These Days Everybody Has Long Arms: Global Jurisdiction for Criminal Offenses and International Double Jeopardy

The opinions expressed in this presentation are those of the panelist and do not reflect the opinions, practices nor policies of the Panelists' respective employers, nor do they constitute legal advice.

ABA Annual Meeting: Friday, August 9, 2013 (San Francisco, CA)

Note: The opinions expressed in this presentation are those of the presenters and do not reflect the opinions, practices nor policies of the presenters' respective employers, nor do they constitute legal advice.

• Tyler Hodgson, Partner, Borden Ladner Gervais (moderator)• Andrew S. Boutros, Assistant US Attorney, USAO – NDIL (panelist – in

his personal capacity)• T. Markus Funk, Partner, Perkins Coie (panelist)• El Cid Butuyan, The World Bank (panelist)

FCPA Enforcement Overview and TrendsAndrew S. Boutros, AUSA, USAO – NDIL (Chicago)

T. Markus Funk, Partner, Perkins Coie

Anti-bribery Provisions: The FCPA prohibits:1. Giving or offering;2. Anything of value;3. To a foreign government official, political party, or party

official;4. With the corrupt intent to influence that official in his or

her official capacity; and5. To secure an improper advantage in order to obtain or

retain business.Accounting Provisions: “Issuers” must maintain accurate books and records and reasonably effective internal controls

FCPA Primer

2008 - 2012Company Country DOJ & SEC Rank Year

• Siemens Germany $800 mm 1 2008

• KBR/Halliburton *USA* $579 mm 2 2009

• BAE Systems UK $400 mm 3 2010

• Total S.A. France $398.2 mm 4 2013

• Snamprogetti/ENI Holland/Italy $365 mm 5 2010

• Technip SA France $338 mm 6 2010

• JGC Construction *USA* $218.8 mm 7 2011

• Daimler Germany $185 mm 8 2010

• Alcatel-Lucent France $137.4 mm 9 2010

• Magyar Telekom/ Hungary/ $95 mm 10 2011Deutsche Telekom Germany

• Panalpina Switzerland $81.9 mm 11 2010

• Johnson & Johnson *USA* $70.1 mm 12 2011

Top Rankings – Big Numbers

Dodd-Frank Whistleblower Reward Provisions

Rewards individuals who provide tips to the SEC leading to enforcement actions that exceed $1 million in sanctions

Whistleblowers can earn a payout of 10% to 30% of any monetary sanctions collected

Tipster must voluntarily provide “original information” about a possible federal securities law violation that has occurred, is ongoing, or is about to occur

120-day rule Anti-retaliation protections for employee-whistleblowers, including

a cause of action in federal court; reinstatement; double back pay with interest; and litigation reimbursement

Transparency International Corruption Perceptions Index

Scale of 1 (poor reputation) to 10 (good reputation)

Putting Global Bribery (and Enforcement) Into Perspective

Coming to Grips with the New Enforcement Reality: “Carbon Copy” ProsecutionsAndrew S. Boutros, AUSA, USAO – NDIL (Chicago)

T. Markus Funk, Partner, Perkins Coie

“Consecutive prosecutions/investigations by multiple jurisdictions for same conduct”

Four Elements:1. Jurisdiction A

2. Files an enforcement action

3. Based on charging document/guilty plea/admissions

4. From Jurisdiction B

So what is a “Carbon Copy” Prosecution?

The Halliburton Case StudyThe Halliburton Case Study

• 2009 Oilfield giant Halliburton settles with US authorities

($579 million) Bonny Island bribe matter involving former subsidiary KBR

• December 7, 2010 Nigerian anticorruption authorities file 16-count

criminal complaint against Halliburton, related companies, and executives (including former V.P. and Halliburton CEO Cheney

Seek extradition of individual defendants Two weeks later – Halliburton settles case

Total, S.A. Charged in US and FranceTotal, S.A. Charged in US and France• May 29, 2013

