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Ericsson’s Pervasive Bribery Conduct: The Toxic Mix of Senior Executive Involvement and Third Party Corruption (Part II of II)

Corruption, Crime & Compliance Blog -

Ericsson’s FCPA settlement is in the books (not the books and records).  But it casts a significant shadow across the FCPA landscape.  A pervasive and systemic culture of bribery is defined to reflect senior executive involvement, winning business at any cost and using bribery as an accepted business strategy. 

Ericsson will now pay more than just the price of a $1 billion settlement; it will undergo significant change under a corporate monitor and will suffer serious reputational harms as it continues to operate.

Ericsson’s bribery conduct appears to have involved more than the five countries that are included in the factual statement.  Even reviewing the five countries, however, reveals a serious underbelly of corruption and bribery.

The bribery conduct occurred over a 17 year period, beginning in 2000 and continuing to at least 2016.  Ericsson used third-party agents and consultants to make bribery payments to government officials, and managed off-the-books slush funds for bribery funding.  The agents were often engaged by using sham contracts, paid pursuant to false invoices and avoided any meaningful due diligence or monitoring.  The countries involved included Djibouti, China, Vietnam, Indonesia and Kuwait.

In Djibouti, a country located in the Horn of Africa which is bordered by the disputed territory of Somaliland, Ethiopia, and Eritrea, Ericsson paid approximately $2.1 million in bribes to high-ranking government officials to obtain a contract with the state-owned telecommunications company to modernize the telecommunications system.  The contract was worth 20 million euros.  Ericsson retained a consulting company and conducted a due diligence report that deliberately ignored a spousal relationship between one of the high-ranking government officials and the consulting company.  To pay the bribes, Ericsson entered into a sham contract with a consulting company and approved fake invoices to conceal the bribe payments.

In China, between 2000 and 2016, Ericsson paid tens of millions of dollars to various third parties, which was used to fund a travel account to pay for gifts, and travel and entertainment for government officials from state-owned telecommunications companies.  Ericsson specifically used the travel expense account to entertain and win business from officials from state-owned telecommunications companies.  Ericsson also made payments totaling $31.5 million to third party service providers pursuant to sham contracts for services that were never performed in order to maintain third parties under Ericsson’s controls.  Foreign officials from state-owned telecommunications companies submitted false invoices through sales agents and consultants that were used to fund various bribery payments.

Ericsson used the travel account to entertain foreign officials and family members in the United States, luxury cruises in the Caribbean (only 2 hours of the 16-day trip were reserved for business meetings), London, and other locations.  Ericsson used fake invoices and payments made to sales agents for purposes of paying for entertainment and travel. 

In Vietnam, between 2012 to 2015, Ericsson paid $4.8 million in payments to a consulting company to create off-the-books slush funds in order to pay third parties who would not be able to pass Ericsson’s due diligence processes.  The slush funds were used to pay third parties who would not be able to satisfy Ericsson’s third party due diligence process.  Similarly, in Indonesia between 2012 to 2015, Ericsson paid approximately $45 million to a consulting company to create an off-the-books slush funds.  The payments were improperly booked and recorded. 

In Kuwait, between 2011 and 2013, Ericsson agreed to pay $450,000 to a consulting company at the request of a sales agent.  The sales agent provided inside information about a tender for a project with Kuwait’s state-owned telecommunications company’s radio access network. Ericsson made a bribery payment of $450,000 for award of the $182 million contract.

The post Ericsson’s Pervasive Bribery Conduct: The Toxic Mix of Senior Executive Involvement and Third Party Corruption (Part II of II) appeared first on Corruption, Crime & Compliance.

