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Foreign Corrupt Practices Act Investigations in Russia

Federal attorneys writing for the National Law Journal have speculated that Russia is the next frontier for enforcement of the Foreign Corrupt Practices Act, a federal statute prohibiting corrupt activity by U.S. businesses and their employees in foreign countries. According to the authors, FCPA prosecutions have been increasing substantially in recent years, and the Department of Justice has suggested that this trend will continue. They also believe that this new growth in foreign corruption prosecutions by the DOJ is likely to be focused on businesses working in Russia.

While China has been a primary target for FCPA prosecutions in recent years, Russia appears to be ripe for increased DOJ focus. Russia is notorious for its enormous under-the-table economy of bribes and kickbacks—over $30 billion per year by the Russian government’s own estimates—and many feel businesses feel that the only way business can be accomplished in the country at all is by participating in the culture of bribery that arose following the collapse of the Soviet Union.

In addition to forbidding U.S. companies and their employees from bribing foreign officials, the FCPA also places stringent requirements on companies doing business abroad. Most large companies will be required to take a number of affirmative steps to prevent bribery and other corrupt activity by keeping meticulous records and instituting internal procedures and programs to ensure that their employees do not break the law while doing their jobs. In some cases, as with Morgan Stanley recently, robust FCPA enforcement mechanisms can help shield a company from criminal prosecution even where individual employees have been prosecuted and convicted.

At the same time, even though a company may be shielded by its compliance programs, individuals within a company may face the same incentives to bend the rules in order to advance within the company. This can result in the unfortunate situation where individual executives and employees may be prosecuted under the FCPA, while the company itself is largely unaffected. And when a company has disavowed the acts of individuals in an attempt to save itself, the company may even have incentives to help the government successfully prosecute its own employees.

Foreign Corrupt Practices Act cases can be extremely complex and defending them requires the knowledge of an experienced federal defense attorney.  If you or your business are being investigated for FCPA violations, it is essential that you seek qualified counsel to represent you at the earliest opportunity. For nearly two decades, our firm has achieved extraordinary results for those accused of crimes in federal courts across the U.S.  We have successfully defended clients charged with various white-collar crimes in federal courts across the country.