b'Geographies and Industries Cardinal Health, where the SEC alleged that the parent The FCPA enforcement continues to be relativelyviolated the FCPAs internal accounting controls and diverse. Business activity in China and South Americarecordkeeping provisions in relation to the marketing has been a consistent source of FCPA enforcementpayments of its subsidiary, Cardinal China, and inactions, and 2020 was no different, with three of theEni S.p.A., where the SEC alleged the Rome, Italy-21 total enforcement actions involving alleged acts ofbased global oil and gas company violated the FCPAs bribery in China and enforcement actions involvinginternal accounting controls and recordkeeping provi-alleged acts of bribery in South America. sions because of a subsidiarys actions in Algeria. Self-Disclosure and Cooperation For years, the SEC and DOJ have encouraged compa-Business activity in China and Southnies to self-report purported FCPA violations and have America has been a consistent sourcedangled the incentive of cooperation credit. In 2020, the SEC and DOJ jointly released A Resource Guide to of FCPA enforcement actions, and 2020the U.S. Foreign Corrupt Practices Act Second Edition was no different, with three of the 21 total(a follow up to the guide first published in 2012) and it states: both DOJ and SEC place a high premium on enforcement actions involving allegedself-reporting, along with cooperation and remedial acts of bribery in China and enforcementefforts, in determining the appropriate resolution of FCPA matters. And yet, whether companies actually actions involving alleged acts of bribery inare being given substantial credit is often obscured. South America. The public record is incomplete as to when an enforce-ment action is brought after a self-report (and substan-tial credit given) or whether the investigation results from a whistleblower or other tip. The regulators are The 2020 FCPA enforcement actions also arose frominconsistent in their discussion of the issue. And, of a diverse set of industries. Consistent with prior years,course, unless a public company has disclosed that it is the extraction industries gave rise to a number of largeunder investigation and then reports that no action was cases; and as highlighted in public statements made bytaken, it is nearly impossible to know when a company U.S. regulators in recent years, the healthcare and lifeself-reports, cooperates and receives a pass by sciences industries continue to pique intense interestregulators. Anecdotally we know it happens; but a more among regulators.fulsome and transparent record would prove useful for companies who have to make the very challenging DOJs Use of FCPA-related Charges calculus of whether, or not, to self-report.The DOJ also continues to bring a significant number ofDeclining Use of Government-Imposed MonitorsFCPA-related charges, including money laundering,2020 also reflected the continuing decline in the use mail and wire fraud, Travel Act violations, tax violations,of government-imposed monitors in connection with and false statements, in addition to, or sometimesthe settlement of FCPA enforcement actions. Corporate instead of, FCPA charges. Consistent with this, as seencompliance monitors are a tool that the government in enforcement actions in 2020, the DOJ now seeks to pursue both the briber and the recipient of bribes, frequently using money laundering theories to charge foreign officials who are not themselves subject to theThe DOJ even pointed out in its deferred FCPA.prosecution agreement that, due to SECs Use of FCPA Accounting Provisions Herbalifes extensive remedial measures Although overall SEC enforcement actions were downprior to resolution, in conjunction with dramatically in 2020, the SEC showed it will continue to employ aggressive and expansive theories of liabilityan agreement by the company to report under the FCPAs accounting provisions. The SEC hasdirectly to the DOJ on further remediation taken the position that issuers books and records also encompass those of their consolidated subsidiaries.efforts, that an independent compliance Thus, in practice, the SEC applies strict liability formonitor was unnecessary.accounting violations by a corporate parent, even if a parents books and records are unknowingly inaccu-rate because of its subsidiaries inaccurate books and records. We saw examples of this approach in 2020 in 8'