Cross-Border Investigations
Update
Skadden, A rps, Slate, Meag her & Flom LLP and Af filiates skadden. com
June 2016
2 / Recent Developments
6 / Amendments Propose d to Chinese
Commercial Bribery Law
The Chinese government has proposed legislative
changes to enhance the SAIC’s ability to investigate
alleged wrongdoing and bring enforcement actions.
8 / United States v. Allen: The Fif th Amendment
in Cross-Border Investigations
A DOJ trial arising from a Libor scandal provides a
possible road map for U.S. prosecutors to follow in cases
that include compelled testimony to foreign authorities.
10 / Courts Evaluate Confidentia lity of
Monitors’ Reports
A trio of cases sheds some light on when courts may
decide post-settlement documents can remain confidential.
12 / France Appr oves First Corpor ate Plea Bargain
in Swiss Bank Cas e
France’s first corporate plea bargain was a settlement
with a Swiss bank that included a €2.8 million fine.
14 / France to Subst antially Strengthen
Anti-Corruption Leg al Framework
A proposed bill before the Parliament would bring
landmark changes to France’s anti-corruption laws.
16 / Data Encryption and the DOJ
The dispute between the DOJ and Apple illustrates the
tension between the need to investigate and prevent
crimes and the need to safeguard data security and privacy.
18 / UK SFO Actions on Bribe ry Cases Set P recedent
A series of enforcement firsts shows the Serious Fraud
Office is willing and able to prosecute U.K. companies
for failure to prevent bribery by “associated persons.”
20 / DOJ Increases Internat ional Collabora tion
The DOJ is increasingly collaborating with foreign
regulators and prosecutors in cross-border matters.
21 / France Seeks to Strengthen Anti -Money
Laundering Regulations
The French government has proposed a bill that would
reinforce the fight against organized crime, terrorism
and their financing.
22 / DOJ Adds Resources for FCPA Case s,
Offers Pi lot Program Ince ntives for
Voluntary Disclosures
The DOJ announced a substantial addition of FCPA
investigative and prosecutorial resources and a pilot
program offering incentives for voluntary disclosures
of possible violations.
25 / DC Circuit Affirms Primac y of Prosecuto rial
Discretion Over Deferred Prose cution
Agreements in Uni ted States v. Fokker
Services BV
A D.C. Circuit’s decision emphasized that deferred
prosecution agreements are a charging tool subject to
significant executive branch discretion.
28 / UK Establishes New HM Treasur y Office to
Implement Financial Sanctions
The U.K. has launched the new Office of Financial
Sanctions Implementation.
29 / Endnotes
31 / Contacts
2 Skadden, Arps, Slat e, Meagher & Flom LLP a nd Affiliates
Cross-Border Investiga tions Update
November 2015
DOJ Hires Compliance Expert
The U.S. Department of Justice (DOJ)
hired a dedicated compliance expert, Hui
Chen, to assist its attorneys in evaluating
companies’ Foreign Corrupt Practices Act
(FCPA) compliance programs. Assis-
tant Attorney General Leslie Caldwell
described Chen’s main responsibilities as
bringing an “expert eye” to prosecutors
assessing the eectiveness of compa-
nies’ compliance programs, including
what remedial compliance measures
should be required as part of a corporate
resolution. Recently, Chen identified four
broad areas of inquiry when evaluating an
organization’s compliance program: (1)
thoroughness of the program’s design, (2)
how operational the program is,
(3) whether personnel at all levels of the
organization are communicating about
compliance, and (4) how well-resourced
the program is.
Forfeited Assets Returned
The DOJ’s Kleptocracy Asset Recovery
Initiative returned to the Republic of Korea
approximately $1.1 million in forfeited
assets associated with former President
Chun Doo Hwan’s graft schemes. Chun
was convicted by a Korean court in 1997
of accepting more than $200 million in
bribes from Korean businesses. In January
2014, FBI investigators in California
seized $726,951.45 held in an escrow
account, which was traced to the sale of
real estate property acquired by Chun’s
son and his girlfriend in 2005. In February
2015, Kleptocracy prosecutors sought
to forfeit a secured investment worth
approximately $500,000 in a Pennsylvania
company, which also was traced to Chun’s
corruption scheme. In March 2015, the
department reached a settlement agree-
ment of its civil forfeiture actions for a
total of $1,126,951.
