ICLG Corporate Investigations Laws and Regulations

This article was first published on ICLG in January 2024.

Cross-Border Investigations: Navigating International Requirements 2024

1. Introduction

As the world recovered from the throes of the COVID-19 pandemic, a new challenge emerged on the horizon that has and will continue in the foreseeable future to transform both how companies do business, and how cross-border investigations are conducted. The current geopolitical landscape has encouraged investigative agencies of certain nation states closer together as they counter global-scale national security threats. It has also emphasised the focus on narrow national interests, deepening apprehension at cooperating with other nation states and eroding the possibility of cooperation between their investigative and enforcement agencies.

The upshot for multi-national companies is a more uncertain and turbulent enforcement landscape requiring them to grapple with the national security implications of their businesses, adapt to the new priorities of enforcement agencies, and sometimes navigate conflicting jurisdictional rules and requirements. Now more than ever, companies need to carefully consider and deftly handle engagement strategies in cross-border investigations to account for greater divergences in the interests of investigators, and the ups-and-downs of bilateral relationships.

In this chapter, we explore: how the US, UK, and Hong Konganti-corruption agencies conduct investigations; the consider-ations they take into account when deciding whether or not to prosecute wrongdoing; their historical approach to cooperation in pursuing investigations as well as emerging trends; and the alternative resolutions available to companies.

2. Standards for Investigation

Each enforcement agency employs its own standards in determining whether to initiate an investigation. However, the general principles across all three are substantially similar: they receive information; conduct preliminary inquiries; and weigh up evidential and public interest factors when determining whether a full investigation is warranted.

The DOJ prosecutes all US federal criminal matters, including the Foreign Corrupt Practices Act (“FCPA”).ⁱ The DOJ has taken an expansive and aggressive view on its territorial jurisdiction, and even minimal US touchpoints may expose foreign entities and individuals involved in overseas conduct to rigorous DOJ scrutiny.ii

The Federal Bureau of Investigation (“FBI”) typically conducts preliminary inquiries and can open a full investigation based on a “reasonable indication” of criminal activity, a low bar that is easily cleared.ⁱⁱⁱ Prosecutorial decisions, including whether or not to open an investigation, are guided by the DOJ’s Principles of Federal Prosecution of Business Organizations.^iv

Unlike the DOJ, the SFO does not have a general authority or duty to prosecute crimes in the UK. The SFO investigates only the most serious and complex fraud, bribery, and corruption cases. In relation to corporate bribery, the SFO has jurisdiction over “failure to prevent bribery”^v offences by companies incorporated or carrying on “part of their business” in the UK, regardless of where in the world the conduct occurred. Investigations relating to bribery of another person or a foreign official, or being in receipt of bribes^vi (undertaken anywhere in the world), can be commenced by the SFO where the act or omission involves persons with a “close connection” to the UK (i.e., a body incorporated in the UK, British citizens or persons who are ordinarily resident in the UK), or where the conduct occurs in the UK.^vii

The Economic Crime and Corporate Transparency Act, which received Royal Assent on October 26, 2023, includes reform of criminal liability for corporates. The new failure to prevent fraud offence means corporates will be held criminally liable if an “associated person” commits fraud for the corporate’s benefit or the benefit of a person or entity to whom the corporate provides services. Employees, agents, and subsidiaries are “associated persons”, along with others who perform services for or on behalf of the corporate entity. Importantly, fraud undertaken by employees for their own benefit only will not be caught. In contrast to the failure to prevent bribery and tax evasion offences, a corporate can only be guilty of failure to prevent fraud if the UK courts have jurisdiction over the underlying fraud offence; for example, if the fraud caused harm suffered in the UK.

Hong Kong’s Independent Commission Against Corruption (“ICAC”) investigates corruption and bribery cases. Cases can range from high-profile commercial matters to small-value matters.^viii The ICAC opens an investigation if there is reasonable cause to believe that an offence subject to its jurisdiction may have been committed.^ix The decision to prosecute rests with the Hong Kong Department of Justice (“Hong Kong DOJ”) after considering the evidence presented by the ICAC.

3. Conduct of Investigations

The DOJ uses several tools at its disposal to gather evidence, including wiretaps, informants, and cooperating witnesses. It typically conducts investigations through federal law enforcement agencies (such as the FBI) operating in conjunction with grand juries – independent bodies vested with expansive investigative powers tasked with determining whether there is probable cause that a federal crime has been committed. Grand jury powers include the ability to compel the production of corporate documents and records, and command testimony from anyone within the US. The DOJ can also obtain, via court order, warrants to enter, search and seize materials from premises.

