International Contracting/FCPA

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Our 33rd annual Ounce of Prevention Seminar has come to a close and was a great success. Thank you to all of our attendees and panelists who participated in the event, which covered a range of topics from investigations and cybersecurity to labor and employment. This year’s agenda particularly focused on how contractors are navigating the uncertainty and regulations of a new presidential administration.

Stay tuned for additional recap updates. You can browse the live tweets from the event by checking out the #cm2017oops hashtag on Twitter.  

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We’ve wrapped up our preview posts, which gave a sneak peek at just a few of tomorrow and Friday’s OOPS panels, including investigations, privacy and cybersecurity, international procurement, and cost and pricing issues.

It’s not too late to register for the event! Click here for details and directions.

We’ll see you tomorrow at the Renaissance Hotel in Washington, D.C.! The full agenda can be viewed here.

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The Trump Administration’s first 100 days shed little light on how it will reconcile an America First trade policy with insistence on more robust defense spending by our allies.  On May 5, 2017, at 8:30 AM Eastern, Crowell & Moring attorneys Adelicia Cliffe, Alan Gourley, Yuan Zhou, and Jana del-Cerro will lead a discussion highlighting some of the most significant areas caught in the cross-fire, and how – if at all – these areas may continue to be affected under the new Administration.  Specific topics include:

  • National Security reviews of Steel and Aluminum imports
  • Buy American and other domestic preferences
  • New Foreign Military Financing Guidelines
  • Sanctions and Continuation of Export Control Reform

For more information and to register for OOPS, please click here.

 

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The Government Contracts Group is counting down to Crowell & Moring’s 33rd annual Ounce of Prevention Seminar (OOPS), which will be held on May 4 and 5 at the Renaissance Hotel in Washington. This year’s seminar, “Strategizing for Government Contractors’ Game Plan Under the New Administration,” will provide insider insight and practical advice across a range of issues impacting government contractors and companies.

Check back here over the coming days, as some of our panelists will preview sessions on investigations, cybersecurity, recovery, cost and pricing, and international procurement.

For more information and to register for OOPS, please click here.

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On April 5, 2016, the Fraud Section of the Department of Justice’s Criminal Division launched a one-year pilot program under which companies can receive tangible credit for self-reporting violations of the Foreign Corrupt Practices Act. The rewards for self-reporting, cooperation and remediation can include avoidance of a corporate monitor, a substantial fine reduction, or declination of prosecution entirely.

In a memorandum released yesterday, Fraud Section Chief Andrew Weissmann highlighted recent enhanced enforcement efforts, including the 50% increase in FCPA Unit prosecutors, the establishment of three FBI International Corruption Unit squads devoted to FCPA investigations, and the further strengthening of cooperation with international law enforcement bodies.

Assistant Attorney General Leslie Caldwell said that incentivizing companies to self-report FCPA misconduct and cooperate by offering tangible benefits will also enhance the Fraud Section’s ability to prosecute culpable individuals. In this respect, the pilot program is a logical next step following the September 9, 2015, Individual Accountability memorandum issued by the Deputy Attorney General (“Yates Memorandum”).

In addition, AAG Caldwell stressed that the pilot program was part of DOJ’s ongoing effort to bring more transparency to the Department’s process of resolving FCPA cases, stating that transparency informs companies what conduct will result in what penalties and what sort of credit they can receive for self-disclosure and cooperation with an investigation. This, in turn, enables companies to make more rational decisions when they learn of foreign corrupt activity by their agents and employees.

Continue Reading And Now the Carrots: DOJ Announces FCPA Self-Reporting Pilot Program

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At 1:00 pm (Eastern) on January 17, 2013, Crowell & Moring attorneys Alan Gourley, Stephen Byers, Janet Levine and Kelly Currie will conduct a webinar on behalf of L2 Federal Resources entitled "The DOJ/SEC Resource Guide on the FCPA: Considerations for Government Contractors." The FCPA guidance provides a description of the key enforcement agencies’ view of the statute’s reach and will be essential to government contractors facing the daily challenge of anti-corruption compliance. In this 90 minute webinar, subject matter experts will provide you with key takeaways from the FCPA guidance, as well as their take on the government’s views.

Further details and registration information are available at http://l2federalresources.com/2013/new-fcpa-guide-considerations-for-government-contractors/.

