Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: How does Foreign Corrupt Practices Act (FCPA) enforcement factor into the Biden administration’s new anti-corruption strategy? Why did a UK court overturn a significant trial victory by the UK’s Serious Fraud Office (SFO)? What has contributed to France’s significant progress in foreign bribery enforcement over the last decade? The answers to these questions and more are here in our December 2021 Top 10 list.
On December 10, 2021, the UK Court of Appeal overturned the conviction of Ziad Akle, a former Unaoil executive sentenced to prison in July 2020 for engaging in a conspiracy to give corrupt payments in connection with oil contracts in the Middle East. The judgment criticized the UK SFO’s handling of the case, prompting the attorney general to launch an independent review. In particular, the Court of Appeal found that the SFO withheld evidence that, with the agency’s knowledge, an individual associated with Unaoil had pressured another defendant, Basil Al Jarah, to plead guilty in July 2019. Al Jarah’s guilty plea was later used as evidence at Akle’s trial. Characterizing the error as “a serious failure,” the Court of Appeal wrote that “neither the defence nor the judge had anything like the full picture which is now available to this court.” On December 20, 2021, Paul Bond, the former manager of Dutch energy services company SBM Offshore and Akle’s co-defendant, appealed his February 2021 conviction based on revelations from the Court of Appeal’s December 10 decision. The Unaoil case was a significant victory for the SFO, and we will keep an eye on what this setback means for the agency’s future cases.
Further demonstrating its anti-corruption commitment, on December 6, 2021, the Biden administration released the United States Strategy on Countering Corruption (the “U.S. Strategy”), which outlines several objectives and initiatives designed to combat corruption and related crimes within the United States and abroad. This action follows President Biden’s June 2021 memorandum establishing the fight against corruption as a core national security interest and calling for an interagency review to develop and recommend an anti-corruption strategy within 200 days. The U.S. Strategy is based on five pillars: (1) Modernizing, Coordinating, and Resourcing U.S. Government Efforts to Better Fight Corruption; (2) Curbing Illicit Finance; (3) Holding Corrupt Actors Accountable; (4) Preserving and Strengthening the Multilateral Anti-Corruption Architecture; and (5) Improving Diplomatic Engagement and Leveraging Foreign Assistance Resources to Advance Policy Objectives. Each of these pillars incorporates goals that seek to counter corruption on a global scale. The first law enforcement effort identified to advance pillar 3 is “Continuing to vigorously pursue the enforcement of foreign bribery cases through the FCPA, money laundering charges, and forfeitures for promoting corrupt schemes and laundering corruption proceeds as appropriate[.]” Another law enforcement effort highlighted to advance pillar 3 is “Establishing, through the Treasury, a pilot Kleptocracy Asset Recovery Rewards Program that will enhance the U.S. Government’s ability to identify and recover stolen assets linked to foreign government corruption held at U.S. financial institutions[.]” This signals an intent to move forward with the program established under the Kleptocracy Asset Recovery Rewards Act (KARRA), which was part of the December 2020 National Defense Authorization Act for Fiscal Year 2021. Consistent with longstanding policy, the U.S. Strategy also emphasizes, among many other tactics, the need to improve information-sharing and to coordinate international law enforcement efforts. To ensure accountability for the U.S. Strategy, federal departments and agencies, coordinated by the National Security Council, and in consultation with the National Economic Council and Domestic Policy Council, will report annually to the president on progress made against the Strategy’s goals.
On December 16, 2021, the OECD Working Group on Bribery released its Phase 4 evaluation of France’s implementation of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments. All parties to the Convention are subject to a rigorous peer-review process, Phase 4 of which focuses on the evaluated country’s enforcement of the Convention and considers the country’s particular challenges and positive achievements. According to the Working Group, “France has undertaken major legislative and institutional reforms since Phase 3 in 2012 and made significant progress in enforcing the foreign bribery offence.” The Working Group credited the 2016 Sapin 2 Act and other reforms as having allowed France to become “a credible counterpart in combating foreign bribery” and having “placed prevention and internal compliance measures at the heart of France’s policy for combating foreign bribery.” The Working Group welcomed “the significant increase in the number of investigations opened, as well as foreign bribery cases concluded (14 cases since 2012),” resulting in sanctions for 19 natural persons and 23 legal persons. The Working Group also noted that five cases had been resolved by using a non-trial resolution mechanism, which the Working Group generally encourages. Nevertheless, the Working Group expressed concern that the number of cases detected and resolved remains relatively low in light of France’s economic situation and trade profile and the number of foreign bribery allegations reported in the media. The OECD made a range of recommendations designed to preserve and expand France’s gains. As we have noted previously, France’s emergence as a serious player in this space could have a major impact on international law enforcement efforts.
