Corruption Roundup: Biomet, UK and US Regulations, Sanctions in Burma and Europe, & More

For your reference, here is a roundup of recent law firm advisories covering corruption-related happenings around the globe. Ranging from Burma sanctions to Biomet settlements, see:

Fools Rush In: Social and Environmental Due Diligence in Burma (Foley Hoag LLP)

“… companies should consider how they would conduct business responsibly in Burma, were the investment-related sanctions to be lifted.  Widespread corruption, ethnic conflict, and antiquated social and environmental regulations present significant challenges. Companies will need to conduct robust social and environmental due diligence that takes into account the specific industry and location — general country due diligence will not suffice.” Read the full update»

The Expansion of EU Sanctions (Dechert LLP)

“Recent weeks have seen an expansion of EU sanctions in relation to Iran, Syria and Belarus. In addition, the UK continues to extend the scope of EU sanction provisions to its overseas territories. The scope of EU sanctions continues to widen. New measures which extend EU sanctions against Iran were adopted on 23 March 2012. The UK has extended part of these measures to its overseas territories. In addition, the list of individuals and entities subject to both the Syrian and Belarusian asset-freezing measures has been extended.” Read the full update»

UK Financial Regulator Issues Report on Bribery and Anti-Corruption Controls, Proposes New Guidance (BuckleySandler LLP)

“On March 29, the United Kingdom’s Financial Services Authority (FSA) published the findings of its thematic review into anti-bribery and corruption systems and controls in U.K.-based investment banks. The FSA review also looked at related topics including (i) gift-giving practices and controls, (ii) staff recruitment and vetting, (iii) training, and (iv) incident reporting.” Read the full update»

FinCEN Proposes Customer Due Diligence Requirement of Beneficial Ownership Identification to Enhance Federal Anti-Money Laundering and Counterterrorism Efforts (Davis Wright Tremaine LLP)

“… the Financial Crimes Enforcement Network issued an advance notice of proposed rulemaking seeking comments on a proposed customer due diligence (CDD) regulation that would explicitly require covered financial institutions to institute defined programs to identify the real or beneficial ownership of accountholders… The proposed CDD is intended to enhance federal anti-money laundering and counterterrorism efforts, and to establish a uniform and consistent CDD obligation with respect to beneficial ownership across financial institution sectors.” Read the full update»

DOJ Reaches FCPA Settlement With Medical Device Company (BuckleySandler LLP)

“DOJ alleges that Biomet, its subsidiaries, employees, and agents made illegal payments to publicly-employed health care providers in Argentina, Brazil, and China in exchange for business with certain hospitals in those countries and then falsely recorded the payments on its books to conceal the true nature of the payments.” Read the full update»

Biomet: Lessons from the latest FCPA settlement involving Latin America (Matteson Ellis)

“Biomet’s Brazilian and Chinese subsidiaries were aware that their distributors were paying doctors between 5 and 25 percent of the value of the medical devices in exchange for the purchases. Had the subsidiaries conducted appropriate anti-corruption due diligence on the distributors, they would probably have identified such practices before they started.” Read the full update»

DOJ’s Strategies – FCPA and Health Care Fraud (Mintz Levin)

“On March 26th … another device manufacturer, Biomet, Inc., announced that it entered into a new Deferred Prosecution Agreement (DPA) and accompanying settlements with DOJ and the Securities and Exchange Commission.  Coupled with the DPAs DOJ entered into with Johnson & Johnson in April 2011 and Smith & Nephew in February 2012, this announcement signals the fact that DOJ apparently is looking beyond United States’ boundaries for health care fraud enforcement opportunities.” Read the full update»

Washington D.C.: An Era of Unprecedented Enforcement (Michael Volkov)

“The most aggressive – and successful criminal prosecution programs have been Foreign Corrupt Practices Act and healthcare fraud.   Over last 4 years, the government has collected $4.1 billion in fines for FCPA violations.  Last year, the government collected $2.5 billion in fines for health care fraud cases, including a record number of False Claims Act cases. Antitrust enforcement has increased with a larger number of civil filings and over $1 billion last year collected for cartel conduct.  SEC and CFTC filings and disgorgement amounts are at record levels. Civil penalties increased to $168 million in FY 2011 from $110 million in FY 2010.” Read the full update»

FCPA Enforcement: Why Corporations Support DPAs and NPAs (Thomas Fox)

“One of the points [Mike Koehler] raised was regarding the proliferation of Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs) during the tenure of Mendelsohn at the Department of Justice (DOJ). The Professor argued that DPAs and NPAs, which did not come into wide spread use until the last decade, were tools which should not be employed for FCPA enforcement. One of the reasons he articulated this was that by use of these agreements the DOJ is not required to put proof in front of a judge or jury, hence the DOJ can expand its interpretation of the FCPA without appropriate judicial oversight.” Read the full update»

The Sherman Act’s Increasingly Long Arm (Morgan Lewis)

“…foreign companies involved in the manufacture or distribution of products outside the United States can no longer assume that the U.S. antitrust laws do not apply to their activities. This is presently an evolving area of the law with substantial uncertainty. It will take time for these issues to be sorted out in the courts and for clarity to emerge regarding the extraterritorial reach of the U.S. antitrust laws.” Read the full update»

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