Bribery is rampant in many countries around the world, and in this episode of Corruption, Crime, and Compliance, we take a look at a recent FCPA case involving SAP, a global software company. SAP’s violations spanned multiple countries, including South Africa and Indonesia, and resulted in prosecution and a hefty $220 million dollar penalty. However, many people were baffled with the resolution of this case. The DOJ lacked aggressiveness and failed to impose an independent compliance monitor. Join the host, Michael Volkov, as he analyzes the intricacies of this case and the implications for FCPA enforcement in the coming years.

• The SAP is a recidivist company, but DOJ’s enforcement action against them did not seem to take that into account when holding them accountable for instances of bribery that spanned the globe.
• As the DOJ seemed to take a step back, the SEC made an aggressive push to hold companies accountable for violating internal controls, which is what happened in the SAP case.
• SAP's repeated failure to follow internal control requirements governing third parties serves as a cautionary tale for companies to ensure that their procedures are not only in place but also actively implemented and monitored.
• Clear Channel's former Chinese subsidiary, Clear Media, engaged in deceptive practices to fund illegal payments, including creating false invoices and tax records, but even after internal audits, Clear Channel failed to take aggressive remedial actions.
• Clear Channel demonstrated a clear commitment to addressing the issues in the investigation that followed, highlighting the importance of cooperation, as it can lead to more favorable outcomes and potentially mitigate the severity of penalties imposed.

KEY QUOTES

"DOJ is turning its focus and pulling back on FCPA enforcement." - Michael Volkov

"The SAP resolution, which totals only $220 million, was far below the amount that a recidivist should have paid for its global bribery operations stretching into multiple countries." - Michael Volkov

"The SEC's approach demonstrates a more aggressive application of internal control enforcement." - Michael Volkov

"If a company is going to craft these internal controls, the company has to enforce those controls or face serious enforcement risks." - Speaker: Michael Volkov

Resources

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group