On December 2, 2021, the Eastern District of New York granted a motion filed by the U.S. Department of Justice (DOJ) to dismiss with prejudice FCPA and other charges against Société Générale after the French bank successfully completed the terms of its three-year deferred prosecution agreement (DPA). In June 2018, the bank and one of its subsidiaries agreed to pay a combined total of $860 million in criminal penalties to resolve allegations by U.S. and French authorities that it bribed Libyan officials to secure investment management contracts from state agencies, including the Libyan Investment Authority, and that it manipulated LIBOR. This case was significant because it was the first-ever coordinated foreign bribery resolution between the United States and France.
In December 2017, the UK released a five-year strategy framework for tackling domestic and foreign bribery. \On December 31, 2021, the UK government issued its third annual update on the progress made against the UK Anti-Corruption Strategy 2017–2022 (the “UK Strategy”). The update noted the challenges posed by the COVID-19 pandemic and Brexit to advancing the anti-corruption agenda but concluded that the UK had nevertheless made significant progress across a number of the commitments made in the UK Strategy. Among the notable accomplishments from 2020 highlighted in the update are securing the commitment with all Crown Dependencies and inhabited Overseas Territories to implement beneficial ownership registers; extending the remit of the National Fraud Initiative and helping local authorities to undertake bank account and active company checks; securing endorsement from G20 ministers of a G20 Call to Action for countries to combat corruption in the COVID-19 response and recovery; and publishing a paper on procurement reform with specific proposals to further strengthen transparency and integrity across government. In sum, the update concludes that, of the 134 commitments made in the UK Strategy, the UK has completed 52 commitments and is on track to complete 68 more, with 14 commitments whose deadlines are at risk to be missed.
On December 9, 2021, the Isle of Man government launched the Anti-Bribery and Corruption Project to tackle the issues of money laundering, terrorist financing, and financial crime, which were identified in a National Risk Assessment carried out in 2020. Although the Isle of Man has been trying to combat corruption since 2013, when the Bribery Act of 2013 was passed, the Anti-Bribery and Corruption Project is designed to help the Isle of Man government identify where there may be potential gaps in its response and provide recommendations to public- and private-sector entities on managing the risks posed by bribery and corruption.
On December 2, 2021, DOJ announced that Luis Enrique Martinelli Linares (“Luis”), a citizen of Panama and Italy and the son of former Panamanian President Ricardo Alberto Martinelli Berrocal, had pleaded guilty in the Eastern District of New York to one count of conspiring to launder $28 million in connection with a bribery scheme involving a Brazilian construction company. DOJ announced Luis’s extradition from Guatemala in November 2021. On December 14, 2021, DOJ announced that Luis’s brother and co-defendant, Ricardo Alberto Martinelli Linares (“Ricardo”), also a citizen of Panama and Italy, pleaded guilty in the Eastern District of New York to the same charge after having been extradited from Guatemala just four days earlier. According to DOJ, Luis and Ricardo agreed to establish offshore bank accounts to conceal $28 million in bribe funds, which were “for the benefit of [their] close relative, a high-ranking public official in Panama.” DOJ first announced money-laundering charges against the brothers, as well as their arrests in Guatemala, in July 2020.
On December 15, 2021, the SFO announced that London’s Southwark Crown Court had ordered former oil company executive David Lufkin to forfeit over £140,000 following his guilty pleas to a total of 11 counts of bribery in February 2019 and January 2021. In pleading guilty, Lufkin admitted taking part in corruption schemes in Iraq, Saudi Arabia, and the United Arab Emirates between 2012 and 2018, for which he received a two-year suspended prison sentence. The Court gave Lufkin a more lenient sentence because he had entered into a formal cooperation agreement with the SFO that contributed to Petrofac’s £77 million resolution with the SFO in October 2021.
On December 13, 2021, Geneva’s chief prosecutor Yves Bertossa announced that, due to a lack of evidence, he was closing a criminal investigation into whether Juan Carlos, the former King of Spain, had accepted bribes in connection with a high-speed rail deal in Saudi Arabia. The case began in 2018, when claims surfaced that Saudi Arabia paid $100 million in potential kickbacks to Juan Carlos, via an account held at Swiss bank Mirabaud in the name of the Lucum Foundation (whose beneficiary is Juan Carlos), after the deal was awarded to a Spanish-Saudi consortium. Although Geneva prosecutors asserted that they could prove the funds were paid to and benefitted Juan Carlos, the chief prosecutor admitted they could not tie the $100 million payment to the contract award. Mirabaud was fined 50,000 Swiss francs for failing to disclose certain information in connection with the investigation, including suspicious account activity.
 Order of Dismissal, United States v. Société Générale S.A., Case No. 1:18-cr-00253-DLI, Doc. No. 16 (E.D.N.Y. Dec. 2, 2021).