anticorrupcion.gov.co/Paginas/Colombia-tendra-jueces-especializados-en-casos-de-corrupcion.aspx. [138] Leyes en Contra de la Corrupción, la Apuesta del Gobierno Nacional, Actualicese, July 13, 2017, http://actualicese.com/actualidad/2017/07/13/leyes-en-contra-de-la-corrupcion-la-apuesta-del-gobierno-nacional/. [139] Colombia y Peru contra soborno transnacional, El Nuevo Siglo, Sep. 23, 2017, http://www.elnuevosiglo.com.co/articulos/09-2017-colombia-y-peru-combatiran-soborno-transnacional. [140] Id. [141] See Juan Cruz Peña, Colombia investiga a tres empresas españolas por sobornos e irregularidades, El Confidencial, May 17, 2017, https://www.elconfidencial.com/empresas/2017-05-17/colombia-investiga-empresas-espanolas-sobornos-desfalco_1379311/. [142] United States v. Odebrecht S.A., Docket No. 16-CR-643 (RJD) (E.D.N.Y. 2016). [143] Odebrecht Banned from Signing Contracts with Peru State, Andina, Jan. 9, 2017, http://www.andina.com.pe/Ingles/noticia-odebrecht-banned-from-signing-contracts-with-peru-state-648542.aspx. [144] Mitra Taj, Peru to Bar Odebrecht from Public Bids with New Anti-graft Rules, Reuters, Dec. 28, 2016,  http://www.reuters.com/article/peru-corruption-odebrecht-idUSL1N1EO00K. [145] Id. [146] Lucas Perelló, Pablo Kuczynski Loses Another Battle to the Fujimorista Opposition, Global Americans, Sept. 28, 2017, https://theglobalamericans.org/2017/09/perus-pedro-pablo-kuczynski-loses-another-battle-fujimorista-opposition/. [147] Simeon Tegel, Latin America's Mega-Corruption Scandal Just Claimed its Two Biggest Names, Wash. Post, July 15, 2017, https://www.washingtonpost.com/news/worldviews/wp/2017/07/15/latin-americas-mega-corruption-scandal-just-claimed-its-two-biggest-names/?utm_term=.6c05e8a6bb8c; Jimena De La Quintana, Ordenan prisión preventive para Ollanta Humala y Nadine Heredia, CNN en Espanol, July 13, 2017, http://cnnespanol.cnn.com/2017/07/13/ordenan-prision-para-ollanta-humala-y-nadine-heredia/. [148] Id. [149] ¿Cuál es la relación de Alan García con el caso Odebrecht y Lava Jato?, Radio Programas del Perú, Aug. 7, 2017, http://rpp.pe/politica/judiciales/la-relacion-de-alan-garcia-con-los-casos-odebrecht-y-lava-jato-noticia-1049631. [150] Ryan Dube, Judge Orders Arrest of Former Peruvian President Alejandro Toledo in Odebrecht Bribery Case, Wall Street J., Feb. 9, 2017, https://www.wsj.com/articles/judge-orders-arrest-of-former-peruvian-president-alejandro-toledo-in-odebrecht-bribery-case-1486698137; U.S. State Department Office of Investment Affairs, Peru Country Commercial Guide - Investment Climate Statement (Sept. 20, 2017), https://www.export.gov/article?id=Peru-Corruption. [151] Peru court approves Toledo extradition request, Yahoo News, Mar. 13, 2018, https://www.yahoo.com/news/peru-court-approves-toledo-extradition-request-164803106.html. [152] Lucas Perelló, Pablo Kuczynski Loses Another Battle to the Fujimorista Opposition, Global Americans, Sept. 28, 2017, https://theglobalamericans.org/2017/09/perus-pedro-pablo-kuczynski-loses-another-battle-fujimorista-opposition/; PPK declarará el Viernes por Caso Odebrecht ante fiscalía, El Comercio, Mar. 29, 2017, https://elcomercio.pe/politica/justicia/ppk-declarara-viernes-caso-odebrecht-fiscalia-420928. [153] Ex-Odebrecht CEO Says Hired Peru President as Consultant – Reports, Reuters, Nov. 14, 2017, https://www.reuters.com/article/peru-politics/ex-odebrecht-ceo-says-hired-peru-president-as-consultant-reports-idUSL1N1NK1H4. [154] Peru: President Kuczynski Denies Odebrecht Bribe Allegations, BBC News, Nov. 16, 2017, http://www.bbc.com/news/world-latin-america-42006558; Andrea Zarate & Nicholas Casey, Peru Leader Could Be Biggest to Fall in Latin America Graft Scandal, N.Y. Times, Dec. 19, 2017, https://www.nytimes.com/2017/12/19/world/americas/peru-kuczynski-impeachment.html. [155] Simeon Tegel, Peru's President Survives Impeachment Vote Over Corruption Charges, Wash. Post, Dec. 22, 2017, https://www.washingtonpost.com/world/the_americas/perus-president-faces-impeachment-over-corruption-allegations/2017/12/20/61b2b624-e4d9-11e7-927a-e72eac1e73b6_story.html?utm_term=.e542fa1216da. Sonia Goldenberg, 'Game of Thrones', Inca Style, N.Y. Times, Dec. 28, 2017,  https://www.nytimes.com/2017/12/28/opinion/peru-kuczynski-fujimori-pardon-odebrecht.html. [156] Jacqueline Fowks, El fantasma de Odebrecht arrecia en Perú, El País, Mar. 8, 2018, https://elpais.com/internacional/2018/03/08/america/1520467389_977266.html. [157] U.S. State Department Office of Investment Affairs, supra note 150. [158] Id. [159] Decreto Legislativo No. 1352, Artículo 1 (Jan. 2017) (Peru). [160] Id. at Artículo 3. [161] Id. at Artículo 1. [162] Id. at Artículo 4. [163] Id. at Artículos 3-4; New Criminal Liability System for Corporate involved in Corrupt Practices and/or Money Laundering, http://www.estudiorodrigo.com/en/new-criminal-liability-system-for-corporate-involved-in-corrupt-practices-andor-money-laundering/. [164] Decreto Legislativo No. 1352, Artículo 3. [165] Id. at Artículo 17. [166] Id. [167] Id. [168] Omar Manrique, Todas las empresas deberán tomar medidas para prevenir corrupción, Gestión, Dec. 27, 2017, https://gestion.pe/economia/empresas-deberan-medidas-prevenir-corrupcion-223626. [169] Decreto Legislativo No. 1341, Artículo 11 (Jan. 2017) (Peru); José Antonio Payet & Payet Rey Cauvi Pérez, PERUVIAN UPDATE – The Impact of "Lava Jato" on M&A in Peru, International Institute for the Study of Cross-Border Investment and M&A, May 30, 2017, http://xbma.org/forum/peruvian-update-the-impact-of-lava-jato-on-ma-in-peru/. [170] Decreto Legislativo No. 1341, supra note 169. [171] Ejecutivo oficializó ley de muerte civil para corruptos, El Comercio, Oct. 22, 2016, http://elcomercio.pe/politica/gobierno/ejecutivo-oficializo-ley-muerte-civil-corruptos-273517; Decreto Legislativo No. 1243, Artículo 38 (Oct. 2016) (Peru). [172] Comentarios a la "Muerte Civil," Decreto Legislativo 1243, Parthenon, Nov. 1, 2016, http://www.parthenon.pe/editorial/comentarios-a-la-muerte-civil-decreto-legislativo-1243/. [173] Decreto Legislativo No. 1295 (Dec. 2016) (Peru). [174] Id. at Artículo 1. [175] Id. at Artículo 4. [176] Id.

The following Gibson Dunn lawyers assisted in preparing this client update: F. Joseph Warin, Michael Farhang, Lisa Alfaro, Tafari Lumumba, Michael Galas, Abiel Garcia, Renee Lizarraga, John Sandoval and Sydney Sherman.

Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these issues.  We have more than 110 attorneys with FCPA experience, including a number of former prosecutors and SEC officials, spread throughout the firm’s domestic and international offices.  Please contact the Gibson Dunn attorney with whom you usually work in the firm's FCPA group, or the authors: F. Joseph Warin - Washington, D.C. (+1 202-887-3609, fwarin@gibsondunn.com) Michael M. Farhang - Los Angeles (+1 213-229-7005, mfarhang@gibsondunn.com) Please also feel free to contact the following Latin America practice group leaders: Lisa A. Alfaro - São Paulo (+55 (11) 3521-7160, lalfaro@gibsondunn.com) Kevin W. Kelley - New York (+1 212-351-4022, kkelley@gibsondunn.com) Tomer Pinkusiewicz - New York (+1 212-351-2630, tpinkusiewicz@gibsondunn.com) Jose W. Fernandez - New York (+1 212-351-2376, jfernandez@gibsondunn.com) © 2018 Gibson, Dunn & Crutcher LLP Attorney Advertising:  The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 13, 2018 |
Webcast: U.S. Economic and Trade Sanctions Against Venezuela – the Outlook for 2018

This 90-minute complimentary webinar will provide a deep dive into the U.S. economic and trade sanctions against Venezuela, including a review of the most recent developments and a forecast of what may be in store for 2018. View Slides [PDF] https://player.vimeo.com/video/260305390

This program covers:

  • Status of Current Sanctions on Venezuela – Prohibited Parties and Sectors
  • Commerce and State Department Export Controls
  • Impact of Growing Use of Cryptocurrencies in Venezuela
  • On the Horizon – Possibilities for U.S to “Ratchet Up” Sanctions

PANELISTS: Jose W. Fernandez, a partner in our New York office and Co-Chair of the firm’s Latin America Practice Group, previously served as Assistant Secretary of State for Economic, Energy and Business Affairs during the Obama Administration, and led the Bureau that is responsible for overseeing work on sanctions and international trade and investment policy. His practice focuses on mergers and acquisitions and finance in emerging markets in Latin America, the Middle East, Africa and Asia. Judith Alison Lee, a partner in our Washington, D.C. office, is Co-Chair of the firm’s International Trade Practice Group. She practices in the areas of international trade regulation, including USA Patriot Act compliance, FCPA, economic sanctions and embargoes, and export controls. She also advises on issues relating to virtual and digital currencies, blockchain technologies and distributed cryptoledgers. Adam M. Smith, a partner in our Washington, D.C. office, is an experienced international trade lawyer who previously served in the Obama Administration as the Senior Advisor to the Director of OFAC and as the Director for Multilateral Affairs on the National Security Council. His practice focuses on international trade compliance and white collar investigations, including with respect to federal and state economic sanctions enforcement, the FCPA, embargoes, and export controls. Christopher T. Timura, of counsel in our Washington D.C. office, is a member of the firm’s International Trade Practice Group. He counsels clients on export controls (ITAR and EAR), economic sanctions, and anticorruption, and represents them before the departments of State (DDTC), Treasury (OFAC and CFIUS), Commerce (BIS), Homeland Security (CBP), and Justice in investment reviews and in voluntary and directed disclosures involving both civil and criminal enforcement actions.

February 28, 2018 |
Gibson Dunn Named Among Latin Lawyer 250

Gibson Dunn was named to the 2018 edition of The Latin Lawyer 250 for its Latin America-related work in six areas: Arbitration, Banking & Finance, Capital Markets, Corporate and M&A, Litigation and White Collar Crime and Compliance. The list recognizes “the leading business law firms of Latin America and is the result of 20 years of intensive research by Latin Lawyer's editorial team.” The guide was released February 28, 2018.

