Corruption Crime & Compliance

The Justice Department and the SEC have a long history of focusing FCPA enforcement on pharmaceutical and medical device companies.  Starting with a broad "industry sweep" nearly a decade ago, DOJ and the SEC have brought numerous enforcement actions.  In response, drug and device companies have attempted to implement effective compliance programs. In this Episode, Mike Volkov discusses FCPA enforcement trends and compliance strategies.

Compliance programs are rapidly evolving.  One of the key drives of this transformation is the increased reliance on automated compliance functions that generate substantial data.  Relying on data analytic strategies, compliance officers are quickly identifying key ares for measurement, monitoring and assessment as an important means to intervene and prevent serious misconduct. In this Episode, Michael Volkov reviews the rapid movement toward proactive compliance and strategies built on data monitoring and intervention.

In a precedent-setting agreement, the Justice Department, OFAC and the Bureau of Industry Security announced a settlement with SAP SE for more than $8 million for numerous violations of the Iran Sanctions program. While the Justice Department’s National Security Division (“NSD”) has settled prior export control and sanctions cases against corporations for violations of the North Korea Sanctions program, the SAP case is the first in which DOJ’s NSD flexed its new Export Control and Sanctions Enforcement Policy for Business Organizations, crediting voluntary disclosure, cooperation and remediation. Further, the SAP settlement provides important insights into DOJ’s export control and sanctions compliance expectations. The SAP case pushes DOJ’s views and expectations for export control and sanctions compliance programs.  Like the past history of enforcement actions and compliance program requirements involving the FCPA, DOJ’s SAP settlement is the beginning of a new, aggressive approach to export and sanctions compliance standards beyond those required by OFAC and BIS. In this Episode, Michael Volkov review the SAP settlement and outlines new export control and sanctions compliance expectations.

Chad Main is the Founder of Percipient, a legal and compliance technology firm.  Chad joins Michael Volkov for a discussion of current legal and compliance technology trends.Chad provides helpful advice on use of technology in compliance programs and functions.

Last week, the Biden Administration announced new and significant trade sanctions against Russia. The action was long expected given the Biden Administration’s criticism of Russia, and was a comprehensive response to Russia’s interference in the 2020 US election, its SolarWinds cyberattack and its ongoing occupation of Crimea and threatening addition of troops along the Ukraine border. Over the last few months, OFAC has ratcheted up sanctions against Burma in response to the military coup and continuing crackdown against protesters. In this Episode, Michael Volkov provides an overview on the Russia and Burma sanctions programs.

ESG is a new and important part of the corporate governance landscape.  Prosecutors and regulatory agencies are quickly adding ESG to their lexicon. The real question for every organization is “what are you doing to address it?”  ESG is a terrific opportunity to leverage an organization’s corporate culture to address a broad set of values beyond ESG principles. In this Episode, Michael Volkov discusses the ESG movement and the implications for corporations.

In the new Biden Administration, companies should expect aggressive enforcement of trade sanctions.  At the same time, in response to Russian aggression and the Solar Winds cyber-attack, OFAC is likely to implement new and even more restrictive sanctions against Russia.  In anticipation, companies should elevate the importance of their sanctions compliance programs (SCPs) pursuant to the May 2019 OFAC Framework.  Unfortunately, for many companies, sanctions compliance does not get the attention it deserves. Those companies that ignore sanctions risks are operating in peril. In this Episode, Michael Volkov reviews the 2021 OFAC enforcement actions of the year involving five separate cases, including (1) Union de Banques Arabes et Françaises; (2) PT Bukit Muria Jaya; (3) BitPay, Inc.; (4) UniControl, Inc.; and (5) Nordgas, S.r.l.

Boeing’s long and tragic scandal surrounding its 737 MAX safety concerns and FAA disclosure violations has come to an end.  DOJ announced a settlement early this year, on January 7, 2021, which included a three-year deferred prosecution agreement (DPA) in exchange for total payments of $2.5 billion, consisting of: a $243.6 million criminal penalty, $1.77 billion in compensation to its airline customers, and $500 million to establish a crash victims’ beneficiary fund to compensate families of the 346 people killed in two crashes involving Boeing’s 737 Max.  The criminal information charged Boeing with one count of conspiracy to defraud the United States. Boeings 737 Max was involved in two crashes in 2018 and 2019 before being grounded.  In October 2018, Lion Air flight 610 crashed in the Java Sea, killing 189 people, and in March 2019, Ethiopian Airlines flight 302 crashed shortly after takeoff, killing 157 people.  The United States ordered the planes grounded shortly after the Ethiopian Airlines crash. As part of the settlement, Boeing admitted that it withheld critical information about the 737 MAX jets’ Maneuvering Characteristics Augmentation System and the impact it had on the plane’s flight control system. In this Episode, Michael Volkov reviews the DOJ settlement with Boeing for compliance insights, enforcement observations and overall fairness of the resolution.

The Ethics & Compliance Initiative recently released its 2021 Global Business Ethics Survey.  The GBES is an insightful and important survey. The link to the report is https://www.ethics.org/just-released-2021-global-business-ethics-survey-report/. In this Episode, Michael Volkov interviews Pat Harned about the results and the important findings.

Mike Volkov interviews Alex Cotoia, Regulatory Manager and Compliance Consultant at the Volkov Law Group, concerning trade compliance and anti-boycott issues. Alex specializes in corporate risk assessments, evaluation of general compliance programs, and the remediation of compliance deficiencies. He also specializes in trade (export) compliance and is familiar with a broad range of issues arising under both the Arms Export Control Act and its implementing regulations (ITAR) as well as the Export Administration Act and its implementing regulations (EAR). Alex can be reached at acotoia@volkovlaw.com.