Philip Urofsky,ana's on the beach antigua with Shearman & Sterling.

This could be an especially tough enforcement year under the Foreign Corrupt Practices Act for corporate gatekeepers, such as general counsel, chief compliance officers and chief financial officers, according to

Shearman & Sterling

partner Philip Urofsky.

In an interview Wednesday about his law firm’s just released

2019 FCPA Digest

, Urofsky said he expects law enforcement to focus their efforts not only on individuals in 2019, but on corporate gatekeepers in particular.

At the U.S. Securities and Exchange Commission, for example, Urofsky said, “Enforcement head counts are down. So the SEC has been quite open that they will focus their efforts on where they get the most bang for their buck—the gatekeepers, including general counsel, chief compliance officers and accountants.”

Urofsky

, formerly an assistant chief of DOJ’s fraud section overseeing FCPA probes, was editor-in-chief of this year’s FCPA Digest. It is a compendium of FCPA-related developments in 2018, including U.S. foreign bribery proceedings and criminal prosecutions, DOJ foreign bribery civil actions, SEC actions, DOJ opinion releases, 113 ongoing FCPA investigations listed by company, pre-FCPA prosecutions, and parallel litigation related to the FCPA.

One of the longest-running FCPA probes on the list, dating back to 2011, involves allegations of bribery by Walmart Inc. in Mexico. The probe of the world’s largest retailer expanded to include several other countries. Walmart reported in November 2017 that it had reached a

preliminary settlement

with the U.S. government and had accrued $283 million for it. Observers expected the final settlement announcement in early 2018, but it never came.

"I have no insight into the Walmart case,” Urofsky said, noting that much of the Mexico misconduct lies beyond the statute of limitations. “It’s been out there for an awful long time. Is it prosecutable? Can they close it?"

Walmart said Thursday, "We are continuing discussions with the government agencies as we work to reach a resolution.”

The attorney said general counsel have special responsibilities in FCPA investigations. “The executives he or she deals with are very much in the crosshairs,” Urofsky explained. “There can be a great deal of pressure to move it forward and get it off the books, so general counsel have this balancing act of advising in a manner that ensures that the company is well-served and that executives are not unfairly targeted."

One particular area of FCPA concern for general counsel is acquisitions, and making sure the company doesn’t unwittingly acquire another company’s FCPA headaches.

“There may be an acquisition group that has its heart set on an acquisition,” Urofsky noted. “You have to say, 'Wait—we know the business case, but we don’t know the compliance case yet.' That may not make you popular."

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Urofsky sees other FCPA developments in 2018 impacting what will happen in 2019. Among other things, he envisions:

• More FCPA cases. "First the government has to get back to work,” Urofsky said, noting the government shutdown, “Then we will probably see more cases in 2019 than in 2018. There are a lot stacked up in the cue. Prosecutors are not in favor of delays"

• An impact from some 2018 court decisions. "Up until now smaller cases have been dealt with through other mechanisms, such as deferring to the SEC, or declination with disgorgement. To the extent that the court cases conclude that the SEC cannot collect disgorgement while DOJ can, we may see perhaps more cases coming out of DOJ to fill the gap as they did in Polycom."

In late December Polycom Inc., a U.S. communications technology provider, reached a

settlement with the SEC

and received a

declination of prosecution from DOJ

that included $31 million in disgorgement, with a third of the money going to the SEC. Polycom was accused of using resellers and distributors in China to bribe government officials there.

• Growing concern over “weaponizing” the FCPA, after former U.S. Attorney General Jeff Sessions in November announced a DOJ

“China Initiative”

that specifically referenced bringing FCPA cases against Chinese companies.

Urofsky said, “Such cases may be justified, but it is odd to see it as part of a China initiative. And it is concerning, because if it is viewed as a tool of foreign policy, it becomes fair game for reciprocal actions by other countries. In countries where the rule of law is not firmly established, that approach really leads to opportunistic, politicized prosecution."

Read more:

DOJ Cites 'Full Cooperation' in Declining FCPA Case Against Plantronics

Walmart Says Global Ethics and Compliance Chief Jay Jorgensen Is Leaving

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