L2 Federal Resources requires a registration fee for its webinars.

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Last week showed that U.S. Government contracting in Afghanistan is more problematic than ever. According to an October 27 audit report by the Special Inspector General for Afghanistan Reconstruction (SIGAR), U.S. government agencies, including DOD, State, and USAID, have paid nearly $18 billion to roughly 7,000 contractors for reconstruction work in Afghanistan; however, SIGAR is unable to determine who is being hired for what or the financial mechanisms used. Earlier this year, SIGAR was itself audited and got a failing grade on management and standards. Contractors, too, are reportedly failing according to another October 27 SIGAR audit showing that several Afghan National Police facilities recently built by U.S. Army Corps of Engineers contractors were so poorly constructed that they are unusable. All of this is likely to translate into more scrutiny for companies doing reconstruction work–assuming they are not forced out by President Karzai’s imminent ban on security contractors first.

President Karzai has yet to bow to international concerns regarding his intention to oust all security contractors, but he has relaxed his original December 17 deadline for their expulsion. On October 27, he announced that a special committee–led by the Ministry of Interior and including representatives of NATO and international donors–would prepare a timetable by November 15 for disbanding companies that guard development projects. Once each company is told its dissolution date, it will have up to 90 days to move out. Details are still sketchy, however, and the plans are likely to evolve significantly over the coming weeks.

Several development contractors are saying that, without security contractors, they will have no choice but to leave because there simply are not enough Afghan police or military officers to provided needed protection. Those that do leave may be faced with contract termination and a host of related legal consequences. Those that stay may have contract claims, tort claims, and Defense Base Act issues to contend with. Either way, the security, political, and legal environment for Afghan reconstruction contractors is fraught with practical and legal risk.

Watch this space for news about an upcoming Crowell & Moring event on these topics, featuring Ambassador Zalmay Khalilzad.

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Government contracts attorneys aren’t the only ones that are encountering more enforcement of anti-corruption regulations.  William Olsen, principal in the Economic Advisory Services practice at Grant Thonton (.pdf), has noticed a similar trend and so we asked him to tell us about his new book on the topic.
Hi Bill, can you tell us more about your new book “The Anti-Corruption Handbook: How to Protect Your Business in the Global Marketplace”?  Why did you write it?
The book begins with background on current corruption risks and the U.S. government’s efforts to fight it.  An important focus area involves measures that companies can take to build and enhance their compliance programs.  As companies increase their global  footprint, the likelihood of fraud and corruption increases.  We are seeing a greater level of enforcement of anti-corruption regulations on the federal level in the past year or two.  There are number of things that anyone can learn from the book that will help them understand the realities of working in global markets today as well as steps they can take to mitigate their risks.
What are the emerging risks of doing business in the global marketplace that could lead to fraud and corruption charges?
Emerging countries, such as Brazil, India and China as well as other in Asia, Central Europe and Latin America, are taking a greater role in the global financial markets,   All have diverse cultures, government structures, and economic systems. In order to penetrate new markets, businesses may be asked to engage in existing business practices, such as use of foreign agents, that can increase your exposure to Foreign Corrupt Practices Act (“FCPA”) violations, for example.
Corruption in some markets has inhibited the growth of free markets and destabilized governments.  Violations can seriously impact the bottom line for individual companies.  From a positive perspective, many non-government organizations (“NGOs”) and not for profit advocacy organizations have made great strides in fostering collective action to inhibit and punish corrupt acts.
How can businesses take proactive steps to deter corruption charges related to these emerging risks? 
Companies should re-examine their controls.  It is important to take a fresh look as the markets in which you are doing business, particularly if you have recently expanded operations internationally or if the risk profiles of countries where you are doing business may have changed.  You should take note of situations where your customers are government officials or where you are using foreign agents to help conduct business.  Controls designed to mitigate against corrupt acts should be built into the company’s enterprise-wide risk management program.
What are some ideas for improving your controls environment?  Enhance your system for background checks on new employees, separate duties among members of your finance and accounting departments (at headquarters and abroad), and implement strict, consistent guidelines around employment of subcontractors.  All companies should have a firm, clearly articulated code of conduct.  Sound planning and process implementation will pay off as you continue to grow the business internationally.