Online CLE FCPA Enforcement

Online CLE FCPA Enforcement

Joseph A. Spinelli, Senior Managing Director
Ankura

• Enhanced Due Diligence- A must for the Oil & Gas Industry
• Proactive Compliance Steps for Energy Companies Doing Business Internationally & Compliance Guidance
• Identifying the Risks Associated with Energy Companies Doing Business Internationally
• Trends and Patterns of FCPA Enforcement – 2018

Peter Turecek, Partner
Control Risks

• As we see some consolidation in the energy sector and some M&A plays, new DOJ guidelines just out note that misconduct found during “thorough and timely due diligence”, voluntarily disclosed and with consistent remedial actions taken—the DOJ will have a presumption of a declination (though not guaranteed).
• Failure to adhere to FCPA’s books and records and internal controls provisions seems to be a recurring theme of recent enforcement actions involving energy companies, despite a number of actions stemming from incidents up to 10 years earlier.  The establishment, adherence to and testing of compliance policies is critical and is the low hanging fruit opportunity for energy companies to head off issues.  It still holds true that almost the worst thing you can do is have policies and procedures in place and not be following them!
• The biggest stumbling block, ESPECIALLY in the energy sector, particularly oil and gas companies operating internationally, seems to be activities involving agents/sales reps.  We’ll have some discussion around APPROPRIATE due diligence on these critical resources. (Hint--light compliance screening just doesn’t cut it, leading to a discussion around screening v. investigative methodologies.)
• And as always, tone from the top and enforcement from the top is critical to avoiding FCPA issues—both messaging and DEMONSTRATING through actions are critical to appropriate management of FCPA risks.

Anne Hukkelaas Gaustad, Partner
Hughes Hubbard & Reed LLP

• Statistics: 2010 to 2015 extractive sector accounted for 40% of enforcement actions, and in the last five years we observe that the energy sector continues to be an area of focus for international regulators
• Continued focus on energy sector, but private companies not the only ones that are subject to inquiries:
  • The energy and mining sectors continue to attract significant attention from international enforcement authorities (including DOJ/SEC, SFO, Dutch, Italian and Nigerian regulators to mention a few))
  • These cases appear to have a broader focus than before, notably through focus on the activities of state-owned companies (with Brazil’s Petrobras and Venezuela’s PDVSA being the most obvious examples of this trend. 
  • Focus on prosecution of individuals and government officials (see in particular the PDVSA-related cases), the latter on the basis of AML-statutes and other statutes
  • PDVSA is also an interesting example because it is one of the cases where economic sanctions and FCPA concerns overlap (sanctioned entity on the basis of corrupt activity)
  • We also see that the commodities trading companies are the subject of increased focus (see for example the recent interest taken into FCPA violations by the CFTC’s Division of Enforcement in its March 2019 Enforcement Advisory)
  • Significant international cooperation in these cases
• Notable cases: Petrobras (and cases other cases arising out of the Petrobras-affair), PDVSA, Shell, Rolls Royce, Unaoil, Halliburton, SBM, Keppel Offshore, ENI investigation, Electrobras, Linde (declination)
• Compliance Issues and Solutions: Increasingly complex regulations for energy companies, increasing obligations to contribute to local development and CSR initiatives (qualifications of local leaders as public officials, tribal leaders), continued lack of transparency in a range of countries, local content requirements continue to present significant challenges (many countries are seeking to develop more stringent local content requirements, including Congo and Uganda), of on-shore operations, a lot of talk of due diligence initiatives but little advance on this.
• Mitigate risks: continued focus on third-party due diligence, industry-wide initiatives
• Future of FCPA enforcement in energy sector: likely continued high level of enforcement across countries given the high level of regulation and strategic interest of the sector for most countries.

Online CLE FCPA Enforcement

Joseph A. SpinelliSenior Managing DirectorAnkura

Joseph A. Spinelli is a Senior Managing Director at Ankura, based in New York. He has been a preeminent leader in multiple fields, including white collar crime investigations, anti-bribery and corruption, Foreign Corrupt Practices Act (FCPA) risk management, monitorships, and criminal investigations. He served as the first ever inspector general of New York State, and a special agent in the Federal Bureau of Investigation (FBI). In addition, he has served as a national partner in charge for several practices at a Big Four firm.

Anne Hukkelaas GaustadPartnerHughes Hubbard & Reed LLP

Anne Hukkelaas Gaustad is a partner based in our Paris office and assists clients on matters including anti-corruption compliance, corporate governance, corporate social responsibility, and securities laws, with particular experience in the design and implementation of anti-corruption compliance programs, conducting internal reviews and third-party due diligence, and assessing risks under international and national anticorruption frameworks.  Her recent experience includes the global risk assessment and compliance review of a multinational “supermajor” oil company, the risk assessment and development of compliance policies and procedures for a multinational automotive company, advising on insider trading issues for a large sovereign wealth fund, and assisting with anti-corruption matters involving the World Bank Group. Anne is a graduate of Université Panthéon-Assas Paris II, Oxford University and New York University School of Law. Anne is admitted to the Norway, Paris, New York and District of Columbia bars.  She is fluent in Norwegian, English, French, and Danish, and is proficient in German.

Peter TurecekPartnerControl Risks

Peter Turecek is a Partner in Control Risks’ Compliance, Forensics and Intelligence Practice in the Americas region, with an emphasis on investigative due diligence, business intelligence, corporate contests and multinational investigations. He also conducts a variety of other investigations related to litigation support, asset searches, employee integrity, and securities fraud. Pete has over 24 years of experience in the industry and works for a variety of clients, including major financial institutions, private equity and law firms, corporations and high-net-worth individuals and family offices.

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