The last two weeks of 2016 have seen a flurry of Foreign Corrupt Practices Act (FCPA) enforcement actions: a $519 million settlement against Israel’s Teva Pharmaceutical, an action in the billions against Brazilian construction conglomerate Odebrecht and its petrochemical unit, Braskem, and a $75 million settlement by Kentucky-based General Cable Corporation.
Teva’s December 22 settlement landed it in fourth place on the list of the ten biggest FCPA enforcement actions ever. Teva, the world’s largest manufacturer of generic drugs, was accused of violating the FCPA by hiring a Ukrainian government official as a consultant and by bribing government doctors in Mexico. The Teva managers responsible for overseeing compliance were allegedly “unable or unwilling” to enforce the company’s anti-corruption program.
On December 21, Odebrecht/Braskem was assessed a combined penalty worth an estimated $4.5 billion to resolve bribery charges with U.S., Brazilian and Swiss enforcement authorities. The U.S. Department of Justice (DOJ) stated that Odebrecht “systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents.” Odebrecht will pay ten percent of its final criminal fine to the United States, ten percent to Switzerland and ten percent to Brazil. The U.S. portion of the fine should therefore be approximately $450 million, which would put Odebrecht/Braskem in at least fifth place on the list of the top ten FCPA penalties. The exact final fine amount will be set during sentencing on April 17, 2017.
Finally, on December 29, General Cable entered into a $75.75 million settlement agreement with the DOJ and U.S. Securities and Exchange Commission to resolve FCPA violations in Angola, Bangladesh, China, Egypt, Indonesia and Thailand. The company, a producer of copper, aluminum and fiber optic wires, is alleged to have paid $13 million from 2002 to 2013 to third-party agents and distributors. At least some of the money was then allegedly used to bribe government officials to obtain business.
With the two latest entrants to the top-ten list, four of the ten largest FCPA enforcement actions ever were concluded this year, making 2016 an extremely busy – and lucrative – year for FCPA enforcement.