If you cannot hear us speaking, please make sure you have called the teleconference number on your invitation. US participants: 1 800 909 4147Outside the US: +1 212 231 2914The audio portion is available via conference call. It is not broadcast through your computer.*This webinar is offered for informational purposes only, and the content should not be construed as legal advice on any matter.

Wednesday, June 3, 2015

FCPA ENFORCEMENT: TRENDS FACING ENERGY COMPANIES

CURRENTLY SPEAKING

DLA PIPER PRESENTERS

2

Robert AlessiUS Vice-Chair, Energy Sector; Partner New York

Partner Washington, D.C.

PartnerChicago

Deborah R. Meshulam Chair, Securities Enforcement Practice

More than two decades of securities enforcement defense experience

Former prosecutor for the SEC

Conducts investigations on behalf of public companies or their audit committees relating to: FCPA questions

accounting issues

alleged securities law violations

employee misconduct

Thomas D. Shakeshaft Served for more than a decade as an Assistant U.S. Attorney in Chicago

Provides defense in global investigations and large-scale, high stakes litigation

Experienced trial attorney and commercial litigator

Has investigated, prosecuted and tried a wide range of federal crimes on behalf of the Justice Department, including: fraud

racketeering

public corruption

narcotics

money laundering

3

Introduction: What is the Foreign Corrupt Practices Act?

Makes it illegal for any US person, US company, issuer, anyone acting on their behalf (whether a US person or not), or anyone on US soil to bribe a foreign official or foreign political party for the purpose of obtaining or retaining business

Imposes accounting and record-keeping requirements on companies registered on any US stock exchange, including foreign companies, and on any companies who are required to file reports pursuant to the Securities Exchange Act

4

Today’s Agenda

FCPA Enforcement Trends and Energy Companies

FCPA Overview

Risks for Energy Sector Companies and their Executives and Compliance Personnel

Strategies For Minimizing FCPA Risk

Handling FCPA Issues

3

5

Enforcement Trends

6

Trend No. 1: Unrelenting FCPA Prosecutions and Investigations

Year Agency Total FCPA Action Energy/Energy Related

2012 DOJ 13 4SEC 12 5

2013 DOJ 23 10SEC 8 3

2014 DOJ 21 6SEC 9 1

Energy and energy related companies remain a key focus of corruption investigations

Most recent SEC FCPA case brought against a global energy company Several known ongoing SEC/DOJ FCPA investigations against energy

companies

*Derived from SEC and DOJ websites

7

Trend 2: Increase in Corporate Penalties

A series of high profile enforcement actions have resulted in total corporate penalties of $1.566 billion for 2014, the second highest on record

Average corporate fines and penalties in 2014 was $156.6 million, the highest average in history.

Total penalties imposed against companies in FCPA matters enforced by the DOJ amounted to: $142,040,000 in 2012; $420,000,000 in 2013; and

$1,250,000,000 in 2014 The corresponding amounts for SEC civil penalties, disgorgement and prejudgment

interest: $117,938,568 in 2012; $300,000,000 in 2013; and

$327, 000,000 in 2014 Energy and energy related companies are among those most penalized

Highest FCPA sanction in 2014 assessed against an energy company Of the top 10 highest FCPA fines, 5 related to energy

Trend 3: DOJ Issues FCPA Resource Guide

In 2012, the DOJ and SEC issued long-awaited guidance on the FCPA, A Resource Guide to the U.S. Foreign Corrupt Practices Act.

What the Guide does: Provides an overview of the key areas of the FCPA currently being

litigated, some trends in FCPA enforcement actions, and the impact of recent case law. It does not constitute binding rules or regulations.

Reiterates the government’s expansive view on the type of conduct that will trigger territorial jurisdiction under the FCPA - a view not truly tested and one that courts have criticized in analogous contexts.

Reaffirms that willfulness is not required to establish corporate criminal liability. Only proof of corrupt intent must be shown.

8

DOJ Issues FCPA Resource Guide

What the Guide does not do:

Provide a bright-line test to determine what “instrumentalities” of a foreign government qualify as foreign officials under the FCPA.

Stops far short of endorsing a compliance defense similar to the one found under the UK Bribery Act.

Blanket protection for acquiring companies.

9

10

Trend No. 4: The Long Arm of United States Law Knows Few Boundaries

The FCPA’s anti-bribery provisions apply to “any person” who commits any act in furtherance of a bribe “while in the United States or its territories.”

“Any person” includes non-US persons and corporations.

