In the world of Foreign Corrupt Practices Act (FCPA) prosecutions, 2021 has seen the Securities and Exchange Commission (SEC) keeping steady momentum. Their recent settlement with 3M Corp. for $6.5 million marks their seventh corporate resolution this year. Volume aside, the nature of these cases provides much-needed perspectives on operational best practices and potential pitfall areas for businesses and legal professionals alike.
The 3M case sheds light on the company’s dealings with Chinese healthcare officials employed by state-owned enterprises. Investigations highlighted a pattern of payments for these officials to attend oversea conferences, educational events, and healthcare facility visits, widely termed as ‘educational events’. These payments and the subsequent foreign business transactions bring the FCPA into play, leading to the penalties that 3M now face.
Interestingly, while SEC’s enforcement has been robust and consistent, this can’t be said for their Department of Justice (DOJ) counterparts. The DOJ has been relatively quiet this year, with its first resolution only recently – the case against Corficolombiana. This may point to varying priorities or prosecution strategies between the two state bodies when it comes to handling FCPA cases.
For in-depth analysis and coverage of the case, the PodBeans episode ‘Episode 292 — 3M’s $6.5 Million FCPA Settlement with the SEC’ by The Volkov Law Group delves deeper into the topic. The audio episode can be found here.
It is essential for corporations and law firms to stay informed and proactive in understanding and implementing regulations like the FCPA. Knowledge of such instances can not only guide legal advice but also foster rapidly responsive and robust compliance mechanisms. For, as this recent 3M case illustrates, the cost of non-compliance can run much deeper than monetary losses.