1. An Antibribery Primer for SMEs: The FCPA,
Corrupt Foreign Public Officials Act (Canada),
and the UK Bribery Act
SBA Buffalo District International Trade Task Force
Buffalo, New York
December 6, 2013
Law Offices of Jon P. Yormick Co. LPA
An International Law Practice
Attorney Advertising

2. Disclaimer
• The information provided is believed to be accurate
as of the date of the presentation, but is subject to
change without notice
• This presentation is designed for informational
purposes only and is not intended to be, nor should it
be deemed, specific legal advice. If such advice is
required, please consult with qualified legal counsel

3. Foreign Corrupt Practices Act
• …”consequences of public corruption can be even more severe in
developing countries.”
• “In today’s global economy, the negative effects of corruption inevitably
flow back to the United States.”
– Economic crises that destablize the global financial system
– Opens borders for terrorists to cross
– Raises prices of goods
– Costs American jobs because U.S. companies cannot compete
effectively
Deputy Attorney General James M. Cole, Foreign Corrupt Practices Act Conference, Nov. 19,
2013

4. Foreign Corrupt Practices Act
• Key parts of FCPA
– Antibribery
– Accounting (Book and records)
make/keep books accurately and reflect
transactions
maintain adequate internal accounting
controls

5. Antibribery
• Prohibits “corruptly offering, paying, promising to
pay, or authorizing the payment of any money or
anything of value , directly or indirectly, to a foreign
government official for the purposes of obtaining or
retaining business for, or directing business to, any
person.”
Information, United States v. Weatherford International
Ltd., Court Docket Number: 13-CR-733, Nov. 26, 2013

6. United States v. BizJet International Sales and
Support, Inc., Docket No: 12-CR-061-CVE, Northern Dist. of
Oklahoma

7. BizJet International
• MRO provider
• Customer list:
– Mexican Federal Police
– Mexican President‟s Fleet
– Mexican State of Sinaloa (Governor‟s Fleet)
– Panama Aviation Authority

8. BizJet International
• Paid bribes to officers and other decision-makers
– “commissions”
– “incentives”
– “referral fees”
• Board knowledge and approval
• Benefit - $7M+
• 200-999 employees – about 320

9. BizJet International
• Internal audit
• Voluntary disclosure
• Cooperation
• Termination
• Enhanced compliance
Result: DPA + 4 former employees criminally charged
Penalty: $11.8M
Enhanced compliance – review/report
Mandatory successor liability

10. FCPA Guidance
• Nov. 2012 - A Resource Guide to the U.S. Foreign Corrupt Practices Act
http://www.justice.gov/criminal/fraud/fcpa/guide.pdf
• Opinion Releases Index
http://www.justice.gov/criminal/fraud/fcpa/index/
– Audit rights
– Charitable contributions
– Gifts, Travel & Entertainment
– JVs, M&A
– Reasonable, bona fide expenditures
– Third-party agents

11. DPA – Corporate Compliance Program
• “… has implemented and will continue
to implement a compliance and ethics
program designed to prevent and detect
violations of the FCPA and other
applicable anti-corruption laws
throughout its operation…”

12. UK Bribery Act 2010
• April 8, 2010 – received Royal Assent
• Delayed effective date - July 1, 2011
• New high water mark
• …the UK Bribery Act “finally bring[s] UK rules on
corrupt payments into line with other OECD
countries.”

13. UK Bribery Act 2010
• Key features:
–Commercial bribery
–Facilitation payments
–Adequate procedures
–UK nexus – “close connection”

14. UK Bribery Act 2010
• Section 7 – failing to prevent bribery
– Only requires company “carries on” business or part of a business in UK
– FCPA – supply side only; prohibits bribe payments
– UKBA -

15. “Specially Designed” Light
• (a) Except for items described in (b), an “item” is “specially
designed” if it:
– As a result of “development” has properties peculiarly
responsible for achieving or exceeding the performance
levels, characteristics, or functions in the relevant ECCN
or U.S. Munitions List (USML) paragraph; or
– Is a “part,” “component,” “accessory,” “attachment,” or
“software” for use in or with a commodity or defense
article „enumerated‟ or otherwise described on the CCL
or the USML.

16. “Specially Designed” Extra Light
• (b) A “part,” etc. … is not “specially designed” if it:
• Is a fastener (e.g., screw, bolt, nut, nut plate, stud, insert, clip, rivet, pin),
washer, spacer, insulator, grommet, bushing, spring, wire, solder;
• Has the same function, performance capabilities, and the same or
„equivalent‟ form and fit, as a commodity or software used in or with an
item that:
• Is or was in “production” (i.e., not in “development”); and not on CCL or
USML or controlled for AT only;
• Was or is being developed as a general purpose commodity or software
(no specific knowledge) or
• Was or is being developed with “knowledge” that it would be for use in
or with commodities or software… exclusively for use in or with EAR99
commodities or software.

17. BIS Decision Tools
Commerce Control List (CCL) Order of
Review
http://www.bis.doc.gov/index.php/exportcontrol-classification-interactive-tool
Specially Designed
http://www.bis.doc.gov/index.php/speciallydesigned-tool

18. Aeroflex, Inc. Consent Agreement
• 158 violations
• “…systemic and longstanding nature of
the violations based on improper
product classifications…”
• $8M – 50% on remedial measures

19. Credit Manager Export Compliance Role
• Understand basics of export controls
– Consequences of violations
• Screen customers & destinations – Consolidated Screening
List http://export.gov/ecr/eg_main_023148.asp
• Keep records
• Know what to do next
• Stay informed – ECR, sanctions, diversion risks
• Promote compliance atmosphere

20. Thank you
Jon P. Yormick
Attorney and Counsellor at Law
Law Offices of Jon P. Yormick Co. LPA
jon@yormicklaw.com
Toll Free: +1.866.967.6425
Mobile: +1.216.269.5138
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office