EXPORT REGULATION: DESCRIPTION

Global Anti-Corruption Enforcement

Multi-national corporations today face challenges on a variety of corporate governance and regulatory fronts. Critical among them is the growing world-wide emphasis on investigating and prosecuting activities aimed at improperly influencing foreign government officials to obtain business.

In the United States, enforcement of the Foreign Corrupt Practices Act of 1977 (FCPA) has expanded as a result of the amendment of the Act in 1998, and renewed focus on corporate responsibility. In the wake of the entry into enforcement in February 1999 of the Organization for Economic Co-Operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Treaty), 37 countries — all 30 OECD members plus Argentina, Brazil, Bulgaria, Chile, Estonia, Slovenia and South Africa — have ratified the convention. In the U.S., the pre-existing FCPA has become the OECD Treaty implementing legislation. Major European Union (EU) member states have committed to investigating and prosecuting overseas corrupt practices, and have opened investigations into many well-established national companies. Similarly, the Chinese government is making headlines for investigating public officials and local and joint venture companies for potentially corrupt business practices. Oversight and investigations by Latin American governments under the Inter-American Convention Against Corruption of 1996 are beginning to take hold.

Cooperation between investigating governmental bodies in the U.S. and the EU — whether at the EU or Member State level — is increasing. Reports of allegedly improper activities in an EU member state may lead to an investigation in the U.S., and vice-versa. As a result of this increased scrutiny, companies must focus on the efficacy of their compliance programs. Companies must synchronize and interlink updated policies and procedures. They should train company employees and conduct due diligence of business colleagues. Once a government inquiry is initiated, an immediate and integrated response on both sides of the Atlantic (or Pacific) is the key to effective governance and risk management. If a problem is identified, companies must take appropriate steps immediately to determine the nature of the problem and to develop a strategy for responding to it. The disruptive nature and high monetary costs of internal investigations after a problem is discovered far outweigh the costs of implementing well-designed programs before potential FCPA violations arise.

To aid our clients in navigating through the complex global business environment, our attorneys and public-policy advisors have assisted U.S. and multi-national corporations in successfully meeting their obligations under the FCPA and the ever-growing list of international anti-corruption conventions, including the OECD Anti-Bribery Convention, the U.N. Convention against Corruption, and the Inter-American Convention against Corruption. Beginning with the U.S. SEC “questionable foreign payment” investigations that arose out of certain Watergate hearing revelations in the mid-1970s, and continuing with the passage of the FCPA in 1977, MLA has been active in all phases of counseling, administrative litigation, and criminal trial litigation in the U.S. and throughout Europe. In addition to helping our clients comply with the FCPA’s regulations, we have successfully represented clients when potential problems have arisen. Our FCPA practitioners work closely with our litigators and government contracts attorneys to assist clients in conducting internal investigations and defending against government enforcement actions. Our clients range from companies under government scrutiny to individual witnesses. We regularly assist clients in responding to government investigations and, if necessary, in reaching settlements and developing disclosure strategies.

The firm’s lawyers include a recent former Chief of the Fraud Section, Criminal Division, U.S. Department of Justice with decision-making responsibility on FCPA prosecutions, and many former assistant United States attorneys with direct FCPA investigation and prosecution experience both in the public and private sectors.

Representative Matters

Obtained the first pre-FCPA consent settlement with the SEC to include in the Order of Permanent Injunction a requirement to comply with the provisions of the FCPA, which had been enacted the previous day.
Handled the first criminal FCPA trial in the United States to be dismissed by a federal district court without going to the jury.
Testified on behalf of the America Bar Association at the Senate Banking Committee hearings on the 1988 amendments to the FCPA that eliminated the controversial “reason to know” standard by which companies were to be held liable for acts of their agents and of their foreign agents and representatives.
Conducted internal investigations, training, and representation before the U.S. Justice Department and SEC for literally hundreds of clients over the past thirty years.
Represented companies subject to investigation by OLAF, the EU audit watchdog over expenditure of EU monies, involving corrupt practices allegations.
Have regularly spoken and written on this topic.

U.S. Export Controls

McKenna Long & Aldridge provides support to U.S. and foreign companies and universities on export regulation and related matters, including compliance with the Export Administration Act, Arms Export Control Act and Foreign Assets Control Regulations. Our lawyers regularly work with officials responsible for export control in the Departments of Commerce, State, Treasury and Defense to assist clients in determining regulatory jurisdiction, obtaining appropriate licenses and other approvals needed for transactions and investigating and managing regulatory violations when they are revealed, including the preparation of voluntary self-disclosures. We also support our clients in the preparation of regulatory compliance programs and the training of employees in the complexities of these regulations in a manner that promotes client business in a full-compliance environment.

Representative Matters

Advised on an internal investigation and disclosure concerning transfer of technical data to dual-national employees of a U.S. multi-national corporation.
Counseled a client concerning the use of the Canadian exemption under State Department regulations.
Conducted internal reviews and training of several U.S.-based multi-national companies for EAR and ITAR compliance.
Prepared the first Commerce Department Office of Antiboycott Compliance voluntary disclosure of numerous failures to report, resulting in no sanctions imposed.
Represented a major trading company purchasing defense systems for the armed forces of its home country in a license dispute with the U.S. Department of State, securing timely release of a seized shipment and avoiding cancellation of the contract and substantial penalties.
Represented a client in a border seizure resulting from the imposition of a licensing requirement under a new, but unpublished, interpretation of the regulations. Successfully obtained the necessary approvals to release the goods and prevent the shut-down of automobile plants in Europe and the U.S. that would have occurred had the goods not been delivered to the production line on time.
Represented major U.S. research universities and national laboratories in connection with contracts subject to various export control regulations, involving issues such as the deemed export of technical data to foreign national students, faculty and/or collaborators, and the possible provision of defense services.

Trade Embargo and Sanctions

Since the enforcement program commenced, we have represented United States companies dealing with trade issues arising under the country specific embargoes, restrictions and sanctions administered by the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury. We routinely counsel clients concerning the requirements, and OFAC interpretations, of its regulations. Our attorneys have obtained special licenses from OFAC; handled many voluntary disclosures; and represented U.S. multi-nationals involved in OFAC enforcement proceedings concerning doing business in restricted foreign countries; and related matters.

Representative Matters

Representing U.S. multi-national with London based subsidiary in voluntary disclosure to OFAC of that subsidiary’s transactions with Iran; no action taken by OFAC.
Representing U.S. multi-national in OFAC enforcement related to prior dealings in Iran; no action taken.
Representing U.S. multi-nationals in voluntary disclosure relating to OFAC’s Libyan sanctions; no action taken.

Antiboycott Regulations

McKenna Long & Aldridge has been actively engaged in representing clients before the Department of Commerce’s Office of Antiboycott Compliance since the antiboycott regulations were first promulgated in the 1970s. We have regularly counseled our clients on compliance with both the Department of Commerce’s regulation and the IRS’s antiboycott regulations, and have defended OAC investigations and made voluntary disclosures. For example, we obtained on behalf of a U.S. multi-national OAC’s first agreement not to impose sanctions on a voluntary disclosure of late reporting of substantive violations.