February 20, 2018 |
Latin America’s Wave of Anticorruption Laws

Los Angeles partner Michael Farhang is the author of "Latin America's Wave of Anticorruption Laws," [PDF] published by the Daily Journal on February 20, 2018.

March 20, 2017 |
Boletín de fin de año 2016 sobre la FCPA

El 2016 fue un año que sentó precedentes en cuanto a la Ley de Prácticas Corruptas en el Extranjero (“FCPA”, por sus siglas en inglés). Después de varios años manteniendo cifras constantes de aplicación de la ley, el Departamento de Justicia, (“DOJ”, por sus siglas en inglés) y la Comisión de Bolsa y Valores (“SEC”, por sus siglas en inglés) presentaron lo que probablemente es el año de aplicación de la ley más significativo en los 39 años de historia de dicha normativa. Con 53 acciones combinadas de aplicación de la ley, más de $2 mil millones en multas corporativas impuestas por las autoridades estadounidenses y otros miles de millones por parte de los organismos extranjeros de regulación en procesos coordinados de enjuiciamiento, retornos anticipados por el Programa Piloto de la FCPA del Departamento de Justicia, así como una clara y creciente intersección entre la FCPA y las disposiciones de informantes de la Ley Dodd-Frank, todavía queda mucho por discutir.

El presente boletín para nuestros clientes ofrece una descripción general de la FCPA, así como las novedades de 2016 relacionadas con el cumplimiento anti-corrupción, los litigios, y las políticas tanto a nivel nacional como internacional. Para ayudar a nuestros clientes a conducirse a través de estos desafíos, nos complace destacar que en el 2016 Gibson Dunn contrató a varios expertos del Departamento de Justicia, incluyendo al Jefe de la Unidad de la FCPA, Patrick Stokes; al Fiscal de los Estados Unidos para el Distrito Este de California, Ben Wagner; y al Fiscal General Asociado en Funciones, Stuart Delery.

Boletín de fin de año 2016 sobre la FCPA (click to view alert)

Los abogados de Gibson Dunn están disponibles para prestar su asistencia respondiendo a cualquier pregunta que tenga con respecto a los temas aquí presentados. Contamos con más de 110 abogados expertos en FCPA, incluyendo a una serie de exfiscales y exfuncionarios de la SEC, desplegados en todas las oficinas nacionales e internacionales del bufete. Comuníquese con el abogado de Gibson Dunn con quien por lo general trabaja, o con cualquier de los abogados de esta lista:

F. Joseph Warin - Washington, D.C. (+1 202-887-3609, fwarin@gibsondunn.com)
Michael M. Farhang - Los Angeles (+1 213-229-7005, mfarhang@gibsondunn.com)

Latin America practice group co-chairs:

Kevin W. Kelley - New York (+1 212-351-4022, kkelley@gibsondunn.com)
Jose W. Fernandez - New York (+1 212-351-2376, jfernandez@gibsondunn.com)
Tomer Pinkusiewicz - New York (+1 212-351-2630, tpinkusiewicz@gibsondunn.com)
Lisa A. Alfaro - São Paulo (+55 (11) 3521-7160, lalfaro@gibsondunn.com 

© 2017 Gibson, Dunn & Crutcher LLP

Anuncio de los abogados: Los materiales anexos fueron elaborados únicamente con fines de información general y no se emiten en calidad de asesoría jurídica.

February 27, 2015 |
2014 Year-End Transnational Litigation Update

2014 was a watershed year for transnational litigation in United States courts.  Rulings by the United States Supreme Court and several United States courts of appeals dramatically reshaped the circumstances under which foreign defendants are subject to general personal jurisdiction, further developed the standards for extraterritorial application of United States laws, and provided important guidance on the scope of sovereign immunity and application of the Foreign Sovereign Immunities Act ("FSIA") to commercial disputes.  The year also saw major developments in the long-running, multifaceted global battle among Chevron Corporation, Ecuador, and United States and Ecuadorian lawyers, as well as in the litigation between Argentina and NML Capital, Ltd., and Yukos Capital and Samaraneftegaz.  In 2014, global litigants also continued to expand their use of 28 U.S.C. § 1782 ("Section 1782") to deploy expansive United States discovery tools in support of foreign disputes.  In response, federal courts have issued key rulings regarding the types of proceedings Section 1782 applies to, the effect of foreign laws protecting privacy and secrecy, and a court's power to compel production of documents stored outside the United States.  In this review, we discuss and analyze the bellwether transnational litigation actions involving these companies, as well as other developments in transnational litigation from 2014 that will be most significant to companies with cross-border operations and involved in transnational disputes.  For ease of reference, we have included hyperlinks to each Part of the alert in this Executive Summary. Part I:  Over the past year, Daimler AG v. Bauman[1] has served to redefine the circumstances under which foreign defendants are subject to general personal jurisdiction in the United States.  Part I of this alert addresses Daimler and how it has been applied. Part II:  The year saw dramatic decisions in cases of transnational attempts to defraud U.S. defendants, including Chevron Corporation's successful RICO suit against the purveyors of what the Wall Street Journal called the legal "fraud of the century."  This section also discusses Laguna v. Dole Food Co., Inc.,[2] a California Court of Appeal decision affirming dismissal of a case that had produced a multi-million dollar judgment as a sanction for the Nicaraguan-based fraud on the court perpetrated against Dole Food Co. and other United States corporations. Part III:  Whether and when United States law can be applied extraterritoriality (and what that means) continues to be the focus of significant litigation.  Part III addresses the latest development of the standards for extraterritorial application of United States laws as first articulated in Morrison v. National Australian Bank Ltd,[3] including 2014's important guidance on the scope of sovereign immunity and the FSIA's application to commercial disputes. Part IV:  2014 saw significant activity in the foreign judgment and arbitral award enforcement and defense arena. Part V:  Recent developments in transnational judgment collection are addressed in this section, including an overview of NML Capital, Ltd.'s long-running effort to collect $1.8 billion in judgments against the Republic of Argentina and the groundbreaking enforcement of important arbitral awards, including the awards arising out of the complex, decade-long Yukos Oil Company dispute. Part VI:  This section addresses developments in transnational discovery, including Section 1782.  In 2014, global litigants continued to expand their use of Section 1782 to deploy expansive United States discovery tools in support of foreign disputes.  In response, federal courts have issued key rulings regarding the types of proceedings Section 1782 applies to, the effect of foreign laws protecting privacy and secrecy, and a court's power to compel production of documents stored outside the United States.

Part I:  Daimler AG v. Bauman:  Developments in Personal Jurisdiction Over Foreign Entities

The Supreme Court's January 2014 decision in Daimler AG v. Bauman,[4] reduced the accessibility of United States courts to plaintiffs bringing actions against foreign corporations.  In Daimler, the Court unanimously held that a foreign corporation with no employees or facilities in the United States could not be subject to personal jurisdiction based on the activities of its agent, an indirect corporate subsidiary, in the forum state. In Daimler, which was argued at the Supreme Court by Gibson Dunn's Thomas H. Dupree Jr., the Court unanimously held that even if the extensive California-based conduct of an indirect subsidiary, including multiple physical facilities and a position as the leading supplier of luxury vehicles in the California market, were imputed to the foreign parent corporation (Daimler AG), they did not subject Daimler AG to general personal jurisdiction in California because that conduct was "slim" when compared to its worldwide operations, and thus was insufficient to render it "at home" in California. Plaintiffs sued Daimler AG (a German corporation) in California district court for an alleged wrong that related to an Argentine subsidiary and occurred in Argentina, arguing that jurisdiction was appropriate because Mercedes-Benz USA, another indirect corporate subsidiary, distributed Daimler AG-manufactured vehicles in California.  After the district court dismissed for lack of personal jurisdiction, the Ninth Circuit affirmed, but then reversed itself en banc.  In a 9-0 decision in which all but one justice joined the majority opinion (Justice Sotomayor concurred), the United States Supreme Court reversed:  "Exercises of personal jurisdiction so exorbitant, we hold, are barred by due process constraints on the assertion of adjudicatory authority."[5]  Instead, general jurisdiction over a defendant could exist only when that entity's "affiliations with the State are so 'continuous and systematic' as to render [it] essentially at home in the forum State."[6]  With regard to corporations, the Court identified the "paradigm" bases for general jurisdiction as "the place of incorporation and the principal place of business."[7]  The Court also considered jurisdictional principles from other countries, concluding that:  "Considerations of international rapport thus reinforce our determination that subjecting Daimler to the general jurisdiction of courts in California would not accord with the 'fair play and substantial justice' due process demands."[8] In the transnational context, Daimler's impact has been immediate in two primary ways, by (1) narrowing the circumstances under which general jurisdiction will be found over foreign corporations and (2) placing greater emphasis on the importance of addressing international comity concerns before exercising jurisdiction.

How Daimler Has Been Interpreted and Implemented

Marking a significant development in transnational litigation, multiple courts applying Daimler over the past year have found that they did not have personal jurisdiction over foreign defendants in transnational and multi-jurisdictional suits.[9] For example, the Southern District of Texas explicitly recognized that Daimler narrowed the courts' ability to exercise personal jurisdiction when it noted that while a foreign company's contacts with Texas would have previously been sufficient for general jurisdiction, Daimler's "even more stringent test" rendered them insufficient.[10] In Sonera Holding B.V. v. Cukurova Holding A.S., the Second Circuit interpreted Daimler as reaffirming "that general jurisdiction extends beyond an entity's state of incorporation and principal place of business only in the exceptional case."[11]  Sonera Holding involved a judgment enforcement suit against a Turkish holding company registered in Turkey.  The defendant did not conduct any operations or own any property in New York or the United States.  The plaintiff argued that general jurisdiction should exist nonetheless because the defendant and its affiliates had engaged in some transactions with United States businesses, among other limited activities within the United States.  The district court held that these contacts were sufficient to create personal jurisdiction.  The Second Circuit reversed and remanded the decision. After determining that New York law would control the issue of personal jurisdiction, the court held that "even a company's 'engage[ment] in a substantial, continuous, and systematic course of business' is alone insufficient to render it at home in a forum."[12]  The defendant and its affiliates' United States conduct did "not come close to making" the defendant "at home" in New York.[13]  The court also cautioned that "Daimler's gloss on due process" may lead New York courts to reevaluate the "doing business" standard for personal jurisdiction under New York law.[14] Following Daimler, courts have also generally declined to follow the Ninth Circuit's agency theory for obtaining general personal jurisdiction.[15]  Indeed, Daimler was initially brought to the Court on a challenge to the Ninth Circuit's "agency" theory of jurisdiction, whereby it imputed the forum-contacts of a subsidiary to the parent where the subsidiary conducted "important" affairs of the parent.  While the Supreme Court ruled that it was unnecessary to reach the agency question, it indicated in dicta that this theory was not valid. [16] While application of Daimler has helped deter several transnational suits with suspect United States connections, it is not a complete bar to transnational suits. Deciding a motion for reconsideration filed after the issuance of Daimler, the District of Minnesota held that it could still assert general jurisdiction over a foreign parent company on the basis of its subsidiary's location and substantial contacts to the forum.[17]  In Barriere v. Juluca, the Southern District of Florida determined that an Anguillan-based corporation was "at home" in Florida based on the maintenance of an in-state sales office, and the substantial activities of the company's agents in the state.[18]  The district court recognized that "Daimler has undoubtedly limited the application of general jurisdiction to foreign defendants," but distinguished the case at hand because, unlike in Daimler, there was "no 'absence' of a Florida connection to the injury, perpetrator, or victim."[19]  The court held that the denial of personal jurisdiction would "effectively deprive American citizens from litigating in the United States for virtually all injuries that occur at foreign resorts maintained by foreign defendants."[20] Interestingly, a second Southern District of Florida decision distinguished Barriere in a case involving a similar set of facts, finding no general jurisdiction over the foreign company.  In Aronson v. Celebrity Cruises, Inc., the court focused on the fact that, unlike in Barriere, there was no "sustained and direct contact with the state" such as an in-state office or telephone number.[21]  The court noted that the fact-specific nature of the general jurisdiction analysis "ha[d] led to some seemingly inconsistent results in this district."[22] And, because Daimler has been interpreted as principally being a case about general jurisdiction, at least one court has held that it did not prohibit finding specific personal jurisdiction based on a theory of agency.  Distinguishing Daimler on the basis that it did not address the viability of establishing specific personal jurisdiction through an agency theory, in In re Chinese-Manufactured Drywall Products Liability Litigation, the Fifth Circuit upheld the exercise of specific jurisdiction over a foreign manufacturer and its subsidiary,[23] allowing the subsidiary's contacts with the forum to be imputed to the manufacturer for the purpose of finding specific jurisdiction.[24]  Likewise, the District Court for the Northern District of California distinguished Daimler in In re Cathode Ray Tube (CRT) Antitrust Litigation, holding that the exercise of personal jurisdiction over a Chinese company manufacturing cathode ray tubes (CRTS) where there was specific personal jurisdiction was reasonable under the circumstances.[25] Back to Top

