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Antitrust and Corruption

By Jacqueline C. Wolff, Lisl J. Dunlop and Shoshana S. Speiser

In March 2016, nine Brazilian executives received prison sentences from a Brazilian court ranging from 10 to 19 years for their roles in the $35 million Petrobras Scandal, a scheme among construction and engineering companies to submit fraudulent bids to, and bribe agents of, the state-owned oil company, Petroleo Brasileiro SA (Petrobras). Several former Petrobras directors and a manager were also sentenced, some to more than 20 years in prison. The companies' legal troubles did not end there. Currently, Brazil's antitrust authority, the Council for Economic Defense, is investigating 21 companies and 59 executives for antitrust violations in connection with the same Petrobras contracts. The antitrust case was unearthed while investigators were looking into corruption issues. In the U.S., Petrobras investors filed civil suits against the company. And in 2015, Brazilian prosecutors notified the U.S. Department of Justice (DOJ) of evidence that several of the companies' actions may implicate the Foreign Corrupt Practices Act (FCPA).

Meanwhile, in Romania, the authorities have started to focus on pharmaceutical companies for anti-competitive practices. The modus operandi? Paying for state-employed doctors' attendance at Congresses and for “participation” in allegedly questionable clinical trials, ostensibly to induce them to prescribe the company's drugs rather than similar drugs from other companies ' also potential FCPA violations. Catalin Lupasteanu and Livia Ispas, Doctors Who Supported Drugmakers Rewarded With Holidays in France, Canada, USA, MEDIAFAX.RO (July 28, 2015), http://bit.ly/247d13w. These cases are just two examples of antitrust and corruption intersecting within the same set of facts. A company may think it is facing exposure in an antitrust investigation, but ultimately may find itself charged with corruption. With increased agency scrutiny on a global scale, coupled with increased cooperation between prosecutors abroad and in the United States, companies should seize the opportunity now to reassess their antitrust and FCPA compliance policies and procedures.

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