The SFO relies on Section 2 of the Criminal Justice Act 1987 to compel persons or entities believed to have relevant information, to: (i) answer questions or provide information for any matter relevant to the investigation; and (ii) produce and explain relevant documents. However, the SFO’s ability to compel foreign companies to produce information held abroad, without resorting to submission of Mutual Legal Assistance requests to foreign authorities, was limited by the Supreme Court in KBR, Inc.^x The SFO can obtain court-ordered warrants to enter and search premises and take possession of documents or other materials relevant to its investigation. Like the DOJ, the SFO can enlist support from the police in conducting its investigations, thereby accessing more extensive police powers.

The ICAC has wide-ranging investigative powers, including arrest and detention. One of the most common and powerful tools applied by the ICAC is “dawn raid”, a seize and detain drill typically done in the early hours of the morning. Though the ICAC requires a search warrant from a magistrate before conducting a dawn raid, the threshold for obtaining it is simply a reason to believe that evidence relating to an offence is contained in the premises.^xi The ICAC also has the power, during a raid, to seize anything which it has a reason to believe is or contains evidence of the alleged conduct.^xii

Whilst the tools may be similar, diverging approaches and processes can cause friction and create dilemmas for both investigating authorities and those under investigation.

4. Resolution

While each agency employs their own individual procedures and standards in determining how to resolve investigations, the commonalities can be encapsulated in three overarching factors: (1) the weight and severity of the wrongdoing; (2) the nature and behaviour of the entity; and (3) public policy.

The DOJ, when deciding whether to proceed with or decline prosecution, relies on the nine factors in the Principles of Federal Prosecution of Business Organizations that guide the opening of an investigation. Under these standards, if a company has voluntarily disclosed, fully cooperated, and remediated appropriately, they will likely receive a deferred prosecution agreement (“DPA”) or non-prosecution agreement (“NPA”), absent aggravating factors.^xiii

NPAs, in large part, are similar to DPAs: they generally require a company to pay a fine, admit to relevant facts, cooperate with the government, and enter into compliance and remediation commitments. The key difference is that while a DPA must be approved by a judge in court proceedings and is generally publicised, an NPA does not require court approval and is generally kept private; it is simply a letter of agreement between the DOJ and the offending corporate entity. This lack of publicity presents obvious benefits to the subject corporate; for example, it may avoid reputational damage, and associated impact on share price.

DPAs and NPAs “occupy an important middle ground between declining prosecution and obtaining the conviction of a corporation”,^xiv as they can, when used appropriately, help “restore the integrity of a company’s operations” while “preserv[ing] the financial viability of a corporation”, as well as “the government’s ability to prosecute” should the corporate fail to meet the terms of the agreement.^xv

While a proposed DPA and the corresponding dismissal of charges against the company must be judicially approved, this approval has essentially been a rubber stamp in practice, with judges having “no power” to deny a prosecutor’s motion to dismiss charges based “on a disagreement with the prosecution’s exercise of charging authority”.^xvi However, judges have expressed strong reservations with this approach in recent years, with one judge complaining: “I have absolutely no choice in this matter, no discretion whatsoever … I’m obliged to swallow the pill, whether I like it or not.”^xvii In 2023, a federal judge in the District of Delaware repeatedly told both Hunter Biden and the Government that she would not act as a “rubber stamp” and avoided approving a plea agreement between the parties by exposing the fault lines in the agreement.

Additionally, effective January 2023, the Criminal Division’s Corporate Enforcement Policy provides that “when a company has voluntarily self-disclosed misconduct to the Criminal Division, fully cooperated, and timely and appropriately remediated … there will be a presumption that the company will receive a declination absent aggravating circumstances involving the seriousness of the offense or the nature of the offender”. To qualify for a declination under this new policy, a company would be “required to pay all disgorgement, forfeiture, and/or restitution resulting from the misconduct at issue”.^xviii

On the other hand, failure to cooperate or the presence of aggravating factors may lead to prosecution, at which point the company may opt to plead guilty or go to trial. In October 2021, US Deputy Attorney General Lisa Monaco clarified that the DOJ, when making charging decisions, will consider all of the corporation’s prior misconduct, whereas in the past DOJ policy required consideration only of a corporation’s history of “similar misconduct”,^xix though of course “not all instances of prior misconduct [ ] are equally relevant or probative”.^xx (Emphasis added.)

