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As the books closed on FCPA enforcement for 2011, one final enforcement action came through the door: On December 29th, Magyar Telekom Plc. and Deutsche Telecom AG resolved an FCPA enforcement matter for a combined monetary sanction exceeding $95 million. The settlement offers important compliance benchmarks and should provide a useful starting point for anti-corruption counsel planning a risk assessment and/or compliance testing for 2012.
The Deutsche Telecom and Magyar Telekom Action
The two companies resolved the FCPA enforcement matter, which had been disclosed in 2009, in an arrangement involving an Information and a Deferred Prosecution Agreement filed against Magyar Telekom, a Non-Prosecution Agreement for Deutsche Telekom, and an SEC Complaint against both Deutsche Telecom and Magyar Telekom. The conduct in question involved payments through third parties to officials Macedonia and Montenegro.
At the same time the settled action was filed, the SEC charged three former Magyar Telekom executives with violations of the FCPA. None of the individuals is a US citizen. According to the Complaint, the basis for jurisdiction over these individuals rests on their prior status as officers, directors, employees or agents of Magyar Telekom, which was at the time an “issuer” with American Depository Receipts listed on the New York Stock Exchange, and the allegation that email messages in furtherance of the bribe scheme “were sent from locations outside the United States, but were routed through and/or stored on network servers located within the United States.”
Compliance Lessons: Anti-Corruption Program Elements Clearly Set Forth
The Magyar Telekom Deferred Prosecution Agreement contains a section articulating the minimum elements of a Corporate Compliance Program, a common feature of Deferred Prosecution Agreements. These elements describe the company’s compliance obligations in detail and are tailored to corruption-specific risks.
For compliance counsel, the elements described in the Corporate Compliance Program section (transcribed here in table/checklist format) may provide a very helpful tool for planning a program review. Counsel looking for a source to determine whether the elements of a company’s compliance program are up-to-date with the DOJ’s latest settlement can use the linked list as a starting point for a review, which can then be tailored to the specifics of geographical, business model and other risk factors.
- Jedd R. Bellman to discuss “The CFPB’s crackdown on collection junk fees and the growing anti-CFPB rhetoric” at an Accounts Recovery webinar
- Benjamin W. Hutten to discuss “Latest on AML regulations and impact of economic sanctions” at a Mortgage Bankers Association webinar
- Benjamin W. Hutten to discuss “Fundamentals of financial crime compliance” at the Practicing Law Institute
- Benjamin W. Hutten to discuss “Ongoing CDD: Operational considerations” at NAFCU’s Regulatory Compliance & BSA Seminar