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Understanding Anti-Corruption Risk of Global Market Entry Understanding Anti-Corruption Risk of Global Market Entry

Understanding Anti-Corruption Risk of Global Market Entry - PowerPoint Presentation

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Understanding Anti-Corruption Risk of Global Market Entry - PPT Presentation

Alan Gourley Morris DeFeo Dalal Hasan April 1415 2014 2014 Crowell amp Moring LLP Overview Introduction Foreign Corrupt Practices Act Elements amp Compliance Application To Situational Scenarios ID: 249888

aak alan qatar private alan aak private qatar beaumontreply ahmed 2015 consulting contract keiber october 23rd local shouban moi

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Slide1

Understanding Anti-Corruption Risk of Global Market Entry

Alan Gourley

Morris DeFeoDalal HasanApril 14-15, 2014

© 2014 Crowell & Moring LLPSlide2

OverviewIntroductionForeign Corrupt Practices ActElements & ComplianceApplication To Situational ScenariosHypothetical Case Study – obtaining and performing an international contract2Slide3

Where is Bribery Legal? Nowhere!3Countries Where Local Laws Prohibit Bribery of Government OfficialsSlide4

Enforcement & PenaltiesJailFinesCollateral Consequences4Slide5

Elements of an FCPA Bribery OffenseUse of instrument of interstate commerceCorruptly to offer or pay“Anything of value”To a “foreign government official”

Either directly, or indirectly with knowledge

To influence or secure an improper advantage through an act or omissionTo obtain or retain business.5Slide6

Who is covered by the FCPA?6

Issuers, US Companies, Foreign Companies & Agents

Employees

Directors

Agents

Officers

StockholdersSlide7

Who is a “foreign official?”7

Foreign Governments Employees

International Organizations

Agencies and Officials

Universities

Hospitals

State-Owned EnterprisesSlide8

“Anything of value”8Slide9

Borrowed from the U.S. domestic bribery statute:Evil motive/Wrongful intent – quid pro quoDoes not require proof that defendant knew she was violating the FCPA“Corruptly”9Slide10

To Obtain or Retain BusinessNeed not be to obtain a contractAny favorable government action or omissionRegistration of productsFavorable customs treatmentInspectionsProsecution need only show a nexus between the action or omission and a business advantage

10Slide11

Some Exceptions“Facilitation” PaymentsRoutine government action – No DiscretionStill RiskyLegal under local lawReasonable and bona fide expenses related to promotional activities11Slide12

Direct or Indirect Offers of Payments12Corporations can be liable for the acts of others who perform services on their behalfforeign subsidiariesconsultants, employees

Freight Forwarders

DistributorsAgentsSlide13

May not “self-blind”Cannot ignore misconduct or consciously avoid examining red flagsFacts that would lead a reasonable person to inquire furtherKnowledge of Intermediary Payments13Slide14

Due Diligence Types14Slide15

Risk Assessment – Regional Risk15

2013 TI CPI - Scale: 0 (highly corrupt) to 100 (very clean)Slide16

Risk Assessment – Relationship Risk16Commercial End-UserIndependent Contractor

Government Contracting “Consultant”

Freight Forwarder

Due Diligence

Risk

Company

Registry

FCPA

Declaration

Due Diligence

Interview/Site

Visit

Reference

Checks

Questionnaire

Subcontractor

JV Partner

DistributorSlide17

Case Study: 2022 Qatar World CupVa Hi-Tech is keen to sell its Pan Tilt Zoom (PTZ) IP cameras to Qatar for new stadiums being built for 2022 World CupNo prior experience in selling into MENA regionCase Study follows Va Hi-Tech from approaching the market through award & performance17Slide18

Approaching the MarketAbdulrahman Al Keiber October 23rd, 2015 1:14amTo: Alan BeaumontReply-To: AAK@qatar.moi.govRe: Interesting opportunity – Qatar World Cup 2022

Friend Alan, Here is the RFP from the Qatar Ministry of State for Interior Affairs we discussed yesterday. but it will be soon and there will not be a lot of time to bid.

They want (100) Pan Tilt Zoom (PTZ) IP cameras, including software and hardware, and a 3 year support contract with 2 optional years. This only for the first stadium – there will be more to follow.You will need a Qatari partner to be eligible to bid on this award. that can set you up with the right partner very quickly. What do you think? Abdulrahman

<

AAK@qatar.moi.gov>

It has not been made public yet,

I know a local consultantSlide19

Approaching the MarketAhmed <AAK@private -consultant.com> October 23rd, 2015 8:22amTo: Alan BeaumontReply-To: AAK@private –consultant.com

Re: Re: Re: Interesting opportunity – Qatar World Cup 2022

Alan, Abdulrahman tells me you are in need of a local partner for the MOI security camera bid. I know . Their BOD has and they can help with offset obligation as well.Time is short, so you will need to move fast. I can begin working on this as soon as you give the green light, but I will need my commission fee ($50,000) to be . I have a that you can wire the funds to. Ahmed You

replied October 23rd, 7:49am

Sent from

idesk

Thanks

Abdulrahman

. We have never formed a local partnership for these bids, so it would be great to get Ahmed’s. advice. Please put us in touch. Alan.