Broad view by SEC and DOJ that US has jurisdiction under FCPA “whenever a foreign company or national causes an act to be done within the territory of the United States by any person acting as that company’s or national’s agent”* - some courts have criticized this expansive view.

*US Department of Justice, Criminal Resource Manual, §1018 (Nov. 2000)

Trend No. 5: Leveraged Investigations

Identification of one violator leads to another who does business with the violator

Identifying issue at one company leads to investigation of other companies in same sector

11

Leveraged Investigations: Panalpina World Transport

In charging documents, Panalpina World Transport (Holding) Ltd., a Swiss freight forwarder and customs clearance provider, and its U.S.-based subsidiary, Panalpina Inc., admitted that the companies, through subsidiaries and affiliates (together, “Panalpina”), engaged in a scheme to pay bribes to numerous foreign officials on behalf of many of its customers in the oil and gas industry. The DOJ and the SEC alleged that Panalpina paid $49 million in

bribes to foreign government officials in a number of countries to circumvent local customs processes.

The SEC alleged that Panalpina acted as an agent for certain of its issuer-customers and violated the FCPA by masking the true nature of bribe payments in invoices submitted to its issuer customers that allowed the customers to then violate the FCPA.

12

Panalpina (cont.)

Panalpina admitted that between 2002 and 2007, it paid thousands of bribes totaling at least $27 million to foreign officials in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan.

The DOJ and Panalpina World Transport agreed to resolve the charges by entering into a deferred prosecution agreement.

Panalpina Inc. agreed to plead guilty to the charges and paid a $70.56 million criminal penalty.

Thereafter, six customers of Panalpina were charged by the SEC and DOJ. Total combined payments were almost $237 million.

13

14

Trend No. 6: Surge in Individual Actions

• The number of actions against individuals remained high in 2014, with 14 individuals charged; 4 related to two separate energy companies

• 2 co-CEOs• Former general counsel• Former principal vice

president/general manager.

Individual Actions: PetroTiger Executives

On January 6, 2014, the DOJ announced FCPA and other charges against Knut Hammarskjold, Joseph Sigelman, and Gregory Weisman, the former co-CEOs and general counsel of B.V.I oil and gas company PetroTiger Ltd.

The PetroTiger defendants allegedly made four payments totaling more than $330,000 to an official of Ecopetrol S.A., a Colombian state-owned petroleum company, in exchange for the official approving a nearly $40 million oil services contract for PetroTiger.

Weisman agreed to plead guilty to conspiracy in 2013.

Hammarskjold was arrested at the airport in Newark on November 20, 2013 and subsequently agreed to plead guilty to conspiracy in February 2014.

15

Individual Actions: PetroTiger Executives, (cont.)

Sigelman was arrested in the Philippines on January 3, 2014, and pleaded not guilty. The DOJ indicted him for FCPA bribery, wire fraud, money laundering, and conspiracy.

In July 2014, Sigelman moved to dismiss two counts of the indictment, alleging that the DOJ improperly joined unrelated offenses - kickback and bribery - in the same counts. The U.S. District Court for the District of New Jersey denied Sigelman’s motion.

In September 2014, Sigelman moved to suppress evidence the government obtained from Weisman on the ground that it was either privileged or was obtained in violation of the Due Process Clause. Specifically, Sigelman argued that the DOJ used Weisman (who was Sigelman’s personal attorney in addition to PetroTiger’s general counsel) as a secret informant to report on and record his conversations.

In December 2015, the court held a hearing on Sigelman’s motions and denied nearly all of them.

Sigelman’s trial is set for 2015.

Sentencing for Weisman and Hammarskjold has been pushed back into 2015 because the government expects them both to testify at Sigelman’s trial.

16

17

Trend No. 7: International Hot Spots

China From 2005 through 2014, there were 62 enforcement actions involving China.

Impacted industries include: Automotive, healthcare, telecommunications

Examples of violative conduct: Sightseeing trips, expensive gifts

Iraq From 2005 through 2014, there were 45 enforcement actions involving Iraq.

Most actions in Iraq stem from a single investigation concerning the United Nations Oil-for-Food Program.

Nigeria From 2005 through 2014, there were 70 enforcement actions involving Nigeria, the

highest total of any country.

Most actions in Nigeria relate to two investigations involving the construction of a natural gas facility on Bonny Island and a customs sweep of companies in the oil and oil service industry.