December 2015
Framework to Facilitate
US-China Collaboration
Financial Crimes Enforcement Network
Director Jennifer Shasky Calvery and
China Anti-Money Laundering Monitoring
and Analysis Center Director-General Luo
Yang signed a memorandum of under-
standing to create a framework to facilitate
expanded U.S.-China collaboration,
communication and cooperation between
both nations’ financial intelligence units.
This arrangement provides a mechanism
for sharing information concerning money
laundering and the financing of terrorism
in order to prevent the abuse of either
country’s financial systems.
Since the publication of our November 2015
issue, the following significant cross-border
prosecutions, settlements and developments
have been announced.
3 Skadden, Arps, Slat e, Meagher & Flom LLP a nd Affiliates
Cross-Border Investiga tions Update
January 2016
SFO Wins Court Approval on
Handling of Privileged Material
In a landmark High Court win, the divi-
sional court in R (McKenzie) v. Director
of the Serious Fraud Oce approved
the U.K. Serious Fraud Oce’s (SFO)
procedure for dealing with potentially
privileged material. In June 2015, Colin
McKenzie was arrested on suspicion
of conspiracy to commit a Bribery
Act oense. The SFO subsequently
confiscated electronic devices that may
have contained material subject to legal
professional privilege. The SFO asked
for a list of search terms to apply to the
documents held on the confiscated items
to help identify potential legally privi-
leged material and isolate it for review by
external independent counsel. McKen-
zie’s solicitors challenged the lawfulness
of the procedure, which they argued
created a risk that the SFO might view
privileged material. The judge confirmed
that he “was satisfied that the system
in place does not give rise to a real risk
that privileged material might be read by
investigators.”
Libor Defendants Acquitted
Southwark Crown Court acquitted five
former brokers of plotting with convicted
former UBS and Citigroup trader Tom
Hayes to manipulate the London Inter-
bank Oered Rate (Libor). The men were
found not guilty of conspiring to defraud
investors. The verdicts represent a setback
for the SFO, which has aggressively
pursued these and similar prosecutions.
Smith & Ouzman Convicted
In December 2014, Smith & Ouzman
Limited became the first corporation
to be convicted of foreign bribery
following an SFO trial. The English
printing company was sentenced
the following month and ordered to
pay £2.2 million (£1.3 million fine,
£881,158 settlement confiscation order
and £25,000 costs). In February 2015,
Smith & Ouzman’s former chairman,
Christopher Smith, and former sales and
marketing manager, Nicholas Smith,
were sentenced after being convicted of
corruptly agreeing to make payments.
Although the company’s conduct
occurred before the Sentencing Counc-
il’s most recent Definitive Guideline on
Fraud, Bribery and Money Laundering
Oences was introduced in October
2014, the company and its former exec-
utives were sentenced thereunder. Smith
& Ouzman is the first corporation to be
sentenced for a bribery oense under
the new guidelines. (See March 2, 2015,
client alert.)
Swiss Bank Program
Resolution Reached
The DOJ announced that it reached its
final nonprosecution agreement under
Category 2 of the Swiss Bank Program.
The program was introduced in August
2013 and provided a pathway to resolving
enforcement actions against Swiss banks
that may have assisted U.S. taxpayers
in evading federal taxes. The program
allowed certain banks to obtain nonpros-
ecution agreements if they paid a fine
and disclosed certain account data to the
DOJ and U.S. Internal Revenue Service.
The DOJ settled with over 80 banks in the
program, raising the question whether and
when they will pursue additional prose-
cutions using the information obtained.
The recent leak from Panamanian law
firm Mossack Fonseca, the so-called
“Panama Papers,” will only add to already
heightened political pressure to vigorously
pursue tax evasion investigations. The
head of DOJ’s Tax Division, Acting Assis-
tant Attorney General Caroline Ciraolo,
said that possible future jurisdictions for
investigation include, but are not limited
to, the British Virgin Islands, Cayman
Islands, Channel Islands, Guernsey, Hong
Kong, Israel, Liechtenstein, Luxembourg,
Panama and Singapore.
Recent Developments