– USA: French oil and gas Company, Total, S.A., pays combined $398.2 million to US authorities to resolve FCPA, B&R, and internal control charges DOJ: $245.2 mm criminal penalty; criminal information; 3-year

DPA; 3-year independent corporate compliance monitor; and agreement to cooperate with DOJ and foreign law enforcement

SEC: $153 mm in disgorgement and prejudgment interest; and cease-and-desist order

– France: Announced it requested Total, Total’s Chairman, and two others be referred to French Criminal Court for prosecution, including for France’s foreign bribery law

DOJ Press Release – Total’s ProsecutionDOJ Press Release – Total’s Prosecution

–“Today we announce the first coordinated action by French and U.S. law enforcement in a major foreign bribery case,” said Acting Assistant Attorney General Raman. “Our two countries are working more closely today than ever before to combat corporate corruption, and Total, which bought business through bribes, now faces the criminal consequences across two continents.”

–“The department also acknowledges and expresses its deep appreciation for the cooperation and partnership of French law enforcement authorities.”

But, French Criminal Court AcquitsBut, French Criminal Court Acquits• July 9, 2013

– French Criminal Court acquits Total and 18 individuals, including Total CEO

• Total faced a fine of up to 1.88 million euros ($2.4 million)

• Total’s CEO was charged with complicity in misusing company assets and faced five years of prison and a fine of 375,000 euros

– Total argued that OFFP was run by middlemen, that system was complex and opaque, and company lacked knowledge

– Reuters reported that “prosecutors struggled to identify which Total executives might have been aware of how the U.N. program was being illegally manipulated and whether they had given orders to participate regardless”

Shell• $48.1 million to DOJ and SEC• $10 million to Nigerian government

Snamprogetti/ENI• $365 million to DOJ and SEC• $32.5 million to Nigerian government

BAE Systems• $400 million to DOJ• £30 million (~$46.5 million) to UK’s SFO (simultaneously)

Innospec • $27.5 million to DOJ, SEC, OFAC• £8.5 million (~$12.7 million) to UK’s SFO (simultaneously)

Other ExamplesConsecutive prosecutions/investigations by multiple jurisdictions for same conduct

Other Examples (cont.)

Alcatel-Lucent• $137.4 million to DOJ and SEC• $10 million to Costa Rican government

JGC Corporation• $218.8 million to DOJ million to DOJ• $28.5 million to Nigerian government

Siemens • $800 million to DOJ and SEC• $569 million to Munich Prosecutor (simultaneously)• $46.5 million to Nigerian government• $336 million to Greek government• $100 million to World Bank Group

Hard to Later “Change Tune”Hard to Later “Change Tune”

DOJ and (now) SEC require admission, acceptance, or acknowledgement of corrupt conduct in NPAs, DPAs, plea agreements, and settlements Note: SEC requires this only in parallel DOJ resolutions

Standard plea/NPA/DPA language strictly bars company from later taking public position contradicting factual basis (DOJ decides)

Consider also . . . Mandated Cooperation with US and Foreign Authorities

Data Systems & Solutions (ED Va 2012)• “[S]hall also cooperate fully with other domestic or foreign law

enforcement authorities and agencies” Alcatel-Lucent (SD Fla 2010)

• “[Must c]ooperate fully with such other domestic or foreign law enforcement authorities and agencies, as well as Multilateral Development Banks, in any investigation of Alcatel-Lucent”

Shell (SD Tex 2010)• “[Shall c]ooperate fully with other domestic or foreign law

enforcement authorities and agencies…in any investigation of [Shell]”

Key Strategic ImplicationsKey Strategic Implications

1. Simultaneous multi-district disclosure?Must gauge likely reaction of U.S./foreign authoritiesGlobal settlement or multi-front war?Dissuade US or foreign authority from prosecuting?