Trend 8: Increased International Activity

Anti-corruption activities by overseas authorities, often team with U.S. Switzerland

UK

Germany

China

Brazil

March 30, 2015: FBI announced formation of 3 dedicated international corruption squads: NY, DC, LA Partner with overseas law enforcement

Target payors and recipients of bribes

18

Trend 9: Private Litigation

Claims by state owned entities--Pemex

Claims by competitors claiming damages--Otto Reich Associates (lost power plant contracts); Rio Tinto (lost oil mining concessions)

Claims by shareholders--Fuchs Family (Parker Drilling); Key Energy; Alcoa; Cobalt Energy

19

Trend 10: Increased Whistleblower Activity

Recent FCPA cases identified as eligible for whistleblower awards

In the Matter of Alcoa Inc.: January 2014

In the Matter of Smith & Wesson Holding Company: July 2014

In the Matter of Layne Christensen Company: October 2014

In the Matter of Bruker Corporation: December 2014

In the Matter of Goodyear Tire & Rubber Company: February 2015

In the Matter of Flir Systems, Inc.: April 2015

20

21

Enforcement Trends

22

Introduction: What is the FCPA?

The Foreign Corrupt Practices Act:Makes it illegal for any US person, US company, issuer, anyone

acting on their behalf (whether a US person or not), or anyone on US soil to bribe a foreign official or foreign political party for the purpose of obtaining or retaining business

Imposes accounting and record-keeping requirements on companies registered on any US stock exchange, including foreign companies, and on any companies who are required to file reports pursuant to the Securities Exchange Act

Two main components: Anti-bribery Provisions Record-Keeping and Accounting Provisions

23

Who is governed by the FCPA?

The Anti-bribery provisions apply to: Issuers

A publicly-held company whose securities are registered with the Securities Exchange Commission and who must file periodic reports subject to the requirements of the Securities Exchange Act of 1934 Issuers can be non-US companies. The FCPA also covers any officer, director, employee, agent or stockholder of an

issuer.

Domestic concerns Any citizen, resident, or national of the U.S., and Any company that is incorporated in the U.S. or that has its principal place of

business in the U.S. The FCPA also covers any officer, director, employee, agent or stockholder of a

domestic concern.

Any person who, while in the U.S., commits an act in furtherance of a bribe to an official outside the U.S. “Any person” includes non-U.S. persons and corporations.

24

What is prohibited by the FCPA’s anti-bribery provisions?

The anti-bribery provisions of the FCPA prohibit:

Paying or offering to pay anything of value;

To a foreign official, or to any other person “while knowing” that all or part of the thing of value will be paid or offered to a foreign official;

Corruptly for the purpose of influencing the official in

some official act or to secure any improper advantage;

In order to obtain or retain business.

25

“Foreign Officials” and “Willful Blindness”

The FCPA defines “Foreign Official” broadly to include: Any officer or employee of a foreign government or any

department, agency, or instrumentality thereof

Any political party, party official, or candidate for political office

Officials or employees of public international organizations – e.g., the World Bank, IMF, and the United Nations

Anyone acting in an official capacity for or on behalf of any such entity, such as members of royal families, officers and employees of state-owned enterprises or anyone who exercises official authority

The FCPA also includes “willful blindness” within its definition of “knowing.” The statute prohibits payments to third parties, such as consultants and

representatives, “while knowing” that all or part of the payment will be given to a foreign official.

26

“Anything of Value”

Examples:

Cash or a cash equivalent

Charitable donations

Travel expenses

Services

Golf outings or other entertainment unrelated to customary entertainment connected with a particular deal or contract

Loans

27

“Corruptly” and “To Obtain or Retain Business”

A payment is made “corruptly” when it is made with the specific intent: To influence an official act or decision of a foreign official

To induce a foreign official to do or omit to do any act in violation of his/her lawful duty

To induce a foreign official to use his/her influence with a foreign government to affect or influence any government act or decision

To secure any improper advantage

FCPA only covers payments made for a business purpose. Includes payments related to the renewal of contracts, the execution or

performance of contracts or the carrying out of existing business

The DOJ and the SEC interpret this element broadly.