In the UK, the DPA Code of Practice^xxi (the “DPA Code”) guides the SFO’s decision on offering a DPA to companies suspected of wrongdoing. In order to offer a DPA, the SFO must apply two tests: (i) the evidential test; and (ii) the public interest test. To meet the evidential test, the SFO must show that either: (a) there is sufficient evidence to provide a realistic prospect of conviction; or (b) there is a reasonable suspicion based upon some admissible evidence that the company has committed an offence, and there are reasonable grounds for believing that continued investigation would, within a reasonable time, provide sufficient admissible evidence to establish a realistic prospect of conviction. The SFO must also be satisfied that the public interest is properly served by entering into a DPA rather than proceeding to prosecution. If the evidential test is not satisfied, the investigation may be closed, or may continue in an effort to obtain sufficient evidence to meet the test. If the public interest demands prosecution rather than a DPA, then, subject to there being sufficient evidence to provide a realistic prospect of conviction, full prosecution will follow.

Approval of a DPA is ultimately considered in a public hearing by a judge, who must conclude that the DPA is in the interest of justice, and that its terms are fair, reasonable, and proportionate. The role of the judiciary in the UK, as compared to the US, is of particular importance to the DPA process, as the reviewing judge has ultimate discretion over whether to approve a DPA. Therefore, whilst a judge has yet to reject a proposed DPA in the UK, the threat of refusal provides a strong incentive for negotiations to result in proposed penalties that are proportionate and justifiable, and therefore unlikely to be rejected.

Where a company is not offered a DPA, but is charged, it remains possible to enter plea negotiations over the terms of a guilty plea, as seen in the recent GPT,^xxii Petrofac^xxiii and Glencore^xxiv cases. A statement of facts may be agreed along with a joint sentencing proposal, thereby obtaining greater predictability over the likely outcome. The penalty after a guilty plea, however, is a matter for the sentencing judge, who may go outside of the proposal.

In contrast, Hong Kong’s legislative framework does not permit the ICAC or the Hong Kong DOJ to enter into DPAs. The only alternative to prosecution is for the ICAC to administer a “caution”. This is, however, only available for minor offences where it is not in the public interest to prosecute. In the past decade, such cases have accounted for less than 20% of the total cases.^xxv In recent years, the Hong Kong DOJ/ICAC have maintained a high conviction rate of around 80% where a decision to prosecute was made.^xxvi

5. Considerations for a DPA

Where a company (and in the US, also individuals) decides that they would rather engage meaningfully with the authorities and secure a DPA rather than risk the uncertainty of potentially lengthy court proceedings, they must comply with the standards of cooperation set forth by the enforcement agencies.

Self-reporting

Self-reporting requires extremely careful and informed consi-deration, and an in-depth analysis of the short-, medium- and long-term risks and benefits of doing so. Whilst law enforcement agencies strongly encourage self-reporting, it is possible for a company that did not initially self-report to ultimately obtain a DPA if their subsequent cooperation is sufficient to compensate for that failure. However, failure to promptly self-report may lead to heavier penalties, particularly in the UK, where Lord Justice Edis in the Amec Wheeler Foster DPA described the decision of the company to not self-report earlier as “deplorable”, noting that the “…whole outcome of the case would have been far better” had it self-reported at an earlier stage.^xxvii

Cooperation

Cooperation is the essential factor considered by the authorities when determining whether a DPA is an appropriate resolution. Typically, it is the overall level of cooperation that matters, and any “initial reluctance to cooperate fully can be dealt with when considering the discount on any financial penalty”.^xxviii

A company seeking a DPA will generally be expected to identify suspected wrongdoing and those who committed it, report it within a reasonable time, and preserve and provide available evidence to the authorities.

The US deviates somewhat from its UK counterpart with respect to the waiver of legal privilege. In the US, a corporate can cooperate fully with a DOJ investigation without waiving legal privilege. Indeed, DOJ policy specifically forbids prosecutors from suggesting that a corporate under investigation waive privilege.^xxix

The SFO, whilst not demanding a waiver, views a corporate’s waiver of privilege over materials generated during the course of an internal investigation as a “strong indicator of cooperation”, favourably impacting its ability to achieve a DPA.^xxx Conversely, if a corporation decides not to “waive privilege” or “provide witness accounts”, it will not “attain the corresponding [public interest] factor against prosecution that is found in the DPA Code”. In the Airlines Services Limited DPA, the limited waiver of privilege over the content of the company’s internal investigations was viewed by Mrs Justice May as an indication of the company’s high level of cooperation with the SFO, which in turn led to a 50% discount to its ultimate financial penalty.

