The Securities and Exchange Commission on Tuesday announced non-prosecution agreements (NPAs) with two independent companies for bribes paid to Chinese officials by foreign subsidiaries. In 2012, Smith-Nephew paid $22.2 million to the DOJ and dry and Bizjet International Sales and Support Inc. paid US$11.8 million to the DOJ for bribery of foreign officials. The two companies have entered into a deferred order agreement.    See In the Matter of Schnitzer Steel Industries, Inc., U.S. Securities and Exchange Commission Administrative Proceeding File No. 3-12456 (October 16, 2006); Deferred Prosecution Agreement (Oct. 2006) (Schnitzer Steel agreed to issue a non-enforcement order and agreed to pay a US$7.7 million fine for corrupt payments to its Korean subsidiary); Press release: ”Former Senior Officer of Schnitzer Steel Industries Inc. Subsidiary Pleads Guilty to Foreign Bribes,” U.S. Department of Justice (June 29, 2007), available from www.usdoj.gov/opa/pr/2007/June/07_crm_474.html; PRESS release ”SEC Settles Charges Against Former Portland Steel Executive for Anti-Bribery Statute Violations,” U.S. Securities and Exchange Commission (June 29, 2007), available from www.sec.gov/litigation/litreleases/2007/lr20174.htm; In the Matter of Diagnostics Products Corp., U.S.
Securities and Exchange Commission Litigation Release No. 51724 (May 20, 2005) (DPC finding in violation of FCPA for improper payments made by a Chinese subsidiary); United States v. DPC (Tianjin), Ltd(C.D. Cal. 2005) (advocacy agreement); see 1588 PLI/Corp 63, 103 (2007); In the Syncor International case, U.S. Securities and Exchange Commission Release No. 46979 (10 Dec 2002) (Responsibility to Syncor International for payments made by Syncor Taiwan to doctors in hospitals owned by Taiwan`s judicial authorities in exchange for transfers of patients to medical imaging centres managed by the defendant). Two Chinese units of Massachusetts-based software company PTC Inc. reached a non-prosecution agreement and on Tuesday paid a $14.5 million fine to resolve a DOJ investigation into payments made by Chinese government agents for recreational travel in violation of the Foreign Corrupt Practices Act…. Continue to read the apparent lack of skills or resources.
Companies operating abroad should be wary when a partner or representative of a joint venture does not appear to be able to provide the services offered. Many enforcement measures are due to fictitious service contracts that conceal corrupt payments through a advisory agreement or other agreement. Similarly, organizations and individuals doing business in a foreign country should be particularly cautious about those who claim to obtain licences or other public authorizations without providing a description of how these objectives are being achieved legitimately. With respect to payments to foreign officials, the law distinguishes between corruption and facilitation or ”fat payments” that may be authorized by the FCPA, but which may nevertheless violate local laws. The main difference is that fat payments or reliefs are made to a public servant in order to expedite the completion of routine tasks that he or she is already required to perform.