28

Record-Keeping and Accounting Provisions of the FCPA

Require: Books, records, and accounts kept in reasonable detail to accurately and

fairly reflect transactions and dispositions of assets, and

Internal accounting controls (such as management authorization of transactions)

These provisions apply to: “Issuers” only, but SEC takes the view that the provisions also apply to any affiliate whose

financial results appear in the consolidated financial statements of the issuer

Intentional inaccurate recording of any payment is a violation. Prosecutor does not have to prove that payment was a bribe

Failure to describe what actually occurred could be a violation Example: Payment for lawful commission on project is recorded as

“equipment repair”

29

Penalties

Anti-Bribery Violations Individuals - criminal penalties include fines of up to $250,000 or twice the

amount of the gross pecuniary gain resulting from the improper payment, imprisonment of up to 5 years, or both

Companies - fines up to $2,000,000 or alternatively, twice their pecuniary gain

Civil penalties, including injunctions and hefty fines for both individuals and companies

Individual fines cannot be paid (directly or indirectly) by corporations.

Record-Keeping and Accounting Violations Individuals who willfully violate these provisions may be fined up to

$5,000,000, imprisoned up to twenty years, or both.

Corporations may be fined up to $25,000,000.

Alternatively, both individual and corporate defendants may be fined up to twice the amount of any pecuniary gain or loss resulting from the violation of the accounting provisions.

30

Statutory Exceptions and Defenses

Facilitating Payments A payment does not violate the FCPA if its purpose is to expedite or secure the performance of a

routine governmental action ordinarily and commonly performed by a foreign official. Examples: (1) Obtaining permits, licenses or other official documents; (2) Processing

government papers (visas, work orders); (3) Providing police protection, mail pick-up and delivery, or scheduling inspections

Promotional Expenses Defense Bona fide expenditures, such as travel and lodging, paid to or incurred on behalf of a

foreign official may be permissible, but only if directly related to: The promotion, demonstration, or explanation of products or services (e.g., tours of company

facilities; free samples, if reasonable); or The execution or performance of a contract with a foreign government or agency.

Payments Lawful Under Local Law Generally: Under certain exceptional circumstances, a payment may be made to a foreign

official if “lawful under the written laws of the foreign country.” Foreign Charities: Companies must conduct extensive due diligence to ensure that the

donation will not benefit or be used by a foreign official to circumvent the FCPA. Political Contributions: Unlike in the U.S. where foreign nationals may not contribute to U.S.

parties or candidates, it is sometimes permissible for overseas operations to make a contribution on behalf of a public company.

31

Enforcement Trends

32

FCPA Risks: Five Primary Factors

What the company sells (certain industries, such as the energy industry, have higher risk) To whom the company sells (if governments are a primary

customer, risk is higher)Where it sells (DOJ expects that countries like New

Guinea will be reviewed more carefully than Canada) How it sells (use of agents or joint venture partners

increases the risk) Degree to which the company’s business requires direct

interaction with government officials (the more interaction the higher the risk of corruption)

33

Transparency International Corruption Perception Index 2014“Highly Corrupt” Countries (Argentina < Somalia)

AlgeriaChinaSurinameBoliviaMexicoMoldovaNigerArgentinaDjiboutiIndonesiaAlbaniaEcuadorEthiopiaKosovoMalawiCôte d´IvoireDominican RepublicGuatemalaMaliBelarus

MyanmarZimbabweBurundiSyriaAngolaGuinea-BissauHaitiVenezuelaYemenEritreaLibyaUzbekistanTurkmenistanIraqSouth SudanAfghanistanSudanKorea (North)Somalia

MozambiqueSierra LeoneTanzaniaVietnamGuyanaMauritaniaAzerbaijanGambiaHondurasKazakhstanNepalPakistanTogoMadagascarNicaraguaTimor-LesteCameroon

IranKyrgyzstanLebanonNigeriaRussiaComorosUgandaUkraineBangladeshGuineaKenyaLaosPapua New GuineaCentral African RepublicParaguayCongo RepublicTajikistanChadDemocratic Republic of the CongoCambodia

34

FCPA Risks for Energy Sector Companies

Conduct business in emerging markets perceived to have high corruptionCash based economiesUnstable governments

Global business – contact with foreign government officials, directly or indirectly, unavoidableBid and tender processCustomsLicenses and PermitsMonitoring remote locations

Minimizing FCPA Risk

Establish Effective Compliance Program Senior management commitment

Clearly articulated and visible policy Adopted by Board

Code of conduct and compliance policies and procedures

Oversight, resources, autonomy

Risk assessment

Training and continuing advice

Incentives/disciplinary measures

Third party due diligence

Confidential reporting and internal investigation

Continuous assessment – periodic testing and review

35

Minimizing FCPA Risk

Develop Effective Internal controls Designed to prevent and detect bribery

Internal audits supplemented by forensic audits

Controls related to identified risk areas, for example Travel and entertainment Gifts and hospitality Product promotions

36

Minimizing FCPA Risk

Conduct Effective Third Party Due Diligence – Agents No one size fits all Do not over standardize Tailor to circumstances in each country based on risk

Key red flags to watch Whether the consultant or representative is related to a government

official;

Whether the representative has ever in the past requested a company to prepare a false invoice or other false documentation;

Whether the representative is willing to agree in writing to abide by the FCPA and other relevant laws and company policies;

Previous allegations (or convictions or charges) relating to corruption in connection with government contracts

37

38

Red Flags: Agents & Third Parties (cont.)

