In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: What recent action did President Biden take to signal U.S. commitment to international anti-corruption enforcement? What was the first corporate Foreign Corrupt Practices Act (FCPA) resolution of 2021? What was the OECD’s assessment of Turkey’s foreign bribery enforcement record? The answers to these questions and more are here in our June 2021 Top 10 list.
On June 3, 2021, President Biden issued a National Security Study Memorandum establishing the fight against corruption as a core national security interest. The memorandum signals the Biden administration’s commitment to leading international efforts to combat global corruption, which President Biden said “eats away at the foundations of democratic societies.” Key provisions of the memorandum include a directive that several government agencies, including the U.S. Department of Justice (DOJ), National Security Agency (NSA), and Department of State, must engage in an interagency review to develop and recommend an anti-corruption strategy within 200 days. According to the Fact Sheet released with the memorandum, the strategy should focus on (1) modernizing, coordinating, and resourcing efforts to better fight corruption, (2) curbing illicit financing, (3) holding corrupt actors accountable, (4) building international partnerships, and (5) improving foreign assistance. Although the memorandum does not cite specific statutes, several of its strategic priorities are consistent with DOJ’s current FCPA and kleptocracy enforcement strategies, as well as the United States’ work with multilateral institutions such as the OECD Working Group on Bribery, and could lead to increased resources and enforcement. The memorandum further highlights the Biden administration’s focus on combatting global corruption and comes less than a month after the president issued a long-awaited and far-reaching executive order (E.O.) targeting Russian malfeasance, including election interference, cyber-enabled activities, and corruption. (For more on the E.O., see our article here.)
On June 25, 2021, John Wood Group PLC (“Wood”) announced that Amec Foster Wheeler Energy Limited (AFWEL), a subsidiary of Wood that it had acquired in 2017, had reached a $177 million global settlement with DOJ, the U.S. Securities and Exchange Commission (SEC), the UK Serious Fraud Office (SFO), and Brazilian authorities to resolve respective bribery and corruption investigations into AFWEL. AFWEL admitted (1) its involvement in a bribery scheme to obtain a $190 million Brazilian oil and gas design contract from Petrobras and (2) its use of corrupt third parties, including an Italian sales agent affiliated with a Monaco-based intermediary company, to pay bribes to decision-makers at Petrobras. AFWEL agreed to enter into a three-year deferred prosecution agreement (U.S. DPA) with DOJ, filed in the Eastern District of New York, pursuant to which AFWEL agreed to pay $18.375 million for conspiring to violate the FCPA’s anti-bribery provisions, to be offset by approximately $10.7 million in payments to UK and Brazilian authorities. AFWEL also consented to an SEC cease-and-desist order, which requires the company to pay $22.7 million in disgorgement and prejudgment interest, to be offset by approximately $12.6 million in total disgorgement paid to UK and Brazilian authorities. AFWEL also entered into a DPA with the SFO (UK DPA). Under the terms of the UK DPA, AFWEL will pay a total of £103 million for the use of third-party agents for bribery and corruption in five countries. In addition, Wood entered into 18-month leniency agreements with three Brazilian authorities, the Ministerio Público Federal (MPF), Comptroller General’s Office (CGU), and the Solicitor General (AGU).
In a June 2, 2021 securities filing, Avianca Holdings S.A. disclosed that SEC had notified the company that it had closed its investigation into alleged irregular grants of free and discounted airline tickets and upgrades to various countries’ government employees. The company previously announced in an August 15, 2019 securities filing that it had commenced an internal investigation and voluntarily disclosed the investigation to SEC and DOJ.
On June 23, 2021, a judge in the Eastern District of New York granted DOJ’s unopposed motion to dismiss FCPA charges against Keppel Offshore & Marine Ltd. In December 2017, the company entered into a DPA with DOJ to resolve allegations that it and its U.S. subsidiary had paid over $55 million in bribes to Brazilian officials to win contracts with Petrobras, Brazil’s national oil company, and another Brazilian entity. In moving for dismissal, DOJ informed the court that the company had fully met its obligations under the DPA, including providing full cooperation, implementing an enhanced compliance program, satisfying its self-reporting requirements, and timely paying its approximately $105 million monetary penalty.
On June 23, 2021, SEC announced that it had obtained a final judgment against Asante Berko, a former executive at the London subsidiary of a New York-based financial services company. In April 2020, SEC announced that it had filed a complaint against Berko in the Eastern District of New York, alleging that he participated in a scheme to pay at least $2.5 million in bribes to Ghanaian government officials to help his company’s client, a Turkish energy company, win approval for a power plant project in the Republic of Ghana, in violation of the FCPA. Berko resolved the case without admitting or denying the SEC’s charges and disgorged $275,000 and paid approximately $54,000 in prejudgment interest.