Compliance programme

Enforcement authorities in both the US and UK have made clear the importance, and potential benefit, of a robust anti-corruption compliance programme. Deputy Attorney General Lisa Monaco stated in the DOJ’s latest memorandum on corporate criminal enforcement policies that “although an effective compliance program and ethical corporate culture do not constitute a defense to prosecution of corporate misconduct, they can have a direct and significant impact on the terms of a corporation’s potential resolution with the Department”.^xxxiii The SFO’s compliance programme guidance provides that during investigations, the SFO “will need to assess the effectiveness of the organisation’s compliance programme”.^xxxiv

The key attributes that the US and UK authorities cite as characteristics of a robust anti-corruption compliance programme broadly align, encouraging a dynamic, tailored, and proportionate programme, which: implements an internal framework for investigations and compliance violations; provides training to employees; and effectively monitors third parties operating on behalf of the company. Each authority also stresses the need for management to actively promote a culture of compliance.

To assess compliance programmes, prosecutors consider the publicly available criteria set forth in the Evaluation of Corporate Compliance Programs (“ECCP”).^xxxv On January 17, 2023, the DOJ announced significant changes to the ECCP, focusing on a corporation’s approach to the use of personal devices as well as various communications platforms and messaging applications, including those offering ephemeral messaging. Following an update in the Criminal Division’s policies concerning corporate compensation systems, prosecutors will now also consider the relationship between an effective compliance programme and the company’s compensation system.^xxxvi Moreover, a pilot programme launched in 2023 would require, as part of a criminal resolution, that corporate compliance programmes include compensation-related criteria and offer fine reductions for companies that seek to clawback compensation in appropriate cases.^xxxvii

In the UK, Sir Brian Leveson noted in his preliminary judgment of the Sarclad DPA that the government made “a policy choice in bringing DPAs into the law of England and Wales, that a company’s shareholders, customers, and employees (as well as those with whom it deals) are far better served by self-reporting and putting in place effective compliance structures. When it does so, that openness must be rewarded and be seen to be worthwhile”.^xxxviii

Section 7(2) of the UK’s Bribery Act 2010 provides a defence to companies that have put in place adequate procedures designed to prevent a bribery offence from being committed. Having reasonable procedures in place to prevent fraud will be a defence to the new failure to prevent fraud offence. Government guidance will be published on what constitutes “reasonable procedures” before the offence comes into force. Even where procedures cannot be said to be adequate or reasonable, the extent to which efforts were made to institute such procedures will be relevant to whether the case merits prosecution, a DPA, or no action.

6. Inter-Agency Cooperation

Large cross-border investigations frequently involve a complex nexus of jurisdictional touchpoints, engaging the legitimate interests of two or more enforcement agencies. Reaching a resolution therefore requires not only that the investigated entity cooperate with multiple investigating authorities, but also that the investigating authorities cooperate with one another regarding the conduct of the investigation and an acceptable resolution.

Inter-agency relationships can be problematic for companies under investigation, as it is an aspect over which they have very little control. Where agencies work together less frequently, they may be less alert to the particular challenges facing the others. It can be difficult to foresee and react to changes in dynamic between the investigating agencies.

Close cooperation between agencies relies in part on the strength of personal relationships of trust between staff at each agency, particularly at senior levels. Changes in leadership can increase or decrease the priority given to working collaboratively with partners. The quashing of the SFO Unaoil convictions, and the role played by poor relations between the SFO and DOJ at that time, lay bare the damage that can flow from relationships being permitted to deteriorate.^xxxix Increasing turnover of staff can lead to constant re-establishing of relationships and reduce opportunities to nurture and develop common understanding.