Abdulrahman

Al

Keiber

<

AAK@qatar.moi.gov>

October

23

rd

, 2015 1:14am

To: Alan Beaumont

Reply-To:

AAK@qatar.moi.gov

Al

Keiber

the perfect company – Al

Shouban

all the right

connections,

paid in advance

bank account set up in the

U.A.E

. Slide20

Getting the ContractAhmed Al Keiber <AAK@private-consulting.com> October 23rd, 2015 8:59amTo: Alan BeaumontReply-To: AAK@private -consulting.com

Re: Re: Re: Re: Interesting opportunity – Qatar World Cup 2022

Alan, I think your standard technical proposal will be fine. l know from experience that MOI procurement officials will also want to for a product demonstration as well. A two-day tour for the 5-member committee and should do it. It is important we show them how much Va Hi-Tech cares. A trip to would impress them.Ahmed You replied October 23rd, 8:37am

Sent from

idesk

Ok. What are the next steps? Best, Alan

Ahmed Al

Keiber

<

AAK@private-consulting.com

>

October

23

rd

, 2015

8:22am

To: Alan Beaumont

Reply-To:

AAK@private-consulting.com

visit your Virginia facilities

their wives

Atlantic CitySlide21

Getting the ContractAhmed Al Keiber <AAK@private-consulting.com> November 15th, 2015 7:35amTo: Alan BeaumontReply-To: AAK@private -consulting.com

Subject: JV Agreement with Al-Shouban

Attachment: JV AgreementAlan, We are all set on the proposal, and the Qataris loved their visit to the U.S. We just need to finalize the JV agreement with Al-Shouban. Attached is your draft JV Agreement with Al-Shouban’s revisions. They agree with most of the terms, but with any U.S. anti-corruption laws. Let’s not insult them by insisting on U.S. law. There are local laws that deal with this issue. We are very close to a deal, and the bid is due very soon. Remember, Al-Shouban has and can ease satisfaction of the offset. Please let me know today if Va Hi-Tech is willing to sign the agreement. Otherwise, Al-Shouban

may choose to work with another partner.

Ahmed

w

ill not agree to comply

c

lose ties with the right procurement officials Slide22

Performing the ContractAhmed Al Keiber <AAK@private-consulting.com> November 30th, 2015 8:59amTo: Alan BeaumontReply-To: AAK@private -consulting.com

Re: Re: Congratulations on the contract award!Alan, Yes, unfortunately the processing time for the forms and product inspections is very slow. Not to worry – I can recommend a freight forwarder that deals with shipment and customs. They have a reputation for knowing how to get things done in the .

You replied November 30th , 2015 8:37amSent from ideskThanks, Ahmed. We need to get a freight forwarder lined up quickly for the camera parts, cabling, and mounting brackets. I understand the customs process in Qatar is very complicated. Can you help? Best, Alan

Ahmed Al

Keiber

<

AAK@private-consulting.com

>

November 30

th

,

2015

8:22am

To: Alan Beaumont

Reply-To:

AAK@private-consulting.com

Re: Congratulations on the contract award!

usual Qatari waySlide23

Performing the ContractJason Smith <JSmith@virginia-defense-co.com> January 27th, 2015 10:22amTo: Alan BeaumontReply-To: Jsmith@virginia-defense-co.comRe: Freight forwarder invoicesAlan, We received the final invoices from the Qatari freight

forwarder. Accounting has cleared most of them, but there are a number of invoices for that I have held because there is . I emailed the

FF to request explanation and support, but was told that these are typical local for which . The FF threatened to stop performance if we don’t pay. What should I do?JasonSr. Accountant, Va Hi-Tech Co. Jsmith@virginiahitech.com703-222-2222

“special handling,” or “special intervention”

no back-up documentation

“expediting fees”

receipts are not customarySlide24

As the Relationship DevelopsYousef Al Jakili <YAJ@al-shouban.com> November 30th, 2018 10:59amTo: Alan BeaumontReply-To: YAJ@al-shouban.comSubject: Follow-On RFP

Alan, The MOI is getting ready to release the follow-on IP Camera RFP for additional stadiums. With 12 stadiums needed, this RFP could to be many times the size of the original award. We will to win the favor of procurement officials. I hear that from the committee soon. He would be an excellent addition to the JV for continuing our success.

Trust me, if you want to win.Youself Al JakiliManaging DirectorAl-Shouban Inc.

n

eed to show progress on our offset commitments

Abdulrahman

is getting ready to retire

this is how the game is played here Slide25

Conclusion25Slide26

Contact UsMorris DeFeomdefeo@crowell.com 202.624.2925Alan Gourleyagourley@crowell.com 202.624.2561Dalal Hasan

dhasan@crowell.com 202. 624.2994

26