Key red flags to watch (cont.)

Unexplained or inadequately explained breakup of association with one or more foreign companies;

Requests for over-invoicing, or requests that all or a portion of the commission be paid in a third party country, to a third party, to a foreign bank account, in cash or otherwise untraceable funds;

Heavy reliance on political/government contacts versus knowledgeable staff and investment of time to promote company interests;

Unwillingness or inability to assist in developing or implementing a logical market development program;

39

Red Flags: Agents & Third Parties (cont.)

Key red flags to watch (cont.)

A desire to keep representation secret;

Other suspicious conduct on the part of the representative that would raise questions in the eyes of a prudent person; and

Relationship problems with other foreign companies.

40

Effective Due Diligence: Agents

Basic diligence steps to “know your agent” Assemble information about the ownership and business background of third-

party agent or representative. Confirm with reliable independent sources.

Should include a questionnaire to obtain necessary information, e.g., questions about capabilities; office location; affiliations with government officials or their family members; references.

Check into the agent’s or representative’s background:

Country desk officers at State and Commerce

Commercial attaché at U.S. embassy

Obtain an International Company Profile (“ICP”) Report from the Department of Commerce

Published press reports

Bottom line: Does agent have a reputation for integrity and ethical behavior?

Create written record of review and approval process

Effective Due Diligence: Agents

Adopt Adequate Contractual Safeguards Should include representations and warranties:

Is not a foreign official or affiliated or related to a foreign official

Understands and will abide by FCPA, OECD and local law

Has not previously engaged in questionable conduct and will not in the future

Should also include procedural safeguards

Mandatory provisions such as: Reasonable access to agent’s books; transparency; annual compliance certifications; payment restrictions (check/wire only - no third-party payees or countries); termination rights

Suggested provisions such as: Notification of change of ownership; no assignments of rights or transferability

41

Effective Due Diligence: Joint Ventures and Acquisitions

Companies risk liability for FCPA violations of joint venture partners or acquired company

Key steps Due diligence plan

Documentation of steps taken and reason for transaction

Contractual safeguards

DOJ Guidance on M&A due diligence

42

43

DOJ Guidance on Acquisitions & FCPA Compliance

Pre-acquisition, the acquiring company must engage in a reasonable level of due diligence to learn of any wrongdoing by the target company and its employees and/or agents;

The company also should obtain representations from the target company that it has not engaged in improper payments involving government officials. This representation cannot be known to be false at the time made. The representation could also take the form of a side letter or certification to the same effect by the company being acquired;

The DOJ and the SEC may consider whether the acquiring entity retains the ability to withdraw from the business, and/or to prevent its own funds from being used in furtherance of a violation. This is not the only means, though, to demonstrate that there is no attempt to obtain or retain business created, at least in part, through unlawful payments. The facts will determine what assets the acquirer might need to cast off in order to prevent itself from being viewed by the United States government as profiting through the acquired company’s unlawful acts;

44

DOJ Guidance on Acquisitions & FCPA Compliance (cont.)

Any pre-acquisition wrongdoing by the target company that the acquiring company learns of, both before and after the acquisition is completed, will often need to be disclosed to government officials contemporaneously upon discovery, which will result in a duty of continuing cooperation with the government post-acquisition, as well as a duty to appropriately discipline the persons found to have engaged in that wrongdoing;

The acquiring company must ensure that, going forward, all business activities, books and records, and internal controls, meet the FCPA’s standards, which is accomplished in part through a rigorous compliance program;

The acquiring company should take steps to completely vet all of the target’s pre-acquisition agents, and make sure that no money from the post-acquisition entity can flow to any of those agents. This may involve a spectrum of actions, from termination of all agents, to a process not involving termination, but designed to insure adequate vetting of all agents. All agents hired by the new entity should be subjected to rigorous due diligence; and finally,

Although it is unusual, if the target company is found to have engaged in sufficiently egregious FCPA violations, the US government may require an independent auditor to be appointed to review post-acquisition FCPA compliance.