The political climate in each jurisdiction and the relationships between nation states also affects the level of cooperation between agencies. In the wake of Russia’s war on Ukraine, agencies in the West are approaching the investigation and enforcement of money laundering, sanctions evasion, and export control violations with a renewed, aggressive focus. In March 2023, Deputy Attorney General Lisa Monaco announced the addition of 25 new prosecutors, including the National Security Division’s first-ever Chief Counsel for Corporate Enforcement, to prosecute sanctions evasion, export control violations, and similar economic crimes.^xl

The policy shift has translated into forceful action at breakneck speed. For example, the DOJ successfully argued before the Supreme Court in April 2023 that the Turkish state-owned Halkbank, which allegedly conspired to undermine the United States’ sanctions on Iran, was not protected under the Foreign Sovereign Immunities Act.^xli In the same month, the DOJ entered into a corporate resolution with British American Tobacco, imposing “the largest North Korean sanctions penalty in the history of the Justice Department” on the company for allegedly doing business in North Korea through a third-party company in Singapore.^xlii

Increased focus in the West on national security-related enforcement action has also entailed significant inter-agency cooperation, especially where national security intersects with crypto crime, which the DOJ has recognised is an area that of necessity requires collaboration with foreign law enforcement partners.^xliii In its June 2023 response to the topic of “illicit and emerging finance” to the Foreign Affairs Select Committee, the SFO highlighted the increasing number of referrals relating to crypto assets, and stressed the importance of mutual legal assistance when it comes to cross-border investigations and crypto assets. This focus on crypto continues as part of the SFO’s plans to further develop “crypto asset capabilities” and policy positions in this area.

At the same time, rising tension with China has meant not only a lack of cooperation between the investigative authorities of China on the one hand and Western allies on the other, but active hostility that has made it challenging for companies tied to both sets of jurisdictions to comply with each jurisdiction’s laws and fully cooperate in the event of an investigation. For example, in 2023, China raided a number of foreign businesses operating on its soil, including Bain & Company, Capvision and Mintz Group.^xliv Coinciding with these raids was China’s update to its anti-espionage legislation, which significantly broadens the scope of information of which transfer can be prohibited on national security grounds.^xlv

In addition, tensions also pervade cooperation efforts with Hong Kong. For example, Hong Kong stated in October 2022 that it would ignore unilateral sanctions against Russian billionaire Alexei Mordashov, whose superyacht was docked in the city’s waters.^xliv Hong Kong’s ICAC has the ability to investigate corruption-related matters in response to requests from its overseas counterparts.^xlvii In fact, in 2022, the ICAC assisted with 13 such requests,^xlviii and received assistance in response to two of its own requests. However, a number of mutual legal assistance orders, including with the US, UK, France, and Germany have been suspended since 2020.^xlix

Instead, the ICAC has been strengthening its cooperation with counterparts in mainland China. For example, the ICAC recently assisted its Macanese counterpart in investigating alleged bribery of a Macau gaming company employee by an air conditioning system supplier, including by facilitating interviews of witnesses in Hong Kong.^l Earlier this year, the ICAC met with the China Securities Regulatory Commission to discuss enforcement cooperation.^li

One question that has drawn increasing attention in the backdrop of global investigations and has the potential to complicate inter-agency cooperation is what constitutes a fair distribution of recovered monies, including by way of forfeiture, restitution, and fines.

The UK General Principles to compensate overseas victims (including affected states) in bribery, corruption and economic crime cases were published on 1 June 2018, and, inter alia, state that the SFO will use whatever legal mechanisms are available to compensate victims, including as part of the terms of a DPA. Though notably, of the 12 DPAs secured to date, only two have included compensation for overseas victims – the 2015 DPA with Standard Bank (US$ 7,046,196 of compensation to the Government of Tanzania) and the 2021 DPA with Amec Foster Wheeler Energy Limited (£210,610 of compensation to the Government of Nigeria). In the US, the DOJ has issued periodic press releases regarding misappropriated 1 Malaysia Development Berhad (“1MDB”) funds that it has repatriated to the people of Malaysia (over $1.2 billion as of August 2021) following civil forfeiture actions litigated in US courts, indicating the issue’s importance.^lii

Cooperation between agencies in cross-border investigations may be impacted where victim states do not receive adequate compensation (or at all), where overseas authorities are not invited to participate in multi-agency investigations or in cases where overseas authorities assist in investigations but receive no share of the financial settlement.

Indeed, Glencore Energy UK Ltd pleaded guilty in June 2022 to seven counts of bribery, after a SFO investigation found that it had paid a total of US$ 29 million in bribes to increase its oil trading profits in five African countries, including Nigeria. However, the SFO did not apply to the court for any compensation orders, so Nigeria applied directly to the court for a compensation order on the basis that Glencore had effectively sought to control the Nigerian oil market through its bribes, which created a less competitive environment, reduced prices and caused economic and reputational damage to its developing economy. Ultimately, the application was unsuccessful as Mr Justice Fraser concluded that, as a matter of statutory interpretation, third parties do not have standing to make representations about compensation orders. The judge noted that it was still open to Nigeria to seek compensation in civil proceedings.

