Lessons from FCPA Settlements: Investigations, Remediations, and Compliance Programs

Over the past 15 months the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have made clear through three Foreign Corrupt Practices Act (FCPA) enforcement actions, their priorities in investigations, remediations, and best practices for compliance management systems. Every compliance professional should study each of these enforcement actions closely for the lessons learned and direct communications from the DOJ. They should guide not simply your actions should you find yourself in an investigation but also how you should think about the priorities.The three FCPA enforcement actions are ABB from December 2022; Albemarle from November 2023 and SAP from January 2024. Taken together they point a clear path for the company which finds itself in an investigation, using extensive remediation to avoid a monitor and insight for the compliance professional into what the DOJ expects in a best practices compliance program on an ongoing basis.

ABB

In late 2022, ABB became first three-time convicted violator of the FCPA, having prior FCPA violations in 2004 and 2010. The bribery schemes were massive and went all the way into the corporate headquarters.Yet, ABB obtained a relatively low fine and penalty, and, as a three-time FCPA violator, it avoided a monitor. How?

1. Near Self-Disclosure. It all began with ABB’s attempt to self-disclose.
2. Note that this attempt was not successful as the South African press broke the story of ABB’s bribery and corruption between the time ABB called to set up a meeting and actually sat down with the DOJ.
3. True Extraordinary Cooperation. In the SEC Order, it stated, “ABB’s cooperation included real-time sharing of facts learned during its own internal investigation.” This meant ABB was sharing information with regulators as quickly as it found those facts, without necessarily knowing how such admissions might affect its overall case and settlement chances.
4. Extensive Remediation. Next were the actions by ABB in their remediation. The Plea Agreement reported that ABB "engaged in extensive remedial measures, including extensive employee discipline."

Albemarle

In November 2023, Albemarle agreed to pay more than $218 million to resolve violations of the FCPA stemming from Albemarle’s participation in corrupt schemes to pay bribes to government officials in multiple foreign countries.How did the company obtain this positive result?

1. Timely Self-Disclosure. There was a significant discussion in the NPA around Albemarle’s voluntary self-disclosure to the DOJ. It said the disclosure was not
2. “reasonably prompt,” as it was made approximately 16 months to the DOJ after initial discovery by the company. This meant the self-disclosure “was not within a reasonably prompt time after becoming aware of the misconduct in Vietnam” and it means that Albemarle did not meet the standard for voluntary self-disclosure. While the DOJ “gave significant weight”, to the company’s voluntary, even if untimely, disclosure of the misconduct, it is certainly cautionary.
3. Remediation. There were two noteworthy areas in remediation. The first was the company completely discarded its sales model of using third-party agents and went to a direct sales model. The second was the company’s use of data analytics in two separate manners. The first was to monitor the company’s compliance program and the second was to measure the compliance program’s effectiveness. By using data analytics that Albemarle was able to satisfy the DOJ requirement for implementing controls and then effectively testing them throughout the pendency of the DOJ investigation, Albemarle was able to avoid a monitorship.
4. Holdbacks. Albemarle engaged in holdbacks, as they did not pay bonuses to certain employees involved in the conduct or those who had oversight. The significance of this effort was important as it qualified Albemarle for an additional fine reduction of a dollar-for-dollar credit of the amount of the withheld bonuses under the Criminal Division’s March 2023 Compensation Incentives and Clawbacks Pilot Program.