45

Basic Elements of FCPA Due Diligence Review

Identifying the Ultimate Beneficial Owner of the Acquiree: A company should determine the identity of each significant ultimate beneficial owner of the company it proposes to acquire (or with which it intends to merge) to determine at every ownership level whether any foreign officials may be involved and whether the acquisition could be viewed as a vehicle to provide any benefit to a foreign official for improper purposes. Due diligence measures should include the inquiries and certifications referred to in this Reference Guide.

Identifying Sources of FCPA-violative Conduct: Company personnel should interview key company officials and audit the target’s books and records in order to probe the potential indications of conduct which violates company Policy or the FCPA. The financial due diligence should include a review of the accounting entries, as well as the implemented payment procedures, relating to the bidding for contracts with foreign governmental agencies or other instrumentalities.

Review of Contracts with Local, Regional or National Foreign Governmental Bodies: A company should obtain information about any contracts (or subcontracts) the company may have with any governmental agencies or quasi-government instrumentalities of the foreign country(ies) where it does business (such as state-owned utilities, for example).

Review of Contracts with Public International Organizations: A company should obtain information about any contracts (or subcontracts) the acquired company may have with any public international organization and any loans or other financing that any public international organization provided in connection with any project in which the company was involved.

Contracts with Agents, Consultants or Other Representatives: A company should identify and review all contracts the company to be acquired has entered into with any agents, consultants or other representatives.

46

Enforcement Trends

Handling FCPA Issues

Typical Scenarios: Internally identified issues

Government investigations

47

Handling FCPA Issues

Internally identified issues - Key considerations: Internal/Independent Investigation

Remediation

Self Reporting

48

Handling FCPA Issues

Internal/Independent Investigation: It is necessary?

Good investigation is major line of defense after issue identified

Determine scope/work plan Prompt Thorough & focused Balanced Consider local rules on data collection, employee interviews Determine who should investigate

Preserve relevant records

Steps to preserve privilege Assume third parties will have access

49

Handling FCPA Issues

Internal/Independent Investigation (cont.) Review documents and interview all relevant witnesses

Evaluate controls and assess whether issue is systemic

Determine whether company benefited

Determine whether payments were accurately recorded

Reporting findings to Board

Identify remediation

Evaluate necessity/advisability of voluntary disclosure

Anticipate public inquires, litigation, regulatory inquiries Development communication plan

50

Handling FCPA Issues

Remediation (if an issue exists): Correct any identified improper practices

Close gaps in existing policies and compliance program

Assess impact on internal controls

Take appropriate personnel actions

Conduct training if appropriate

Preserve relevant records

51

Government Investigations: Self Reporting

Self Reporting: Is it required?

Benefits of cooperation

Costs of potentially unwarranted government investigations

Factors to consider: Materiality (amount, pervasiveness, duration) Harm to third parties Extent of benefit Risk of disclosure to third parties (press, foreign regulators) Strength of evidence Strength of defenses Reputational risk Need for good relations with government – could it happen again? Timeliness of potential disclosure vs. need to know facts Potential benefit of voluntary disclosure, including DOJ and SEC guidelines

52

Government Investigations: Cooperation

Cooperation Decisions Risks

Rewards

Cooperation may include Timely & voluntary disclosure of wrongdoing to government,

public, regulatory agencies

Willingness to cooperate in the investigation of corporate agents

Willingness to provide relevant information

Willingness to identify relevant actors, including senior executives

Demonstrating thorough and effective remediation of violative conduct

53

Government Investigations: Challenging the Government

Most cases settle

No violation: No corrupt intent Will not help with books and records claims by SEC

No foreign official Fact based analysis (U.S. v. Esquenazi – 11th Cir.)

No improper purpose

Payment was allowed Facilitation Legal under local law Legitimate promotional payment

54

Government Investigations: Challenging the Government

Other defenses Statute of limitations Lack of jurisdiction US v. Patel Sec v. Straub SEC v. Steffen US v. Vassiliev (non-FCPA Foreign bribery)

Reduce monetary sanction – payment did not result in benefit

55

Q&A

56

THANK YOU

57

For more information contact:

Deborah R. Meshulam, PartnerDLA Piper LLP (US)T: 202.799.4511E: deborah.meshulam@dlapiper.com

Thomas Shakeshaft, PartnerDLA Piper LLP (US)T: 312.368.7264E: thomas.shakeshaft@dlapiper.com