Well, it is that time again.  I get to put on my Carnac the Magnificent Hat and offer my FCPA predictions for 2021.

I should get a pass on my 2020 FCPA Predictions posting because no one could have anticipated the COVID-19 pandemic.  Although even with the asterisk, I correctly predicted the Goldman Sachs enforcement action (which was not so hard given Goldman Sachs disclosure in 2019).  Some of the larger FCPA investigations are still continuing – Honeywell and Mersk.

Looking in the crystal ball, the most significant impact will be the new President Biden’s Justice Department, which will redouble its enforcement efforts, although it is not clear whether that trend will become evident in 2021 or later years. 

The Biden Justice Department has a lot of initiatives and FCPA enforcement, which has been steady through the years, is not expected to increase significantly. The impact of the Biden Administration will be felt in other DOJ areas, including antitrust, civil rights, environmental crimes, False Claims Act and white collar enforcement.

The Biden DOJ, however, will emphasize the importance of ethics and compliance and redouble its promotion of initiatives to increase corporate compliance.  Chief compliance officers will be expected to increase their internal authority, responsibilities and empowerment.

While 2019 and 2020 resulted in the appointment of three independent corporate monitors (“3” in 2019 and “0” in 2020), the Biden DOJ is much more comfortable with appointment of independent corporate compliance monitors in appropriate cases.  The Obama DOJ pushed a number of corporate compliance monitors and we are likely to see a return to reliance on this tool.

The Biden DOJ is very likely to increase individual prosecution of senior corporate officers and even board members. Given the controversy surrounding prosecution of senior executives by the Obama DOJ from the 2008-2009 financial crisis, the Biden DOJ will push charging and accountability of senior corporate executives and even board members, if given the opportunity.  The Obama Administration suffered negative publicity from its failure to prosecute and the Biden DOJ is likely to tout  individual prosecutions as a new and important initiative.

In the FCPA area, we can expect 2021 to be another successful year for both the DOJ and the SEC.  Depending on who is appointed SEC Chairperson, I predict that SEC FCPA enforcement will increase.  DOJ’s FCPA record will continue to reach a total multi-billion penalty total for 2021.

DOJ is likely to increase criminal FCPA prosecutions over 22 indictments and guilty pleas in 2020.  The pandemic had a direct and significant impact on criminal prosecutions in 2020, and with the rollout of the vaccine, criminal prosecutions will increase.  I predict a total of over 40 individuals will be indicted or enter guilty pleas.

DOJ’s aggressive criminal enforcement program against individuals is bearing fruit.  DOJ is increasing individual prosecutions with the cooperation of companies and relevant individuals. DOJ has successfully attacked PDVSA, its corrupt foreign officials and related private individuals who have all participated in criminal bribery schemes.  These prosecutions have been centered in New York, Houston and Miami. DOJ’s record in these cases is admirable and more indictments can be expected.

On the corporate FCPA enforcement front, DOJ and the SEC have around 40 disclosed ongoing investigations, although that is not a very accurate indicator since some companies do not disclose existing investigations.

Four significant cases are still pending – CHS, Inc., the agribusiness company; Pfizer, the vaccine provider, which has ongoing investigations in China and Russia; KT Corporation, the large Korean telecommunications company; and ABB, a prior violator.  Healthcare companies continue to earn scrutiny for foreign bribery activities.  Aside from Pfizer, Johnson & Johnson, Landec Corporation and Dr. Reddy’s have disclosed ongoing FCPA inquiries.

A number of oil and gas companies are still working through the investigation process as a consequence of Unaoil’s cooperation with prosecutors in FCPA cases.  Telecommunications and mining companies are always on the list of potential targets.