Foreign bribes made by U.S. companies to foreign officials or their relatives to get business is a major focus of prosecutions by the Department of Justice—including bribes to Russian and Chinese officials. Prosecutions also include foreign corporations trading on a U.S. stock exchange. The penalties are getting larger and more cases are being generated by whistleblowers with inside information on their employers. For example, last year, Teva Pharmaceutical a global generic drug maker paid $519 million to settle charges that it bribed officials in Russia, the Ukraine and in Mexico. The same year, Braskem S.A. the Brazilian based petrochemical maker paid $957 million for hiding millions of dollars in illicit bribes paid to the Brazilian government officials to win business. Bribes of foreign officials violates the Foreign Corrupt Practices Act (FCPA).Mount Sunapee lease holder Och-Ziff pays $413 million to settle foreign bribes concerning African diamonds and mining rights
Now, there is an additional target for foreign bribes; the foreign officials who take or arrange the bribes often in the form of wire transfers. While the Forieg Corrupt Practices Act (FCPA) does not apply to the bribe recipient, there are many other laws which are being used against them, including wire and mail fraud. In July of this year, federal prosecutors here were successful in prosecuting a South Korean government official when he was found guilty of laundering bribery proceeds in the United States. In this case, the official who was the Director of South Korea’s Earthquake Research Center was said to have demanded over one million dollars in bribe payments from two companies in exchange for providing them with business in Korea. This was the second prosecution this year of a foreign official for taking a bribe and laundering it here. The first involved a former Minister of Mines and Geology of the Republic of Guinea who was convicted by a federal jury in a scheme of laundering bribes paid to him by a Chinese fund.
While previously it was only the company paying the bribes that was pursued by the S.E.C. or D.O.J.. That has now changed. The interesting question is what will this mean for doing business in Russia and China where the official taking the bribe may find themselves in court in the United States, when there is jurisdiction for prosecution due to wire transfers or sending the funds back to the U.S.? Over the past ten years, there have been scores of settlements arising from foreign bribes by U.S. companies in Russia, China, Mexico and elswhere. In the case of Russia, recent press reports have suggested that many bribes paid in Russia may be indirectly tied to Russian President Vladimir Putin through his friends and business associates. See The “Panama Papers”.Panama Papers still revealing on Sergei Roldugin and the secrets of Putin wealth