Hogan Lovells Publications | ADG Insights | 06 April 2017

Top bribery and corruption developments in 2017 for ADG companies

In recent years, U.S. and Western European military spending has decreased as military spending in other parts of the world has risen. As a result, aerospace, defense and government services (ADG) companies increasingly rely on sales to foreign governments to grow business revenue and are thus at increased risk of investigation for violating the Foreign Corrupt Practices Act (FCPA). On 16 February 2017, newly-installed Deputy Assistant Attorney General Trevor N. McFadden noted that “[t]he fight against official corruption is a solemn duty of the Justice Department, each generation of Department leaders and line prosecutors takes up this mantle from their predecessors, regardless of party affiliation.” His remarks confirmed the Department of Justice’s (DOJ) continued commitment to enforcing the FCPA under the leadership of Attorney General Sessions and did not announce any significant changes in enforcement practices or priorities, although such changes may certainly be on the horizon. 

McFadden noted that the DOJ FCPA unit has added 10 prosecutors over the last 18 months and that the FBI has also established three new squads of special agents in New York, Washington, D.C., and Los Angeles devoted to FCPA investigations. These new resources coupled with the increase in U.S. enforcement action in 2016, compared to 2015, suggest that the robust FCPA enforcement will continue. The risk such enforcement actions present to ADG corporations is significant. Since 2008, at least 10 corporations have agreed to pay more than US$300m in penalties to resolve such investigations. 

Please click here for a discussion of the most significant issues likely to shape FCPA enforcement activity in the ADG industry in 2017.

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