On June 17, 2021, the UK SFO announced that it had secured a £402,465.65 confiscation order by consent against Basil Al Jarah, a former Unaoil executive. Al Jarah was sentenced to three years and four months’ imprisonment in October 2020, following his July 2019 guilty plea to five counts of conspiracy to make corrupt payments. The SFO alleged that Al Jarah and others paid over $17 million in bribes to public officials in Iraq to secure $1.7 billion worth of oil and offshore construction contracts. The court found that Al Jarah made over £3.3 million as a result of the bribery scheme and required him to pay the confiscation amount within three months, or face a further three years in prison. In July 2020, Al Jarah’s co-defendants, Ziad Akle and Stephen Whiteley, were convicted by a jury on related charges.
On June 16, 2021, the World Bank announced a two-year debarment of Zhejiang First Hydro & Power Construction Group Co. in connection with allegedly fraudulent and corrupt practices under the Guangzi Laibin Water Environment Project in China, designed to reduce flood risks and improve drainage in Laibin city. According to the World Bank, the company’s agent and subcontractor paid bribes to two government officials in exchange for a contract. The World Bank stated that the company’s reduced period of debarment with conditional release was a result of its extraordinary cooperation and voluntary remedial actions. The company is subject to cross-debarment by other multilateral development banks (MDBs) under the 2010 Agreement for Mutual Enforcement of Debarment Decisions.
In June 2021, allegations surfaced linking Brazil’s president, Jair Bolsonaro, to corruption in the country’s efforts to secure COVID-19 vaccines. Brazil’s Senate is reportedly investigating alleged irregularities in the Brazilian Health Ministry’s contract to purchase 20 million doses of a COVID-19 vaccine from an Indian vaccine manufacturer. Bolsonaro also reportedly fired the head of the Health Ministry’s logistics department in June 2021 for allegedly asking a U.S.-based vaccine distributor to inflate the prices of COVID-19 vaccine doses by $1 each in order to create a mark-up that could be siphoned off. Many international corruption watchdogs have warned about the possibility of COVID-19 related corruption (see, for example, the OECD Working Group on Bribery’s April 2020 warning), and this is not the first time that a Brazilian official has been accused of diverting public funds intended to fight the coronavirus. (See, for example, the October 2020 reports of a Brazilian senator caught during a police investigation hiding public funds in an unusually private location.) Nevertheless, given Bolsonaro’s high profile and the frequent corruption prosecutions of Brazilian presidents and ex-presidents (see, for example, our most recent coverage of the prosecutions of former president Luis Inácio Lula da Silva), these reports are worth monitoring.
On June 29, 2021, the OECD Working Group on Bribery urged Turkey to implement key reforms to increase its fight against foreign bribery. According to the Working Group, Turkey has a very low level of enforcement of its foreign bribery offense, having failed to ever successfully conclude a foreign bribery case. The Working Group also expressed concerns that Turkey has failed to take sufficient steps to protect the independence of prosecutions, strengthen corporate liability legislation, and protect whistleblowers. The OECD’s announcement followed meetings between Turkey and a High-Level Mission of the Working Group, led by the Working Group Chair and including delegates from Colombia, Germany, New Zealand, Russia, Sweden, and the United States.
On June 2-4, 2021, the United Nations General Assembly held a special session to address challenges and measures to prevent and combat corruption, and strengthen international cooperation. The three-day special session consisted of plenary meetings to allow governments and the international community to discuss the advancement of the global fight against corruption, identifying the threat to the stability and security of societies and the impact on economic growth. A key development from the session was the adoption of a political declaration titled “Our common commitment to effectively addressing challenges and implementing measures to prevent and combat corruption and strengthen international cooperation” by heads of state and government, ministers and representatives of Member States, and parties to the UN Convention against Corruption. Reaffirming their commitment to tackle bribery, money-laundering and other related crimes, the parties pledged to increase efforts aimed at strengthening preventive measures that reach all levels of society and economic sectors, as well as increasing transparency and accountability in the management of public finances and government procurement, including public-private partnerships. Furthermore, the parties reiterated their commitment to criminalizing, investigating, and prosecuting acts of corruption and related offences. Separately, on June 17, 2021, the United Nations Global Compact, a United Nations initiative, published a report titled “Uniting against Corruption: A Playbook on Anti-Corruption Collective Action” designed to help companies work with others to fight corruption. Through a six-step approach, the playbook is designed to enable companies to diagnose their local corruption landscape, identify and engage stakeholders, and apply the “Collective Action methodology” to address identified corruption challenges and to mitigate potential business risks.
Stephanie Pong, a trainee solicitor in our London office, contributed to the writing of this alert.
 United States v. Keppel Offshore & Marine Ltd., 17-cr-00697-KAM, ECF No. 13 (E.D.N.Y. June 23, 2021).