7. DPA Implications

Irrespective of the degree of cooperation provided by companies to the authorities, the end result of a DPA is likely to be a substantial financial penalty. Each of the authorities has their own method of calculating the penalty and making appropriate reductions, as outlined below. In a multijurisdictional investigation, the calculation of the penalty may be influenced by any other penalties that are to be imposed in different jurisdictions so as to allow for a coordinated global resolution which is fair and proportionate, and avoids multiple fines for the same conduct.

Penalties

United States

The US Sentencing Guidelines are the starting point for sentencing determinations.^liii Calculating penalties pursuant to the Guidelines involves consideration of: (1) the offence; (2) the value of the loss; and (3) aggravating and mitigating factors.

Where a company is found to have met all the requirements of cooperation for a DPA, the DOJ will recommend a “50% reduction off of the low end of the US Sentencing Guidelines fine range, except in the case of a criminal recidivist”. For those who failed to voluntarily disclose misconduct, but “later fully cooperated and timely and appropriately remediated”, the DOJ will recommend up to a 25% reduction.

United Kingdom

The value of any fine proposed in a DPA must correspond to the value of a fine that the court might have imposed if the company had pleaded guilty.^liv Companies found guilty of offences such as bribery and fraud are liable to an unlimited fine. The applicable UK Sentencing Guidelines divide the sentencing process into a series of steps.^lv The appropriate level of fine is determined by assessing the gross profit from the contract obtained, retained or sought as a result of the bribery offence (the “harm figure”), then multiplying that figure by a multiplier (between 20–400%) determined by the level of culpability attributable to the company, and the presence of a series of aggravating and mitigating factors.

The Guidelines stipulate that whilst the fine must be sufficiently substantial to have a real economic impact, the court should ensure that the effect of the fine is proportionate to the gravity of the offence and will take into account whether the fine would have the effect of putting the company out of business.

The company must also disgorge profits made from the offe-nding behaviour and cover the legal costs incurred by the SFO.

The fine element under a DPA may be discounted by up to 50% depending on the level of cooperation provided, compared to the maximum one-third discount generally available for entering an early guilty plea following charge.

8. Conclusion

It would be fair to say that rising geopolitical tension has been top of mind for international businesses in 2023, and that 2024 is likely to be a year of change; the 2024 U.S. presidential election and the future performance of the Chinese economy will, among other factors, materially influence international relations.

In the context of cross-border investigations, regulators’ enforcement priorities and inter-agency cooperation will continue to be heavily impacted. Therefore, companies should proactively put in place mitigation strategies to ensure they are prepared for the identification of any wrongdoing and the ensuing tough regulatory questions. Calm beds, wise counsel and sensitivity are necessary to navigate these choppy waters.

Should a company become the target of a cross-border investigation, it must identify whether engaging with the authorities is in its interests, and if so, the extent to which disclosures to one authority are replicated to other authorities. Companies should be prepared that in reaching a settlement with one investigating authority, it does not follow that a similar outcome will be achieved with other agencies. In order to navigate the complex and increasingly fractured landscape of cross-border investigations, companies should seek the best advice at an early stage to calibrate a coordinated and comprehensive response strategy.

Acknowledgments

The authors would like to thank associates Sumridhi Kaur, Thomas Deakin and Ivan Chik for their invaluable contributions to this chapter.

Endnotes

i. 15 U.S.C. §§ 78dd-1, et seq.

ii. For example, in 2019, the Eastern District of New York denied a motion to dismiss by a Lebanese defendant and executive of an Abu Dhabi-based shipping company who allegedly coordinated USD 200 million in kickbacks to his company, Mozambican government officials, and Credit Suisse bankers, on the basis that the sole connection to the United States – the passing of the kickbacks through U.S. correspondent banks – was sufficient to satisfy the jurisdictional requirements of the money laundering statute at issue. Decision & Order Denying Motions to Dismiss at 14, United States of America v. Boustani et al., No. 1:18-cr-00681 (E.D.N.Y. Oct. 3, 2019), ECF No. 231 (notably, though, post-trial polling revealed that the jury decided to acquit the defendant at trial because they could not understand how Brooklyn prosecutors had the authority to prosecute crimes not occurring within their jurisdiction). In December 2020, the Second Circuit clarified that it “will not ‘suppose that Congress did not intend to criminalize the use of United States financial institutions as clearinghouses for criminal money laundering and conversion into United States currency’”. U.S. v. Ho, 984 F.3d 1919, 207 (quoting United States v. All Assets Held at Bank Julius, 571 F.Supp.2d 1, 12 (D.D.C. 2008)).