Part II:  Vindicating the Rule of Law in the Face of Transnational Fraud Targeting United States Companies

In 2014, U.S.-based multinational companies successfully litigated in United States courts to vindicate the rule of law against fraud and corruption directed at them by plaintiffs' lawyers from the U.S. and overseas.  Gibson Dunn was counsel for the companies involved in two of the most significant cases related to this issue, representing Chevron Corporation and Dole Food Company, Inc. On March 4, 2014, Judge Lewis A. Kaplan of the United States District Court for the Southern District of New York entered judgment for plaintiff Chevron in Chevron Corp. v. Donziger et al., Case No. 11-cv-0691.  The court found that the U.S. lawyer who masterminded a $9.2 billion judgment against the company in Ecuador did so "by corrupt means," and in the process violated U.S. federal laws prohibiting attempted extortion, wire fraud, money laundering, witness tampering, and obstruction of justice, as well as the Foreign Corrupt Practices Act.  The court entered judgment for Chevron and imposed equitable relief designed to ensure that "the defendants here may not be allowed to benefit from [the Ecuadorian judgment] in any way."  Calling the case "extraordinary" and "includ[ing] things that normally come only out of Hollywood," the court's 485-page opinion detailed the evidence against U.S. plaintiff's lawyer Steven Donziger and his team, finding that "[t]he wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador -- and they knew it.  Indeed, one Ecuadorian legal team member, in a moment of panicky candor, admitted that if documents exposing just part of what they had done were to come to light, 'apart from destroying the proceeding, all of us, your attorneys, might go to jail.'"  The court determined that Donziger and his team even "wrote the [Ecuadorian] court's Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment."  "If ever there were a case warranting equitable relief with respect to a judgment procured by fraud," the court concluded, "this is it." The decision follows a six-week trial and represents a major victory for Chevron in its multi-pronged response to the long-running purported environmental litigation emanating from Ecuador known as the Lago Agrio litigation.  Gibson Dunn represented Chevron in the closely watched case.  Chevron has long maintained that the proceedings in Ecuador were marred by fraud on the part of the plaintiffs' lawyers, as well as corruption and collusion between the Lago Agrio plaintiffs ("LAPs"), the Ecuadorian court, and the Ecuadorian government.  As a consequence, Chevron sued the plaintiffs' lawyers and other agents in the Southern District of New York under the federal RICO statute and other laws.  The decision vindicates Chevron's claims of fraud and corruption and sends a powerful message to U.S. and other lawyers tempted to capitalize on the weaknesses of foreign judicial systems to attempt to extract payoffs from U.S. companies.  At the same time, it forcefully supports international efforts to promote the rule of law. During the trial, Chevron presented overwhelming and virtually uncontested evidence that Donziger and his co-conspirators had procured the judgment through bribery and fraud, including forging expert reports, hiring Ecuadorian engineers to pose as "neutral" monitors to influence the Ecuadorian court, hiring consultants in the U.S. to ghostwrite the damages report of a purportedly neutral court-appointed "special master" (Richard Cabrera), and bribing the Ecuadorian judge who issued the decision (Nicolás Zambrano) to permit them to ghostwrite the decision in their favor.  Chevron's evidence of the ghostwriting included verbatim quotations from the LAPs' internal work product that appeared on dozens of pages of the judgment.  "These documents never were filed with the Lago Agrio court or made part of the official case record," the court noted, and "Defendants utterly failed to explain how or why their internal work product -- their 'fingerprints' -- show up in the Judgment." Chevron also called as a witness former Ecuadorian judge Alberto Guerra, who testified that he had long served as Judge Zambrano's paid ghostwriter, including in the case against Chevron.  Guerra produced bank deposit slips and other evidence of payments from the LAPs.  He also testified that he had served as a middle-man, conveying Judge Zambrano's bribe solicitation to the LAPs, who accepted it, and then editing their draft of the judgment, which Judge Zambrano then issued as if it were his own.  Donziger called Judge Zambrano as a witness, who denied the bribery scheme, but admitted that Judge Guerra had been his ghostwriter.  Chevron also presented evidence that when Chevron sought discovery from the LAPs' attorneys and consultants in U.S. courts, Donziger and his co-conspirators engaged in a campaign of obstruction to prevent the truth from emerging, filing false affidavits in U.S. courts and tampering with witnesses.  Chevron also presented evidence that Donziger and his co-conspirators had engaged in an improper pressure campaign against Chevron, propagating numerous falsehoods based on their fabricated evidence in the press and to various state and federal agencies in an attempt to extort a settlement from Chevron. In rendering its decision in favor of Chevron, the court noted that "[t]he transnational elements of the case make it sensitive and challenging," but concluded based on the extensive evidentiary record that Donziger was liable under RICO for operating a racketeering enterprise that committed numerous federal crimes, including:
  • Extortion.  The court found that Donziger engaged in two categories of conduct to pressure Chevron to settle the Ecuadorian lawsuit:  corrupt conduct in the Ecuadorian lawsuit itself, and the mounting of a public pressure campaign against the company based on false statements to the media, to U.S. regulatory and prosecutorial agencies, and criminal prosecutions of Chevron lawyers in Ecuador.
  • Obstruction of Justice and Witness Tampering.  The court found that Donziger committed various acts of obstruction of justice and witness tampering to prevent disclosure of the fraud in U.S. discovery proceedings, including filing a false declaration in the name of Donziger's co-conspirator and Ecuadorian counsel for the LAPs, Pablo Fajardo, in at least 17 U.S. district courts:  "Donziger's conduct with respect to the Fajardo Declaration was obstruction of justice, plain and simple."  The court also held that Donziger had engaged in witness tampering by attempting to influence the testimony of Mark Quarles, a former environmental consultant for the LAPs, in related litigation between Chevron and the Republic of Ecuador in the U.S.  The court found that "[a]lthough Donziger knew that the statements he sought to have Quarles make were false, he urged Quarles to adopt them to prevent exposure of the truth regarding Cabrera and to mislead the court.  Donziger's effort to influence Quarles's testimony constitutes witness tampering."
  • The Travel Act and Foreign Corrupt Practices Act ("FCPA").  The court held that Donziger and his co-conspirators' scheme to bribe Cabrera violated the Travel Act because Donziger used a facility of interstate or foreign commerce in furtherance of violations of the FCPA by payment of bribes to Cabrera.  The court found that "[a]ll of the circumstances -- including the fact that a court-approved payment process existed but that the LAP team secretly paid Cabrera outside of that process, used a secret account to do so, worried in emails about whether any of the money should go through Yanza's personal account even temporarily, and used code names as they did it -- indicate that the secret payments were illegal or at least improper, that the LAP team knew that, and that they attempted to conceal their payments."
  • Wire Fraud and Money Laundering.  The court found that Donziger engaged "in a number of deceitful schemes" in order to extract payment from Chevron, "each of which was furthered by use of the wires."  The court also held that the record "contains persuasive evidence" of a number of money laundering offenses, including the solicitation of funding for use in making secret payments to Cabrera.
The court also held that the evidence showing that Donziger's team had written the Ecuadorian judgment, not Judge Zambrano, was "overwhelming and unrefuted."  In support of this finding, the court noted that with respect to the overlap between the LAPs' internal work product and the judgment, "[t]here is no plausible explanation for their presence in the Judgment except that whoever wrote the Judgment copied parts of them."  The court found that Judge Zambrano, who was unable to remember even the most significant aspects of the 188-page judgment that he claimed to have authored, was "a remarkably unpersuasive witness."  In addition, the court held that former judge Guerra's testimony was credible, determining that Guerra "told the truth regarding the bribe and the essential fact as to who wrote the Judgment.  The court is convinced that the LAPs bribed Zambrano and wrote the Judgment in their favor." Defendants' appeal is pending before the Second Circuit. Also, in March of 2014 the California Court of Appeal unanimously affirmed dismissal of a case against Gibson Dunn client Dole Food Company as a "fraud on the court" perpetrated by U.S. and Nicaraguan plaintiffs' lawyers.  Captioned Rojas Laguna v. Dole Food Company, Case No. BC233497, the appeal affirmed a trial court ruling in Tellez v. Dole Food Company, Los Angeles Superior Court, Case No. BC312852, where the court found that U.S. and Nicaraguan plaintiffs' lawyers had "coached their clients to lie about working on banana farms, forged work certificates to create the appearance that their clients had worked on Dole-contracted farms, and faked lab results" as part of a scheme to obtain the judgment against Dole.  In the 25-page appellate decision, the court of appeal found no "valid ground" to disturb the trial court's ruling "that plaintiffs and their counsel committed a fraud on the court by presenting false evidence and testimony." Tellez originally went to trial in 2007 and resulted in a multi-million dollar verdict against Dole, in favor of Nicaraguan plaintiffs claiming injuries from pesticide exposure on Dole-contracted farms in the late 1970s.  The U.S. and Nicaraguan plaintiffs' lawyers handling the case pitched it as a watershed win for U.S. plaintiffs' lawyers, who brought cases in the United States and Nicaragua and obtained billions in Nicaraguan judgments.  It was meant to open the floodgates to additional verdicts and suits. The decision from the court of appeal was the culmination of years of effort by Dole to have the Tellez proceedings re-opened and dismissed for plaintiff fraud, based on a rarely used procedure known as a petition for writ of error coram vobis.  Shortly after the Tellez judgment, Dole, represented by Gibson Dunn, exposed evidence in the related case Mejia v. Dole Food Company, Los Angeles Superior Court, Case No. BC340049, showing that the Tellez claims resulted from what the court found to be a wide-reaching fraudulent scheme perpetrated by U.S. and Nicaraguan lawyers.  Based on this evidence from Mejia--which, according to the trial court, showed a "heinous conspiracy" "to defraud th[e] court, to extort money from the defendants, and to defraud the defendants"--Dole successfully petitioned the Court of Appeal and the trial court to re-open the Tellez proceedings, after final judgment and while the case was pending appeal.  This petition paved the way for a year-long evidentiary process, where, as the Court of Appeal recounted, Dole showed by clear and convincing evidence that the Tellez plaintiffs and their counsel perpetrated fraud on the court by:
  • "[i] recruiting persons who had never worked on banana farms as would be plaintiffs,
  • [ii] coaching plaintiffs to lie about their work on banana farms,
  • [iii] submitting false work certificates,
  • [iv] falsifying sterility by submitting fraudulent laboratory reports and concealing children fathered by plaintiffs, and
  • [v] interfering with witnesses and investigators by threats, intimidation, and tampering."
In affirming these findings, the Court of Appeal held that the Tellez plaintiffs "raise no sufficiency of the evidence challenge with regard to the relevant findings in this case that they too committed a fraud on the court by submitting false testimony, fraudulent declarations and work certificates, and fraudulent laboratory reports as part of the fraudulent scheme orchestrated by their attorneys."  The Court held that Dole met the legal requirements for the "drastic remedy" of relief from a final judgment based on a petition of writ of error coram vobis. Back to Top

