By: Cuneyt Akay and Tyler Coombe
As Denver welcomed the Biennial of the Americas Sept. 12–16, we wanted to celebrate our great trade relations with many of the visiting international companies and countries. The weeklong festivities also offered a good time to revisit the U.S. Foreign Corrupt Practices Act to help in educating and keeping our foreign partners and local businesses safely on course. Colorado companies are by no means exempt from these regulations, as having even just one employee working in another country can create serious risk and require compliance with the FCPA.
For instance, could something as simple as paying for a government official’s round of golf constitute a bribe? What about taking a government official to a beer festival? According to the U.S. Department of Justice and Securities and Exchange Commission they certainly might.
BRIBES COME IN DIFFERENT SHAPES & SIZES
Some cases of bribery are more obvious than others. For instance, when a large telecommunications company engages in an alleged scheme to pay $114 million to foreign offi cials, in-cluding a high-ranking Uzbek govern-ment offi cial with infl uence over the Uzbek agency regulating the telecom industry, to ensure the company could enter and continue to operate in the Uzbek telecommunications market. The company (which is not even based in the U.S. but trades on NASDAQ) allegedly concealed the bribes through payments to a shell company and then falsely described them as equity transactions, consulting agreements and reseller transactions. In that case, the almost $800 million combined settle-ment the company paid to the DOJ, SEC, and Dutch authorities may not come as much of a surprise.
Other cases are not as obvious. Recently, a pharmaceutical company based in California learned this lesson the hard way: The company paid the U.S. government over $12 million because employees of the company’s subsidiary were providing, among other things, golf outings and attendance at a beer festival to healthcare professionals employed by a state-owned hospital in China.