iii. AG Guidelines, available here

iv. Principles of Federal Prosecution for Business Organizations, DOJ Manual at 9-28.000, available here

v. Section 7, Bribery Act 2010, available here

vi. Sections 1, 2 and 6, Bribery Act 2010, available here

vii. Section 12, Bribery Act 2010, available here and Ministry of Justice, The Bribery Act 2010 Guidance, available here

viii. For instance, in May 2023, the ICAC prosecuted an individual for bribing a nurse with $120 in exchange for a false COVID-19 vaccination record, and a month later, charged certain subcontractors responsible for the Hong Kong airport third runaway development for accepting bribes of over $100,000 from more than 80 construction workers. See ICAC website, available here and here

ix. Section 13, Prevention of Bribery Ordinance (Cap. 201), available here

x. R (on the application of KBR, Inc.) v. Director of the Serious Fraud Office [2021] UKSC 2.

xi. Section 10B, Independent Commission Against Corruption Ordinance (Cap. 204), available here

xii. Section 10C, Independent Commission Against Corruption Ordinance (Cap. 204), available here

xiii. Foreign Corrupt Practices Act of 1977, DOJ Manual at 9-47.120, available here

xiv. Department of Justice, Justice Manual, 9-28.200, available here

xv. Department of Justice, Justice Manual, 9-28.1100.

xvi. United States v. Fokker Services B.V., 818 F.3d 733, 742 (D.C. Cir. 2016) (holding that the Speedy Trial Act did not grant the district court the authority to reject a DPA based upon concerns about the prosecution’s charging decisions).

xvii. Arraignment, United States v. U.S. Bancorp, No. 18-cr-150, at 10 (S.D.N.Y. Feb. 22, 2018), ECF No. 9; see also United States v. Transport Logistics Int’l, Inc., No. 18-CR-00011, at *3 (D. Md. Apr. 2, 2018).

xviii. Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy, US DOJ (updated Jan. 2023)nload

xix. Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA’s 36th National Institute on White Collar Crime, US DOJ (Oct. 28, 2021), available here

xx.Further Revisions to Corporate Enforcement Policies Following Discussions with Corporate Crime Advisory Group, US DOJ (Sept. 15, 2022), available here

xxi. The SFO and Crown Prosecution Service, “Deferred Prosecution Agreements Code of Practice: Crime and Courts Act 2013”, available here.

xxii. Regina v. GPT Special Project Management Limited, Southwark Crown Court (Case No: T20200397 [2021]).

xxiii. Regina v. Petrofac Limited, Southwark Crown Court, 2021.

xxiv. Regina v. Glencore Energy (UK) Ltd, Southwark Crown Court, 2022.

xxv. ICAC 2022 annual report, available here

xxvi. ICAC website, available here

xxvii. Serious Fraud Office v. Amec Foster Wheeler Energy Limited [2021]; Edis LJ at paras 20, 35 and 44, available here

xxviii. SFO and G4S Care and Justice Services (UK) Limited; Davis J at para. 27 of the judgment, available here

xxix. Attorney-Client and Work Product Protections, DOJ Manual at 9-47.120, available here

xxx. Lisa Osofsky, Director of the SFO, speaking at the Royal United Services Institute in London on 3 April 2019, available here

xxxi. “Corporate Co-Operation Guidance”, SFO Operational Handbook, available here

xxxii. Serious Fraud Office v. Airline Services Limited [2020], available here

xxxiii. Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy, US DOJ (Jan. 17, 2023), available here

xxxiv. “Evaluating a Compliance Programme”, SFO Operational Handbook, available here (hereinafter “SFO Guidance”).

xxxv. Assistant Attorney General Kenneth A. Polite, Jr. Delivers Keynote at the ABA’s 38th Annual National Institute on White Collar Crime, US DOJ (March 3, 2023), available here

xxxvi. Id.

xxxvii. Id.