Part III:  Morrison v. National Australia Bank:  Limiting the Extraterritorial Reach of Federal Statutes

In 2014, courts continued to apply the Supreme Court's landmark decision in Morrison v. National Australian Bank Ltd. to limit the extraterritorial application of federal statutes. Morrison involved claims brought under Section 10(b) of the Securities Exchange Act of 1934 by foreign purchasers of the stock of a foreign company on a foreign stock exchange.[26]  Under preexisting case law in the federal courts of appeals, whether Section 10(b) applied was generally considered a jurisdictional question resolved with reference to a variety of tests designed to determine whether enough conduct had occurred in the United States or significant enough effects were felt in the United States to justify applying the statute.[27]   Morrison displaced those inquiries. Morrison reaffirmed that the extraterritoriality analysis turns on the statutory text, which must be read in light of the presumption against extraterritoriality.  Thus "[w]hen a statute gives no clear indication of an extraterritorial application, it has none."[28] If a statute does not overcome the presumption against extraterritoriality with such a "clear indication," the only remaining question is whether the asserted application of the statute at issue is extraterritorial, and thus impermissible.[29]  This analysis depends on "the focus of congressional concern" behind the statute at issue.[30]  The Morrison plaintiffs had alleged that the fraud at issue in the case had taken place in Florida, but the Court ruled that this connection to the United States was insufficient to permit application of Section 10(b).  After examining the statutory text, the Court concluded that Section 10(b) only prohibits deceptive conduct "in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered," meaning that Congress' focus was "not upon the place where the deception originated, but upon purchases and sales of securities in the United States."[31]  In other words, "deception with respect to certain purchases or sales is necessary for a violation of the statute."[32]    The Court, therefore, held that Section 10(b) applies only to "the use of a manipulative or deceptive device or contrivance only in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States."[33]

        1.   Developments in the Extraterritorial Reach of the Alien Tort Statute: Kiobel v. Royal Dutch Shell Petroleum Co.

In the 2013 landmark case, Kiobel v. Royal Dutch Shell Petroleum Co., the Supreme Court held that, consistent with the presumption set forth in Morrison (that a statute without a clear indication of extraterritorial application has none), the ATS presumptively does not apply to extraterritorial activity.[34]  Twelve Nigerian nationals residing in the United States sued Dutch, British and Nigerian corporations pursuant to the ATS, alleging that the corporations aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria, including state-sponsored torture and murder.[35]  While noting that the ATS was "strictly jurisdictional" and "does not directly regulate conduct or afford relief," the Court held that the statute was nonetheless subject to the canon of statutory interpretation known as the presumption against extraterritorial application.[36]  That canon provides that "[w]hen a statute gives no clear indication of an extraterritorial application, it has none,"[37] and reflects the "presumption that United States law governs domestically but does not rule the world."[38]   The Court noted that international comity concerns "implicated in any case arising under the ATS, are all the more pressing when the question is whether a cause of action under the ATS reaches conduct within the territory of another sovereign."[39]  Finding that the ATS did not indicate extraterritorial application sufficient to overcome the presumption, the Court concluded that, "there is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms,"[40] and held that violations of the ATS occurring outside the United States be shown to "touch and concern the territory of the United States . . . with sufficient force,"[41] for the claim to survive. While just a year and a half has passed since Kiobel, its effects have been immediate.   The case has been a basis for dismissing ATS actions in a number of circuit courts.  In Chowdhury v. Worldtel Bangladesh Holding, Ltd., the Second Circuit pointed to the Kiobel court's comment that "all the relevant conduct took place outside the United States," barring the plaintiffs' case for violations of the law of nations, the body of customary international law.[42]  On those grounds, the court overturned the plaintiff's favorable jury verdict as to their ATS claims because all of the relevant conduct in the case occurred in Bangladesh.[43]  The Eleventh Circuit used similar language to dismiss a claim where the plaintiffs alleged violations of the ATS, but where the conduct in question occurred in Colombia.[44]  They also pointed out that the defendant's nature as a corporation is not enough to overcome the presumption against extraterritoriality.[45]  In Mujica v. AirScan Inc., the Ninth Circuit also made clear that the defendants' status as United States corporations did not alone provide a sufficient nexus.[46]  They stated that there needed to be sufficient conduct occurring in the United States, agreeing explicitly with the Eleventh and Second Circuits on their interpretation of Kiobel.[47]  Although the cases above have had dissenting opinions taking a different opinion of extraterritoriality, the overall trend in the Circuit courts has been to deny plaintiffs' claims under the ATS unless a sufficient nexus to the United States is shown.[48] While Kiobel may have put ATS actions on life-support in certain Circuits, it is too early to call the death of extraterritorial ATS actions.  In June 2014, a unanimous panel of the United States Court of Appeals for the Fourth Circuit overturned a lower court's dismissal of an action brought by four former Iraqi detainees against defense contractor, CACI International, Inc., claiming the United States defense contractor's employees directed their torture in the Abu Ghraib prison.[49]  Writing for the panel, Judge Keenan concluded that the district court erred in finding it lacked jurisdiction because the alleged abuses occurred on foreign soil.[50]   Judge Keenan explained that the plaintiffs had alleged sufficient connection to the United States, including CACI having won permission and security clearance from the United States government to conduct the interrogations and the alleged acquiescence in the misconduct of CACI managers based in the United States, to "require a different result than that reached in Kiobel."[51]  The Court of Appeals then remanded the case to the district court that had originally dismissed the action.[52]

        2.   Developments in the Extraterritorial Reach of Section 10(b) Securities Act Claims

City of Pontiac Policemen's & Firemen's Retirement System v. UBS AG continued Morrison's trend of further restricting the extraterritorial application of the United States securities laws and signaled the continued limitation on the use of the United States securities laws exclusively to securities that are traded on United States exchanges.[53] In City of Pontiac, the Second Circuit, in an issue of first impression, addressed the application of United States securities laws to foreign securities cross-listed on United States exchanges.  The court ruled that the ban on extraterritorial application of United States securities laws applies not only to situations where foreign securities are listed on foreign exchanges, but also when such securities are cross-listed on United States exchanges.[54]  Previously, the Supreme Court had ruled in Morrison that Section 10(b) of the Exchange Act did not "'provide[] a cause of action to foreign plaintiffs suing foreign [ ] defendants for misconduct in connection with securities traded on foreign exchanges.'"[55] The trend since Morrison for courts to restrict the application of United States securities laws to securities traded exclusively on United States exchanges continued in 2014 with Parkcentral Global Hub Ltd. v. Porsche Auto. Holdings SE.[56]  In Parkcentral, the Second Circuit held that a group of hedge funds that had entered into derivative transactions in the United States tied to the stock of a foreign issuer listed only on foreign exchanges could not bring a Section 10(b) suit against a foreign company for alleged fraudulent statements that it made primarily abroad relating to the foreign issuer.[57] The plaintiff hedge funds argued that the securities-based swap agreements ("Swaps") entered into in the United States, which were economically equivalent to short sales of Volkswagen AG ("VW") stock listed on foreign exchanges, constituted "domestic transactions" under Morrison, such that they could bring a Section 10(b) action in the United States against German corporation Porsche Automobile Holdings SE ("Porsche") and its executives relating to allegedly fraudulent statements that Porsche had made regarding its intentions with respect to VW stock. The Second Circuit acknowledged that the Swaps may have qualified as domestic transactions under Morrison, and it also considered its decision in Absolute Activist Value Master Fund Ltd. v. Ficeto,[58] which outlined what constituted a domestic transaction.  Nonetheless, it ruled that, "while [Morrison] unmistakably made a domestic securities transaction (or transaction in a domestically listed security) necessary to a properly domestic invocation of Section 10(b), such a transaction is not alone sufficient to state a properly domestic claim under the statute."[59]  The court reasoned that where the claims "are so predominantly foreign as to be impermissibly extraterritorial" and likely to "place § 10(b) in conflict with the regulatory laws of other nations," then, based on "the principles underlying the Supreme Court's decision in Morrison," plaintiffs may not bring a Section 10(b) claim even if it relates to a domestic transaction.[60]  The court observed that if a domestic transaction were alone sufficient to bring a Section 10(b) claim, then the United States securities laws would apply extraterritorially to "allegedly fraudulent conduct anywhere in the world" so long as a derivative transaction relating to the underlying foreign securities was entered into in the United States--even where the foreign defendants were unaware of the derivative transaction.[61]  Unwilling to accept that possibility, and noting that the allegations in Parkcentral related to predominantly foreign activity, the Second Circuit held that while the Swap transactions were consummated in the United States, that alone was insufficient under Morrison to state a Section 10(b) claim and therefore affirmed dismissal of the complaints.[62]

        3.   Developments in the Extraterritorial Reach of Commodity Exchange Act Claims

In Loginovskaya v. Batratchenko, 764 F.3d 266 (2d Cir. 2014), the Second Circuit held that a private right of action under the Commodity Exchange Act ("CEA") arises only when "a plaintiff shows that one of the four transactions listed in § 22 [of the CEA] occurred within the United States."[63]  Unless a plaintiff could show that a "domestic transaction" had occurred--evidenced either by a title transfer of the security within the United States or if a buyer or seller incurred "irrevocable liability" related to the transaction within the United States --there could be no private right of action for suits premised on foreign transactions.[64]  Domestic activity undertaken to complete a foreign transaction, such as a wire transfer of funds to the United States, was "insufficient to demonstrate a domestic transaction."[65]  The court rejected the argument that Morrison only foreclosed extraterritorial application of substantive laws, not those that merely created causes of action.  Morrison, it reasoned, did not draw "any such distinction," and the Supreme Court had confirmed this conclusion in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), which relied on Morrison to find that the Alien Tort Statute (a jurisdictional law) did not apply to extraterritorial conduct.[66]  It also noted that litigants who could not establish a "domestic transaction" could still "seek recovery through an administrative proceeding at the Commodity Futures Trading Commission."[67]