2.Double Jeopardy Implications?US doesn’t recognize international double jeopardy (but

others do – see UK and BAE case)

3.Collateral Estoppel (“issue preclusion”) impact?Foreign proceedings fair, impartial, compatible with US

conceptions of justice? (Civil and criminal cases)No final acquittal/conviction required

The World Bank and Cross-DebarmentsEl Cid Butuyan, Senior Litigation Specialist, World Bank

International Double JeopardyTyler Hodgson, Partner, Borden Ladner Gervais LLP

Different theories of criminal jurisdictionDifferent theories of criminal jurisdiction

1. Territorial2. Universal3. National4. Passive Personality5. Protective

US v. Clark, 435 F. 3d 1100 (9th Cir. 2006)

Presumption Against ExtraterritorialityPresumption Against Extraterritoriality

1. Presumption against extraterritoriality: “The legal presumption that Congress ordinarily intends federal statutes to have only domestic application” (US v. Clark)

Can be overcome by evidence that Congress intended law to apply

extraterritorially.

2. If overcome, extraterritorial application must not offend any principle of international law

US v. Neil, 312 F. 3d 419 (9US v. Neil, 312 F. 3d 419 (9thth Cir. 2002) Cir. 2002)

• Grenadian defendant employed on Carnival cruise ship with Panamanian registration.

• Sexually assaults 12 year old American citizen in Mexican territorial waters

• Cruise departed and returned from port in California• Defendant argued that US did not have extraterritorial

jurisdiction over the crime

Principles of international law relied upon by Court in Principles of international law relied upon by Court in NeilNeil

1. Passive Personality PrincipleCrimes committed against a country’s nationals

2. Territorial principle “ Under the territorial principle, the United States may assert jurisdiction when acts performed outside of its borders have detrimental effects within the United States.”

Traditional application of territoriality principleTraditional application of territoriality principle

“All crime is local. The jurisdiction over the crime belongs exclusively to the country where the crime is committed”

-Lord Chancellor Halsbury, Makin v. AG for New South Wales (1891)

Evolution of territoriality principleEvolution of territoriality principle

• Terminatory theory or “last acts” doctrine

• Comity theory of jurisdiction (UK)

• Real and substantial connection (Canada)

• Effects doctrine (UK)

Exclusive v. Concurrent JurisdictionExclusive v. Concurrent Jurisdiction

What happens if more than one country seeks to punish the same conduct?

- Legislative Summary, Corruption of Foreign Public Officials Act (Canada)

Exclusive vs. Concurrent JurisdictionExclusive vs. Concurrent Jurisdiction

Person previously tried outside Canada

5 (4) If a person is alleged to have committed an act or omission that is deemed to have been committed in Canada under subsection (1) and they have been tried and dealt with outside Canada for an offence in respect of the act or omission so that, if they had been tried and dealt with in Canada, they would be able to plead autrefois acquit, autrefois convict or pardon, they are deemed to have been so tried and dealt with in Canada.

Corruption of Foreign Public Officials Act

x

Different approaches to double jeopardy: the United Different approaches to double jeopardy: the United KingdomKingdom

“[A] final determination in a Court having competent jurisdiction is conclusive in all Courts of competent jurisdiction. Therefore if A, having killed a person in Spain, were there prosecuted, tried and acquitted, and afterwards were indicted here, at Common Law, he might plead the acquittal in Spain as a bar”

- Captain Roche’s Case (1775)

“The common law doctrine of autrefois convict or autrefois acquit…has always applied whether the previous conviction or acquittal based on the same facts was by an English court or a foreign court.”

- Lord Diplock, Treacy v. DPP, [1971] 1 All ER

Successive prosecutions for same conduct: the Successive prosecutions for same conduct: the American approachAmerican approach

The dual sovereignty doctrine

United States v. Richardson, 580 F. 2d 946 (9th Cir. 1978)Health v. Alabama, 474 U.S. 82 (1985)United States v. Rezaq, 134 F. 3d 1211 (1998)

Carbon copy prosecutions

Global prosecutions, global resolutionsGlobal prosecutions, global resolutions

American vs. British approach to double jeopardy

Simultaneous engagement of different national authorities:

• R. v. Griffiths Energy, [2013] A.J. No. 412 (QB)• SEC v. Stanko J. Grmovsek; OSC v. Grmovsek

Questions?