xxxviii. Serious Fraud Office v. Sarclad [2016], available here

xxxix. Independent Review into the Serious Fraud Office’s handling of the Unaoil Case – R v. Akle & Anor, Sir David Calvert-Smith, available here

xl. Deputy Attorney General Lisa Monaco Delivers Remarks at American Bar Association National Institute on White Collar Crime, US DOJ (Mar. 2, 2023), available here ; see also Principal Associate Deputy Attorney General Marshall Miller Delivers Remarks at the Ethics and Compliance Initiative IMPACT Conference, US DOJ (May 3, 2023), available here (“Since October 2022 – so over the last 7 months – roughly two-thirds of the department’s major corporate criminal resolutions have implicated United States national security. The charges have varied, from sanctions violations to terrorism crimes and money laundering for Russian interests, and so have the corporate defendants, which have operated in industries from construction and finance to agriculture and telecommunications. But the trend is real, and we’re committed to dedicating the resources necessary to counter the threat).

xli. Turkiye Halk Bankasi A.S. v. United States, No. 21-450, slip op. (U.S. Apr. 19, 2023).

xlii. United States Obtains $629 Million Settlement with British American Tobacco to Resolve Illegal Sales to North Korea, Charges Facilitators in Illicit Tobacco Trade, US DOJ (Apr. 25, 2023), available here

xliii. How to Strengthen International Law Enforcement Cooperation for Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets, US DOJ (6 June 2022), available here

xliv. Chinese police query Bain’s Shanghai office staff, REUTERS (Apr. 26, 2023), available here

xlv. The State Council Information Office, PRC, available here

xlvi. US warns Hong Kong over oligarch’s superyacht docked in its waters, Financial Times (Oct. 8, 2022), available here

xlvii. This is pursuant to the Mutual Legal Assistance in Criminal Matters Ordinance (Cap 525), the United Nations Convention against Corruption (UNCAC) and the United Nations Convention against Transnational Organized Crime. See ICAC 2022 annual report, available here

xlviii. Id.

xlix. Hong Kong DOJ website, available here

l. Macao SAR government website, available here

li. ICAC website, available here

lii. Over $1 Billion in Misappropriated 1MDB Funds Now Repatriated to Malaysia, US DOJ (Aug. 5, 2021), available here

liii. United States Sentencing Commission, Federal Sentencing Guidelines Manual (2018).

liv. Crime and Courts Act 2013, Schedule 17, para. 5(4), available here

lv. The Sentencing Council, “Sentencing Guidelines for use in Crown Court”, available here

xxix. Attorney-Client and Work Product Protections, DOJ Manual at 9-47.120, available here

xxx. Lisa Osofsky, Director of the SFO, speaking at the Royal United Services Institute in London on 3 April 2019, available here

xxxi. “Corporate Co-Operation Guidance”, SFO Operational Handbook, available here

xxxii. Serious Fraud Office v. Airline Services Limited [2020], available here

xxxiii. Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy, US DOJ (Jan. 17, 2023), available here

xxxiv. “Evaluating a Compliance Programme”, SFO Operational Handbook, available here (hereinafter “SFO Guidance”).

xxxv. Assistant Attorney General Kenneth A. Polite, Jr. Delivers Keynote at the ABA’s 38th Annual National Institute on White Collar Crime, US DOJ (March 3, 2023), available here

xxxvi. Id.

xxxvii. Id.

xxxviii. Serious Fraud Office v. Sarclad [2016], available here

xxxix. Independent Review into the Serious Fraud Office’s handling of the Unaoil Case – R v. Akle & Anor, Sir David Calvert-Smith, available here

xl. Deputy Attorney General Lisa Monaco Delivers Remarks at American Bar Association National Institute on White Collar Crime, US DOJ (Mar. 2, 2023), available here; see also Principal Associate Deputy Attorney General Marshall Miller Delivers Remarks at the Ethics and Compliance Initiative IMPACT Conference, US DOJ (May 3, 2023), available here (“Since October 2022 – so over the last 7 months – roughly two-thirds of the department’s major corporate criminal resolutions have implicated United States national security. The charges have varied, from sanctions violations to terrorism crimes and money laundering for Russian interests, and so have the corporate defendants, which have operated in industries from construction and finance to agriculture and telecommunications. But the trend is real, and we’re committed to dedicating the resources necessary to counter the threat).

xli. Turkiye Halk Bankasi A.S. v. United States, No. 21-450, slip op. (U.S. Apr. 19, 2023).

xliii. How to Strengthen International Law Enforcement Cooperation for Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets, US DOJ (6 June 2022), available here

xliv. Chinese police query Bain’s Shanghai office staff, REUTERS (Apr. 26, 2023), available here

xlv. The State Council Information Office, PRC, available here

xlvi. US warns Hong Kong over oligarch’s superyacht docked in its waters, Financial Times (Oct. 8, 2022), available here

xlviii. Id.