        4.   Developments in the Extraterritorial Reach of Dodd-Frank Act Claims

In Liu Meng-Lin v. Siemens AG, 763 F.3d 175 (2d Cir. 2014), the Second Circuit held that the anti-retaliation provision of the Dodd-Frank Act does not apply to extraterritorial conduct.  Liu Meng-Lin involved allegations that the plaintiff had been fired for reporting alleged improper payments by his employer in China, North Korea, and Hong Kong.  After the district court dismissed the plaintiff's complaint, the Second Circuit affirmed.  The court first concluded that the complaint only alleged extraterritorial conduct, and that the defendant's listing on the New York Stock Exchange was insufficient to overcome the presumption against extraterritorial application of United States securities laws.[68]  The court next found that the anti-retaliation provision did not suggest that Congress had intended for it to have extraterritorial application.  Nothing in the text or legislative history indicated such intent,[69] and even though other sections of the Dodd-Frank Act provided for exterritorial application, Congress's decision to omit that language from the anti-retaliation provision counseled against relying on these other sections.[70]   The court also refused to credit agency regulations that supported extraterritorial application because "it is far from clear that an agency's assertion that a statute has extraterritorial effect, unmoored from any plausible statutory basis for rebutting the presumption against extraterritoriality, should be given deference," and also because those regulations were insufficiently related to the statute's anti-retaliation provision.[71] On September 16, 2014, a federal district court in the District of Columbia found in favor of the Commodity Futures Trading Commission after a challenge was raised to its adoption of a general policy that provided for extraterritorial application of the derivatives provisions of the Commodities Enforcement Act and related regulations.[72]  The court concluded that "Congress has clearly indicated that the swaps provisions within Title VII of the Dodd-Frank Act--including any rules or regulations prescribed by the CFTC--apply extraterritorially whenever the jurisdictional nexus in 7 U.S.C. § 2(i) is satisfied."[73]  Given Liu Meng-Lin and the Supreme Court's restrictive approach toward extraterritorial application of United States laws in Morrison and beyond, challenges to the Commodity Futures Trading Commission's general policy may be forthcoming.

        5.   Developments in the Extraterritorial Reach of the Sherman Act

The Foreign Trade Antitrust Improvements Act ("FTAIA"), 15 U.S.C. § 6a, governs the application of the Sherman Act to foreign conduct.  Specifically, it provides that foreign anticompetitive conduct which does not involve United States import commerce, is subject to United States antitrust law only if that conduct: (1) had a direct, substantial, and reasonably foreseeable effect on United States domestic commerce, and (2) that effect "gives rise" to a Sherman Act claim. In 2014, three United States Courts of Appeals issued rulings on the extraterritorial reach of the United States antitrust laws and the meaning of the FTAIA.  Two of the rulings arose from the ongoing litigation concerning the TFT-LCD panel industry. First, in United States v. Hui Hsiung, the Ninth Circuit joined the Second, Third, and Seventh Circuits in holding that the FTAIA does not create a jurisdictional limit on the power of federal courts, but rather "provides substantive elements under the Sherman Act in cases involving no import trade with foreign nations."[74]  The court then held that the defendants' transactions between foreign producers and purchasers located in the United States were "import trade" and fell "outside the scope of the FTAIA."[75]  Because the convictions could be independently sustained on the basis of the clearly proven import trade, the court declined to decide whether the evidence relating to foreign sales of panels that were incorporated into finished consumer products before being imported into the United States was sufficient to establish that the foreign sales had a "direct" effect for purposes of the domestic effects exception to the FTAIA.[76] Second, in Motorola Mobility LLC v. AU Optronics Corp. ("Motorola I"), a Seventh Circuit panel ruled that the FTAIA did not extend United States antitrust law to a scenario that now arises regularly in United States antitrust matters:  the sale abroad of price-fixed products to a foreign buyer, which then integrates those price-fixed products into a finished product that is eventually sold in the United States.[77]  As the court explained, the effect on United States domestic commerce in such a situation is not "direct" under the FTAIA, but rather a situation where foreign conduct "filters through many layers and finally causes a few ripples in the United States."[78]  Nor did the foreign conduct "give rise" to a Sherman Act claim because Motorola--the company which sold finished products in the United States--"mediated" the effect of any price fixing by deciding what price to charge for those phones.[79]  But on July 1, 2014, the panel granted Motorola's request for rehearing and vacated its March 27, 2014 decision, to allow for briefing and oral argument, including amici from the DOJ, FTC, Belgium, Japan, and Korea. On rehearing in Motorola Mobility LLC v. AU Optronics Corp. ("Motorola II"), and again in writing for a unanimous panel, Judge Posner stepped back from Motorola I's finding that the effect of the alleged conduct on United States commerce was not direct, reasonable, and foreseeable.[80]  Instead, he conceded that the United States effect fell into a gray area.  He assumed for the sake of the opinion that there was a direct effect on United States commerce, but declined to decide that point.  Instead, the panel unanimously affirmed the dismissal, holding that Motorola could not meet the additional requirement that the effect on domestic United States commerce give rise to an antitrust cause of action because Motorola's foreign subsidiaries that purchased the allegedly price-fixed product outside of the United States, and not Motorola itself, were the direct purchasers, Motorola did not have a claim under the Sherman Act. The court's decision in Motorola II undertook an extensive analysis of antitrust standing and the indirect-purchaser doctrine of Illinois Brick Co. v. Illinois, which bars indirect purchasers from pursuing Sherman Act claims for damages.[81]  While the court acknowledged that some parent-subsidiary relationships may be exempt from the Illinois Brick bar, it held that foreign subsidiaries are not because they are incorporated under and subject to foreign regulation.[82]  Judge Posner noted that the disadvantage of regulation shopping through foreign incorporation is that a subsidiary's remedies are limited to those granted by its country of citizenship.[83]   Subsidiaries must "take the good with the bad,"[84] and the court held that Motorola, in attempting to avoid that consequence, was merely "asserting a right to forum shop." [85] Although the court barred Motorola from recovering civil damages, it took care to differentiate the civil remedies from the scope of the United States DOJ's authority in criminal matters.  The DOJ had asked the court to "hold that the conspiracy to fix the price of LCD panels had a direct, substantial, and reasonably foreseeable effect on United States import and domestic commerce in cellphones incorporating these panels."[86]  While the court declined to make such a finding, it addressed the government's request for "a disclaimer that a ruling against Motorola would interfere with criminal and injunctive remedies sought by the government against antitrust violations by foreign companies."[87] It emphasized that the ruling was limited to whether a United States -based parent company may sue on behalf of its subsidiaries, and did not constrain the government's future ability to seek criminal and injunctive remedies of foreign corporations, provided that it can demonstrate the requisite statutory effect on domestic commerce.[88] Third, in Lotes Co. v. Hon Hai Precision Industry Co.--which concerned a Taiwanese electronics manufacturing company's claim that the defendants, "a group of five competing electronics firms," had attempted to gain monopoly power over the entire USB connector industry--the Second Circuit addressed whether the plaintiff stated a viable claim under the Sherman Act.[89]  In concluding that the plaintiff's allegations fell short, the court affirmed the lower court's judgment dismissing the plaintiff's claims, but on alternative grounds.[90] In doing so, the court overruled its prior decision in Filetech S.A. v. France Telecom S.A.[91] and held that "the requirements of the FTAIA are substantive and nonjurisdictional in nature," but rejected the plaintiff's argument that the defendants had waived the FTAIA's requirements.[92]  Adopting the Seventh Circuit's (as opposed to the Ninth Circuit's) approach, the court also held "that foreign anticompetitive conduct can have a statutorily required 'direct, substantial, and reasonably foreseeable effect' on United States domestic or import commerce even if the effect does not follow as an immediate consequence of the defendant's conduct, so long as there is a reasonably proximate causal nexus between the conduct and the effect."[93]  The court, however, did not decide whether the plaintiff plausibly alleged "the requisite 'direct, substantial, and reasonably foreseeable effect' under the proper standard" because the court found that the plaintiff's claim did not satisfy the FTAIA's "second limitation," which requires that the "domestic effect . . . 'give[ ] rise to'" the claim.[94]  In particular, the court explained, "regardless of what effect the defendants' conduct ha[d] on United States domestic or import commerce, any such effect did not 'give[ ] rise to' the plaintiff's claim.  To the contrary, in the causal chain the plaintiff allege[d], the plaintiff's exclusion from the relevant market actually precede[d] the alleged domestic effect." [95] Although these decisions provide some guidance about the extraterritorial reach of the United States antitrust laws, Circuit Courts are not uniform in their approaches.  The Hsiung and Motorola II decisions were the subject of pending petitions for en banc review.  Motorola's en banc petition has been denied.[96]  Motorola has stated it will request Supreme Court review.  The resolution of those petitions, and possible petitions to the United States Supreme Court for writs of certiorari, will remain at the front of observers' attention in 2015. The Hsiung rehearing was also denied en banc and the opinion was superseded.[97]

        6.   Developments in the Extraterritorial Reach of RICO

The Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. §§ 1961-1968 creates criminal and civil liability when a "pattern of racketeering"--arising from the violation of certain federal or state criminal laws--is associated with an "enterprise." In 2014, the Second Circuit held in European Community v. RJR Nabisco, Inc. that RICO applies to extraterritorial conduct to the extent that conduct violates an underlying RICO-predicate criminal statute with extraterritorial reach.[98] European Community involved allegations that the defendant "managed, and controlled a global money-laundering scheme with organized crime groups" in violation of RICO and New York law.[99]  The district court dismissed the RICO claims because it found that RICO itself did not overcome the presumption against extraterritorial application, that the "focus" of RICO was the criminal enterprise, and in the case before it, the alleged enterprise was "located and directed outside" the United States.  The Second Circuit reversed, explaining that by establishing some RICO predicate crimes that could "only occur outside the United States" or could apply to both domestic and extraterritorial conduct, "Congress manifested an unmistakable intent that certain of the federal statutes adopted as predicates for RICO liability apply to extraterritorial conduct."[100]  Relying primarily on RICO's statutory text, the Second Circuit held that:
RICO applies extraterritorially if, and only if, liability or guilt could attach to extraterritorial conduct under the relevant RICO predicate. Thus, when a RICO claim depends on violations of a predicate statute that manifests an unmistakable congressional intent to apply extraterritorially, RICO will apply to extraterritorial conduct, too, but only to the extent that the predicate would. Conversely, when a RICO claim depends on violations of a predicate statute that does not overcome Morrison's presumption against extraterritoriality, RICO will not apply extraterritorially either.[101]
It explained that, by making extraterritorial application of RICO "coextensive with extraterritorial application of the relevant predicate statutes," "unmistakable" congressional intent would be satisfied, there would be simplification of "what conduct is actionable in the United States," and certain "incongruous results" would be avoided, such as the shielding of "purely domestic conduct from liability simply because the defendant has acted in concert with a foreign enterprise."[102]  Applying its standard to the predicate statutes before it, the Second Circuit determined that the complaint at issue "allege[d] sufficient domestic conduct" for the mail fraud, wire fraud, and Travel Act allegations.[103] In Petroleos Mexicanos v. SK Engineering & Construction Co. Ltd.,[104] the Second Circuit relied on European Community to affirm dismissal of a complaint filed by Pemex alleging RICO liability based on wire fraud.  Pemex had relied exclusively on the wire fraud statute in pleading predicate acts, which European Community established as insufficient to support extraterritorial application of the RICO statute. In Reich v. Lopez,[105] a district court also considered RICO allegations based on violations of predicate offenses of the Travel Act and wire fraud. The court held that the plaintiff had alleged "sufficient domestic conduct for each of these predicate acts" to overcome extraterritoriality concerns.[106]  Specifically, the plaintiff alleged bribery of foreign officials via wire communications originating from the United States, defendants' travel to and from the United States, defendants' use of United States bank accounts, and defendants' use of wire communications in United States interstate commerce to direct the alleged bad acts.[107] Back to Top

Part IV:  Developments in Foreign Judgment Recognition and Enforcement

While United States courts are finding ways to respond to the influx of transnational suits, foreign judgment recognition and enforcement suits, which have been on the rise for the past decade, showed no sign of slowing in 2014.   Indeed, many plaintiffs appear to see recognition and enforcement suits as a vehicle for making an end run around the traditional United States trial process.[108]  Instead of engaging in pre-trial discovery and a full domestic trial on the merits, they file suits asking United States courts to domesticate foreign judgments and to treat the factual findings and evidence from the foreign proceeding as the law of the case, often based on little more than proof of the foreign judgment itself.[109]   If the foreign judgment is the product of fraud, corruption or a breakdown in the rule of law, it threatens the integrity of the United States system, as it can be difficult and time-consuming for defendants to reveal the deficiencies in foreign judgments.[110] Subject to certain requirements, United States courts are willing to entertain the recognition and enforcement of final and enforceable foreign civil judgments for a fixed sum of money, excluding judgments for fines, penalties or taxes.  Further, the United States generally adheres to the rule that the courts of one nation will not enforce the penal laws of another nation.[111]  The question of whether a certain state statute constitutes "penal law" depends on whether its purpose is to punish an offense against the public justice of the state, or to afford a private remedy to a person injured by the wrongful act.[112] In a recent decision, Plata v. Darbun Enterprises, Inc., a California state court reiterated that "the issue whether a monetary award is a penalty within the meaning of the [Recognition Act] requires a court to focus on the legislative purpose of the law underlying the foreign judgment.  A judgment is a penalty even if it awards monetary damages to a private individual if the judgment seeks to redress a public wrong and vindicate the public justice, as opposed to affording a private remedy to a person injured by the wrongful act."[113] In the same vein, in Harvardsky Prumyslovy Holding v. Kozeny, an intermediate New York appellate court held that the Czech judgment at issue was not "a fine or other penalty" and was therefore entitled to recognition in New York even though it had been issued by a criminal court in the Czech Republic.[114]  In that case, the monetary judgment was found to be remedial and therefore the judgment was considered to constitute a "judgment of a foreign state granting . . . a sum of money," thus entitled to recognition in New York.[115] In general, the guiding principle in determining whether a litigant in foreign court proceedings had sufficient notice of the proceedings so as to allow recognition and enforcement of the foreign judgment is whether a reasonable method of notification was employed and reasonable opportunity to be heard was afforded to the person affected.  In a recent decision, Gardner v. Letcher,[116] the District of Nevada pointed to the fact "that no summons was served and that the 'Summary of the Document to be Served' form was not completely filled out."  Because the Hague Convention's requirements for service were also not satisfied, the court concluded that the Swiss court did not have personal jurisdiction over the defendant.[117] In Midbrook Flowerbulbs Holland B.V. v. Holland America Bulb Farms, Inc.,[118] the Western District of Washington granted summary judgment in favor of Midbrook, which had been seeking to enforce a judgment from a Dutch court against Holland America, a Washington company.  The court granted an order recognizing the Dutch judgment pursuant to the Uniform Foreign-Country Money Judgments Recognition Act ("UFCMJRA").[119]  While the court recognized that the UFCMJRA allows courts not to recognize a foreign judgment if "[t]he specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law," the court concluded that Holland failed to demonstrate that the Dutch proceedings were not compatible with due process.[120] Back to Top

Part V:  Developments in Transnational Litigation and Judgment Collection

        1.   Argentina v. NML Litigation:  The Supreme Court's Restrictive Reading of the FSIA and Sovereign Immunity

On June 16, 2014, the United States Supreme Court delivered two rulings related to a dispute arising from Argentina's 2001 default on its external debt, Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2250 (2014), and Republic of Argentina v. NML Capital, Ltd., 134 S. Ct. 2819 (2014).  In 2005 and 2010, Argentina restructured most of that debt by offering creditors new securities, with less favorable terms, in exchange for the defaulted ones.  Most bondholders accepted Argentina's offer.  Respondent, NML Capital, Ltd. ("NML"), among others, did not and sued Argentina in a United States federal district court to collect the debt, and prevailed. The most important of these Supreme Court rulings, Republic of Argentina v. NML Capital, Ltd. ("NML I"), 134 S. Ct. 2250 (2014), concerned a dispute over third-party subpoenas that NML served on two banks in 2010 to discover information about Argentina's property and financial transactions.[121]  Theodore B. Olson of Gibson Dunn argued the case before the Supreme Court on behalf of NML.  One of the banks, joined by Argentina, moved to quash the subpoena, and NML moved to compel compliance.[122]  The district court upheld the requested discovery, and the Second Circuit affirmed.[123]  Joined by the United States as amicus curiae, Argentina requested the Supreme Court to reverse the decision of the Second Circuit and to hold that the FSIA protects it from discovery into its assets held outside the United States and other assets Argentina claimed were immune from execution in United States courts.  In a 7-1 decision, the Supreme Court rejected Argentina's arguments, upheld NML's subpoenas, and held that the FSIA did not confer upon Argentina the requested protection from post-judgment discovery of information, thereby affirming the District Court and the Second Circuit.[124] Justice Scalia, writing for the majority, began by noting that "[t]he rules governing post-judgment execution proceedings are quite permissive."[125]  Foreign sovereign immunity," Justice Scalia noted, "is, and always has been, 'a matter of grace and comity on the part of the United States, and not a restriction imposed by the Constitution.'"[126]  After setting out the evolution of the application of comity, the Supreme Court emphasized that the FSIA now provides a "comprehensive" set of legal standards to govern any claim of immunity by foreign sovereign States and, as such, "any sort of immunity defense made by a foreign sovereign in an American court must stand on the Act's text. Or it must fall."[127]  According to the Court, nowhere in the FSIA's "comprehensive" framework did the legislature prohibit or limit discovery in aid of execution of a foreign sovereign's assets.[128] The Court also rejected Argentina's argument that the FSIA categorically barred discovery into assets that a foreign sovereign regards as diplomatic or military.  While the subpoenas were "bound to turn up information about property that Argentina regards as immune," the Court noted that NML "may think the same property not immune."[129]  In that situation, the foreign sovereign's "self-serving legal assertion will not automatically prevail; the District Court will have to settle the matter."[130] Regarding the potential effects of granting such a discovery order on international comity and international relations, the Court responded that "[t]hese apprehensions are better directed to that branch of government with authority to amend the Act."[131] The ruling has been referred to in seven decisions from federal courts of appeals from three Circuits, the Second, Third, and Seventh Circuits.[132] In conjunction with the ruling in NML I, the Court denied Argentina's petition for certiorari seeking review of a different Second Circuit decision that required Argentina to repay NML and other holders of defaulted bonds any time it made payments on the securities that it had issued in the 2005 and 2010 exchange offers.  See Republic of Argentina v. NML Capital, Ltd. ("NML II"), 134 S. Ct. 2819 (2014).  Since its default, Argentina had not made a single payment on NML's bonds, whereas it had continued to pay other creditors who accepted smaller exchange offers that Argentina had pressed upon them.[133]  NML sought, and the district court issued, an injunction requiring Argentina to provide equal treatment to NML's bonds.[134]  The Second Circuit affirmed this injunction, concluding that Argentina breached a provision in its bond agreement with NML that required Argentina to treat NML's bonds at least equally to the rest of its external debt.[135]  Moreover, the Second Circuit held that the injunction was consistent with the FSIA,[136] and that it served the public interest by ensuring that contracting parties meet their obligations.[137]  Argentina was supported by the governments of France, Mexico, and Brazil (but not the United States), in its petition for review of that decision, but the Supreme Court rejected it, allowing the District Court's injunctions -- which had been stayed -- to take effect.[138]

        2.   Additional Developments in the Enforcement of Judgments Against Sovereign Entities

In another case related to the Argentine bond dispute, on December 23, 2014, in Aurelius Capital Master, Ltd. v. Republic of Argentina, the Second Circuit issued a summary order upholding orders by the Southern District of New York compelling Argentina and third-party banks to comply with additional discovery demands issued by NML.[139]  The court held that, even if NML's discovery related to diplomatic or military property potentially immune from attachment under international treaties or the FSIA, Argentina's assertions of immunity did not entitle it to withhold otherwise discoverable information.[140]  The court reasoned as follows: First, the Second Circuit rejected Argentina's contention that the FSIA prohibits discovery of sovereign property that is potentially immune from attachment, noting that the United States Supreme Court had already rejected this argument in the NML I ruling summarized in the preceding section.[141] Second, the Second Circuit rejected Argentina's argument that the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations--treaties to which both the United States and Argentina are signatories--prohibited attachment of diplomatic and consular property and discovery of diplomatic and consular documents.[142]  The court held that to the extent the discovery demands reached diplomatic or consular property that was immune from attachment, Argentina should object if and when NML actually sought to execute on such property.[143]  Insofar as the discovery demands reached diplomatic or consular documents that were privileged or inviolable under the treaties, the court held that Argentina should present its objections to the District Court "in the form of assertions of privilege or inviolability."[144] Third, the Second Circuit rejected Argentina's argument that discovery into a foreign sovereign's purported military property was precluded by the FSIA, 28 U.S.C. § 1611.  Citing NML I, the court reiterated that "the potential immunity of property from attachment does not preclude discovery of that property," and noted that such discovery may in fact be "necessary for the parties to properly litigate the existence of immunity."[145] In a different 2014 case implicating the FSIA, on August 29, 2014, the D.C. Circuit delivered its ruling in Odhiambo v. Republic of Kenya.[146]  Plaintiff, an employee of a Kenyan private bank who had reported certain tax irregularities associated with accounts at his employer bank, claimed he had made the report in response to an ad by the Kenya Revenue Authority promising a reward in exchange for such information.[147]  The plaintiff claimed that Kenya had failed to pay him the promised reward.[148]  After the plaintiff was identified as an informant, he feared for his safety and Kenyan authorities assisted him in moving to the United States as a refugee.[149]  The plaintiff then sued Kenya for breach of contract in relation to the alleged underpayment of rewards.[150]  Kenya moved to dismiss on the basis of sovereign immunity. The D.C. Circuit held that the FSIA barred the suit because none of the statute's enumerated exceptions applied.  Specifically, the court found that Kenya's accession to the 1951 Convention Relating to the Status of Refugees was not sufficient for "the exacting showing required for waivers of foreign sovereign immunity."[151]  Furthermore, the court rejected, among others, plaintiff's argument that jurisdiction existed under the third clause of the "commercial activity exception," [152] which permits suit when a claim is based "upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States."[153]  The court agreed that plaintiff's claim was based on Kenya's commercial activity outside the United States, but found that it could not be found to cause a direct effect in the United States merely because Odhiambo now lived there.[154]  The court noted that in prior breach of contract cases, the point of whether an effect was "direct" had hinged on whether the United States was the place of performance of the contract.[155]  The court concluded that Kenya's alleged breach of contract only had an indirect effect in the United States as a result of Odhiambo's intervening relocation.[156]  According to the court, to allow plaintiffs to sue for breach of contract under this exception after moving to the United States would vastly expand the scope of the exception.[157]  The court therefore held that "breaching a contract that does not establish or necessarily contemplate the United States as a place of performance does not cause a direct effect in the United States."[158]

        3.   Yukos v. Samaraneftegaz:  Developments in Enforcement of Arbitral Awards

In 2007, Yukos Capital S.A.R.L. secured an award in the amount of 3,080,711,971 Russian Rubles plus fees and costs against OAO Samaraneftegaz in an arbitration conducted in New York under the ICC Rules of Arbitration.  In 2010, Gibson Dunn filed a petition on behalf of Yukos Capital to confirm the award in the Southern District of New York.  After extensive discovery into the validity of the arbitration agreement, which Samaraneftegaz asserted was invalid, the Southern District granted the petition in 2013.  The Southern District rejected Samaraneftegaz's defenses to confirmation, including:  (1) Samaraneftegaz's request that the Court dismiss the enforcement action on forum non conveniens grounds; (2) Samaraneftegaz's claim that the Southern District lacked personal jurisdiction over Samaraneftegaz; and (3) Samaraneftegaz's arguments that the award should not be enforced under the New York Convention because Samaraneftegaz lacked notice of the arbitration and the award was against public policy.[159]  Samaraneftegaz appealed.  In a later proceeding, the Southern District converted the amounts awarded in Russian rubles into United States dollars using the exchange rate as of the date the arbitration award was issued.[160]  Samaraneftegaz appealed that order as well. On November 4, 2014, the Second Circuit, in a summary opinion, affirmed the district court's decision to enforce the award and to convert the rubles award into dollars as of the date of the award.[161] The court rejected Samaraneftegaz's claim that enforcement of the award violated public policy, finding that the "district court was not required to defer to [a] Russian court's determination that enforcement would violate Russian public policy" and that Samaraneftegaz had "never made any public policy arguments to the arbitrators."  Regarding the currency conversion, the court noted that the district court had followed "prevalent practice" by having "correctly determined that the proper date of conversion is the date that enforcement action arose, which is necessarily the date of the arbitration award."[162]  Robert Weigel of Gibson Dunn argued the case on behalf of Yukos Capital. In furtherance of its enforcement strategy, Yukos Capital moved for a turnover order based on the actions that Samaraneftegaz had taken that effectively depleted its available assets.  Turnover orders are a judgment enforcement mechanism available under New York law.[163] On January 9, 2014, the Southern District of New York issued a turnover order in favor of Yukos Capital.[164]  The court enjoined Samaraneftegaz from paying dividends, making loans or any other asset transfers to its shareholders or corporate affiliates until it paid Yukos Capital or posted a bond for the full value of the award. The court also rejected Samaraneftegaz's argument that it would suffer irreparable harm from the turnover order--finding instead that Yukos Capital would suffer irreparable harm and have no adequate remedy at law in the absence of the turnover order because Samaraneftegaz had made sizeable transfers of dividends and interest free loans to its corporate affiliates, effectively depleting its available assets.  Finally, the court characterized Samaraneftegaz's efforts to re-litigate the issues that had already been decided as "strained and entirely unsubstantiated," as well as "a transparent attempt to escape paying the judgment."  Samaraneftegaz appealed the turnover order. Expressing no opinion as to the merits of the underlying issues, the Second Circuit vacated the turnover order and remanded to the district court to clarify its ruling on alternative service of the turnover motion and to explain its conclusion that no foreign law conflict exists. Back to Top

Part VI:  Developments in Transnational Discovery

Until recently, Section 1782 was rarely used as a discovery tool in aid of foreign litigation, but since 2010 it is increasingly becoming an essential tool as litigants pursue transnational lawsuits.  Section 1782 enables litigants to use the United States' broad discovery process to obtain evidence that might otherwise be unavailable within the constraints of pending foreign proceedings.  Section 1782 also does not restrain the use of such evidence if offered in a domestic action.  As a result, litigants may initially seek the discovery for use in the foreign litigation, but may ultimately use the evidence collected to bring a separate action in the United States. While there are limits to the availability of Section 1782 discovery, 2014 saw the expansion of certain of those limits.

        1.   To which foreign tribunals does Section 1782 apply?

Courts remain divided over which foreign arbitral tribunals may serve as the basis for a Section 1782 application. Since Intel, courts have universally found that investor-state arbitration--which arises from treaty obligations contained in bilateral investment treaties or multilateral investment treaties--constitutes a "tribunal" under Section 1782.[165] With respect to private commercial arbitration, however, appellate courts have not provided clear guidance on whether Section 1782 assistance is available.  The Eleventh Circuit initially seemed open to the idea and held, in In re Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., that Section 1782 applied to a private commercial arbitration because the tribunal was a "first-instance decision-maker whose judgment was subject to judicial review."[166]  However, in January 2014, the Eleventh Circuit vacated the decision--in part because it did not have a sufficiently developed record on the nature of the arbitration tribunal--and issued a new decision that did not reach the issue because two lawsuits in Ecuadorian courts had been filed, thus obviating the need for the Eleventh Circuit to go further.[167] As a result, the only appellate rulings on the issue are from the Courts of Appeals for the Fifth[168] and Second[169] Circuits, which do not recognize foreign private arbitral bodies (as opposed to investor state arbitration) as "tribunals" for Section 1782 purposes.  Notwithstanding these appellate rulings, a number of federal district courts have ruled to the contrary, and have allowed the use of Section 1782 to collect evidence for use in purely private foreign arbitrations.[170]

        2.   How do Foreign Blocking, Privacy and Secrecy Laws Impact the Application of Section 1782 to Foreign Persons?

Foreign statutes seldom provide American-style discovery, like that found in Section 1782.  While Section 1782 has some built-in protections--like the statutory requirement that prohibits compelled disclosure in violation of "any legally applicable privilege" and the Intel factors that grant courts discretion to deny "unduly intrusive or burdensome requests" and requests that attempt to "circumvent foreign proof gathering restrictions"--courts deciding Section 1782 applications have weighed the impact of foreign statutes and come out on both sides.[171] In October 2014, the Southern District of New York quashed a Section 1782 subpoena seeking documents located in Russia and Ukraine from the law firm Chadbourne & Parke LLP for use in proceedings in Amsterdam, Netherlands, in part on the ground that they were "protected under Russian and Ukrainian client confidentiality and personal data privacy laws" such that disclosure "would offend core tenets of our [United States] legal system (and those of Russia and Ukraine)."[172]

        3.   Section 1782 and Documents Located Abroad

Whether documents located outside the United States can be obtained through Section 1782 discovery from a corporation with a presence in the United States is the subject of dispute.  Where the target is "found" in the district and has "control" over the documents under the Federal Rules of Civil Procedure, courts have been wrestling inconclusively with whether Section 1782 permits discovery of documents located overseas. In 2014, several courts denied discovery applications that sought documents located overseas.  In In re Slawomir Kaczor and Tomasz Rogucki,[173] the Southern District of Ohio denied a Section 1782 application for discovery in aid of Polish proceedings because, among other things, the discovery sought was located in Poland and "courts have read into § 1782 a threshold requirement that the material sought be located in the United States."[174]  The court also noted that the legislative history of Section 1782 establishes that it "was intended to aid in obtaining oral and documentary evidence in the United States . . . and was not intended to provide discovery of evidence maintain[ed] within a foreign district."[175] Likewise, in In re Certain Funds, Accounts, and/or Investment Vehicles Managed by Affiliates of Fortress Investment Group LLC,[176] the Southern District of New York observed that "courts have read into § 1782 a threshold requirement that the material sought be located in the United States," though the court denied the discovery application on other grounds." Back to Top
   [1]   134 S. Ct. 746 (2014).    [2]   No. B233497, 2014 WL 891268 (Cal. Ct. App. Mar. 7, 2014).    [3]   561 U.S. 247 (2010).    [4]   134 S. Ct. 746 (2014).    [5]   Id. at 751.    [6]   Id. at 761 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)) (quotation marks omitted).    [7]   Daimler, 134 S. Ct. at 749 (citing Goodyear, 131 S. Ct. at 2853-54).    [8]   Id. (citation omitted).    [9]   See, e.g., Air Tropiques, Sprl v. N. & W. Ins. Co., No. H-13-1438, 2014 WL 1323046, at *10 (S.D. Tex. Mar. 31, 2014); Brown v. CBS Corp., 19 F. Supp. 3d 390, 397-98 (D. Conn. 2014); Krishanti v. Rajaratnam, No. 2:09-cv-05395 (JLL)(JAD), 2014 WL 1669873, at *6 (D.N.J. Apr. 28, 2014); Intellectual Ventures I LLC v. Ricoh Co., Ltd., No. 13-474-SLR, 2014 WL 4748703, at *3 (D. Del. Sept. 12, 2014).   [10]   Air Tropiques, 2014 WL 1323046, at *10.   [11]   750 F.3d 221, 223 (2d Cir. 2014).   [12]   Sonera Holding, 750 F.3d at 226 (quoting Daimler, 134 S. Ct. at 761).   [13]   Sonera Holding, 750 F.3d  at 224-26.   [14]   Id. at 224 n.2.   [15]   The Ninth Circuit's agency theory focused on a showing of "special importance of the services performed by the subsidiary."  Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 920 (9th Cir. 2011).  They looked to whether the services performed by the subsidiary were of the sort that, had they not been performed, would have had to have been performed by the parent corporation's own officials.  Id.   [16]   Daimler, 134 S.Ct. at 759-60.   [17]   George v. Uponor Corp., 988 F. Supp. 2d 1056, 1079-80 (D. Minn. 2013), reconsideration denied (Apr. 14, 2014).   [18]   No. 12-23510-CIV, 2014 WL 652831, at *8-9 (S.D. Fla. Feb. 19, 2014).   [19]   Id. at *9.   [20]   Id.   [21]   No. 12-cv-20129, 2014 WL 3408582, at *6-7 (S.D. Fla. May 9, 2014).   [22]   Id. at *3.   [23]   753 F.3d 521, 528, 530 (5th Cir. 2014).   [24]   Id. at 531-32.   [25]   27 F. Supp. 3d 1002, 1006, 1015 (N.D. Cal. 2014).   [26]   See 561 U.S. at 250.   [27]   Id. at 255-62.   [28]   Id. at 255, 261.   [29]   Id. at 255.   [30]   Id. at 266.   [31]   Id.   [32]   Id. at 272 (quoting Section 10(b)).   [33]   Id. at 273.   [34]   133 S. Ct. 1659 (2013).   [35]   Id. at 1660.   [36]   Id. at 1664.   [37]   Id. at 1661.   [38]   Id. at 1664.   [39]   Id. at 1665.   [40]   Id. at 1668.   [41]   Id. at 1669.   [42]   Chowdhury v. Worldtel Bangladesh Holding, Ltd., 746 F.3d 42, 49 (2d Cir. 2014) (citing Kiobel, 133 S.Ct. at 1669).   [43]   Id.   [44]   Cardona v. Chiquita Brands Int'l, Inc., 760 F.3d 1185, 1189 (11th Cir. 2014).   [45]   Id.   [46]   771 F.3d 580, 593 (9th Cir. 2014).   [47]   Id. at 596 (agreeing with the Eleventh Circuit in Cardona and the Second Circuit in Daimler AG).   [48]   See also Ben-Haim v. Neeman, 543 F. App'x 152, 154 (3d Cir. 2013) (taking the same stance as the Second, Eleventh and Ninth Circuits).   [49]   Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516 (4th Cir. 2014).   [50]   Id. at 520.   [51]   Id. at 529.   [52]   Al Shimari v. CACI Int'l, Inc., 951 F. Supp. 2d 857 (E.D. Va. 2013).   [53]   752 F.3d 173 (2d Cir. 2014).   [54]   Id. at 188.   [55]   Id. at 179 (quoting Morrison, 561 U.S. at 250-51).   [56]   763 F.3d. 198 (2d Cir. 2014).   [57]   Id. at 215.   [58]   677 F.3d 60 (2d Cir. 2012).   [59]   Parkcentral, 763 F.3d at 215 (emphasis added).   [60]   Id. at 215-18.   [61]   Id. at 214.   [62]   Id. at 218.   [63]   764 F.3d at 272.   [64]   Id. at 272-74.   [65]   Id. at 275 (citation omitted).   [66]   Id. at 272-73.   [67]   Id. at 270, 273 (citation omitted).   [68]   Liu Meng-Lin, 763 F.3d at 179.   [69]   Id. at 180.   [70]   Id. at 180-81.   [71]   Id. at 182-83.   [72]   Sec. Indus. and Fin. Mkts. Assoc. v. U.S. Commodity Futures Trading Comm'n, No. 13-1916 (PLF), 2014 WL 4629567 (D.D.C. Sept. 16, 2014).   [73]   Id. at *42.   [74]   758 F.3d 1074, 1088 (9th Cir. 2014).   [75]   Id. at 1091.   [76]   Id. at 1093.   [77]   746 F.3d 842 (7th Cir. 2014) (Posner, J.), reh'g granted and opinion vacated (July 1, 2014).   [78]   Id. at 844 (internal quotation marks omitted).   [79]   Id. at 845.   [80]   No. 14-8003, 2015 WL 137907 (7th Cir. Jan. 12, 2015).   [81]   431 U.S. 720 (1977).   [82]   Motorola II, 2015 WL 137907 at *6.   [83]   Id. at *5.   [84]   Id. at *12 (internal quotation marks omitted).   [85]   Id. at *5.   [86]   Id. at *9 (internal quotation marks omitted).   [87]   Id. at *10.   [88]   Id. at *9-10.   [89]   753 F.3d 395, 398 (2d Cir. 2014).   [90]   Id. at 398-99.   [91]   157 F.3d 922 (2d Cir. 1998).   [92]   Lotes, 753 F.3d at 398-99, 404-09.   [93]   Id. at 398.   [94]   Id. (quoting 15 U.S.C. § 6a(2)).   [95]   Id.   [96]   Motorola Mobility LLC v. AU Optronics Corp., 773 F.3d 826 (7th Cir. 2014), reh'g en banc denied, No. 14-8003, 2015 WL 137907 (7th Cir. Jan. 12, 2015).   [97]   United States v. Hui Hsiung, No. 12-10492, 2015 WL 400550 (9th Cir. Jan. 30, 2015).   [98]   764 F.3d 129 (2d Cir. 2014).   [99]   Id. at 133. [100]   Id. [101]   Id. [102]   Id. at 139. [103]   Id. [104]   572 F. App'x 60 (2d Cir. 2014). [105]   2014 WL 4067179 (S.D.N.Y. Aug. 18, 2014). [106]   Id. at *5. [107]   Id. [108]   See Osorio v. Dole Food Co., 665 F. Supp. 2d 1307 (S.D. Fla. 2009); Bridgeway Corp. v. Citibank, 45 F. Supp. 2d 276, 288 (S.D.N.Y. 1999), aff'd, 201 F.3d 134 (2d Cir. 2000). [109]   See Restatement (Third) of Foreign Relations Law §§ 481-86 (1987); Uniform Foreign-Country Money Judgments Recognition Act, ULA FC Money JMT § 3(a) (2005). [110]   See William E. Thomson & Perlette Michèle Jura, Confronting the New Breed of Transnational Litigation: Abusive Foreign Judgments, U.S. Chamber Institute for Legal Reform (Oct. 2011). [111]   Huntington v. Attrill, 146 U.S. 657, 673-74 (1892). [112]   Id. [113]   No. D062517, 2014 WL 341667, at *5 (Cal. Ct. App. Jan. 31, 2014). [114]   117 A.D.3d 77, 79 (2014). [115]   Id. at 80. [116]   No. 2:12-CV-00488-KJD, 2014 WL 3611587, at *1 (D. Nev. July 18, 2014). [117]   Id. [118]   No. 14-5409 RJB, 2014 WL 5605058, at *1 (W.D. Wash. Nov. 4, 2014). [119]   Id. [120]   Id. at *6. [121]   NML I, 134 S. Ct. at 2253. [122]   Id. [123]   Id. [124]   When it issued the bonds, Argentina expressly waived any jurisdictional immunity it otherwise had under the FSIA. [125]   NML I, 134 S. Ct. at 2254. [126]   Id. at 2255 (citing Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486 (1983)). [127]   NML I, 134 S. Ct. at 2255-56. [128]   Id. at 2256. [129]   Id. at 2258. [130]   Id. [131]   Id. [132]   Mare Shipping Inc. v. Squire Sanders (US) LLP, 574 F. App'x 6 (2d Cir. 2014); Exp.-Imp. Bank of the Republic of China v. Grenada, 768 F.3d 75 (2d Cir. 2014); Gucci Am. v. Weixing Li, 768 F.3d 122 (2d Cir. 2014); Ohntrup v. Makina Ve Kimya Endustrisi Kurumu, 760 F.3d 290 (3d Cir. 2014); Pine Top Receivables of Ill., LLC v. Banco de Seguros del Estado, 771 F.3d 980 (7th Cir. 2014); Bormes v. United States, 759 F.3d 793 (7th Cir. 2014); Gates v. Syrian Arab Republic, 755 F.3d 568 (7th Cir. 2014). [133]   NML Capital, Ltd. v. Republic of Argentina, 727 F.3d 230, 237 (2d Cir. 2013). [134]   Id. [135]   Id. at 237, 241. [136]   Id. [137]   Id. at 248. [138]   NML II, 134 S. Ct. 2819. [139]   No. 13-4054, 2014 WL 7272279 (2d Cir. Dec. 23, 2014). [140]   Id. at *1-2. [141]   Id. at *1. [142]   Id. at *2. [143]   Id. [144]   Id. [145]   Id. [146]   764 F.3d 31 (D.C. Cir. 2014). [147]   Id. at 33. [148]   Id. [149]   Id. [150]   Id. [151]   Id. [152]   Id. [153]   28 U.S.C. § 1605(a)(2). [154]   Odhiambo, 764 F.3d at 38. [155]   Id. [156]   Id. [157]   Id. at 39. [158]   Id. at 40. [159]   Id. [160]   Yukos Capital S.A.R.L. v. OAO Samaraneftegaz, 963 F.Supp.2d 289 (S.D.N.Y. Aug. 6, 2013). [161]   Yukos Capital S.A.R.L. v. Samaraneftegaz, No. 13-3357-CV, 2014 WL 5572696 (2d Cir. Nov. 4, 2014). [162]   Id. at *3. [163]   N.Y. C.P.L.R. 5225(a). [164]   Yukos Capital S.A.R.L. v. OAO Samaraneftegaz, 2014 WL 81563 (S.D.N.Y. Jan. 9, 2014). [165]   See, e.g., In re Appl. of Mesa Power Group, LLC, 2012 WL 6060941 (D.N.J. Nov. 20, 2012); In re Appl. of Chevron Corp., 2012 WL 3636925 (S.D. Fla. June 12, 2012). [166]   685 F.3d 987, 997 (11th Cir. 2012). [167]   Application of Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262 (11th Cir. 2014). [168]   The Fifth Circuit, in El Paso Corp. v. La Comision Ejecutiva Hidroelecctrica Del Rio Lempa, issued an unpublished opinion that Section 1782 did not apply to a private commercial arbitration conducted pursuant to an agreement under the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules.  341 F. App'x 31 (5th Cir. 2009). [169]   The Second Circuit held, in a pre-Intel decision that Section 1782 did not apply to a private foreign arbitration held by the ICC International Court of Arbitration.  NBC v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999). [170]   See, e.g., In re Owl Shipping, LLC & Oriole Shipping, LLC, 2014 WL 5320192 (D.N.J. Oct. 17, 2014) (finding that the London Maritime Arbitrators Association constituted a Section 1782 tribunal). [171]   Intel, 542 U.S. at 264-65. [172]   In re Application Pursuant to 28 U.S.C. Section 1782 of Okean B.V. and Logistic Solution Intern. to Take Discovery of Chadbourne & Parke LLP, 2014 WL 5090028 (S.D.N.Y. Oct. 10, 2014). [173]   2014 WL 4181618 (S.D. Ohio Aug. 21, 2014) (quoting In re Certain Funds, Accounts, and/or Inv. Vehicles Managed by Affiliates of Fortress Inv. Grp. LLC, 2014 WL 3404955, at *2 (S.D.N.Y. July 9, 2014)). [174]   Id. at *3. [175]   Id.  [176]   In re Certain Funds, 2014 WL 3404955, at *4 (S.D.N.Y. July 9, 2014).
Gibson, Dunn & Crutcher's Transnational Litigation Practice Group lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact any member of the Gibson Dunn team, the Gibson Dunn lawyer with whom you usually work, or any of the following practice group co-chairs: United States: Randy M. Mastro - New York (+1 212-351-3825, rmastro@gibsondunn.com) Theodore J. Boutrous, Jr. - Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com) Scott A. Edelman - Los Angeles (+1 310-557-8061, sedelman@gibsondunn.com) Andrea E. Neuman - New York (+1 212-351-3883, aneuman@gibsondunn.com) William E. Thomson - Los Angeles (+1 213-229-7891, wthomson@gibsondunn.com) Perlette Michèle Jura - Los Angeles (+1 213-229-7121, pjura@gibsondunn.com) Europe: Philip Rocher - London (+44 20 7071 4202, procher@gibsondunn.com) Charlie Falconer - London (+44 20 7071 4270, cfalconer@gibsondunn.com) Patrick Doris - London (+44 20 7071 4276, pdoris@gibsondunn.com) © 2015 Gibson, Dunn & Crutcher LLP
Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.