Hear from the Inspector General at the Department of Justice [Podcast]

The Compliance & Ethics Blog -

By Adam Turteltaub Michael Horowitz, the Inspector General at the US Department of Justice, has long been involved in the compliance community and even served as a member of the advisory board of the Society of Corporate Compliance & Ethics. As Washington and the world review the latest report from his office, we are […]

What Asia’s family firms can teach western business about purpose

Ethical Corporation Feeds -

“Nothing has ever belonged to me. I believe the key for continuity and long-term prosperity is to maintain inherited assets as if they are not my own properties. They are under my management and governance. Thus, understanding this mission, we have to work hard to grow the value and assets, in both quantitative and qualitative terms.”

Image: Channels: Business StrategyTags: Hoshi RyokanTemasekStewardship Asia CentreAyala CorporationBanyan TreeTataPatgoniaUnilever

DOJ Updates FCPA Corporate Enforcement Policy Again

Corporate Compliance Insights -

The DOJ recently announced updates to its FCPA Corporate Enforcement Policy. Michael Volkov shares how, while the changes were relatively minor, the modifications underscored important principles surrounding the FCPA Corporate Enforcement Policy. There is no question that the DOJ has landed on a Corporate Enforcement Policy that took years to develop. The FCPA Corporate Enforcement Policy […] The post DOJ Updates FCPA Corporate Enforcement Policy Again appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Billion Dollar Baby: Ericsson FCPA Enforcement Action – Part 2: The Bribery Schemes

FCPA Compliance & Ethics -

Last week the Justice Department (DOJ) announced a resolution of the long stand Foreign Corrupt Practices Act (FCPA) enforcement action involving Telefonaktiebolaget LM Ericsson (Ericsson), a multinational networking and telecommunications equipment and services company headquartered in Sweden. The matter was stunning in the total amount of fines and penalties assessed, coming in at over $1 [...]

The post Billion Dollar Baby: Ericsson FCPA Enforcement Action – Part 2: The Bribery Schemes appeared first on Compliance Report.

Ericsson Pays $1 Billion for Systemic FCPA Violations (Part I of II)

Corruption, Crime & Compliance Blog -

The Sweden-based telecommunications company, Ericsson, agreed to a pay a total of $1 billion (yes, billion with a “B”) for FCPA violations. 

Ericsson entered into settlement agreements with DOJ and the SEC.  Ericsson agreed to pay a criminal penalty of over $520 million and approximately $540 million to the SEC.  An Ericsson subsidiary in Egypt entered a guilty plea to an FCPA conspiracy to violate the anti-bribery, books and records, and internal controls provisions.  The parent company entered into a three-year deferred prosecution agreement (DPA), which included the requirement to retain an independent monitor.

Ericsson’s bribery conduct was pervasive and systemic.  As outlined in the plea papers, over a 17 year period, Ericsson engaged in bribery through payments of cash, gifts and other items of value involving at least five countries, Djibouti, China, Vietnam, Indonesia and Kuwait.

Under the FCPA Corporate Enforcement Policy, DOJ determined that Ericsson did not voluntarily disclose the issue, the nature and scope of violations was serious and included illegal conduct committed by senior executives and occurred in five countries over a 17 year period. 

Ericsson received only partial credit for its cooperation and remediation because it failed to disclose two significant matters; produced certain materials in an untimely manner; and failed to take appropriate disciplinary actions with regard to certain executives and employees involved in the conduct. 

As noted by DOJ, Ericsson’s compliance program was inadequate at the time the violations occurred, and Ericsson is currently implementing enhanced controls to improve its compliance program.

Based on all of these factors, DOJ awarded Ericsson only a 15 percent reduction from the bottom of the applicable United States Sentencing Guidelines.  Further, because Ericsson failed to implement all of the planned compliance enhancements and did not test its new compliance improvements, DOJ imposed an independent compliance monitor for three years.

As part of the DPA, Ericsson agreed to cooperate with ongoing DOJ investigations.  It is not known whether or not DOJ will prosecute any individuals involved in the bribery conduct.  Given the length of time involved, any individual prosecutions may be difficult because of potential statute of limitations issues.  FCPA prosecutions are subject to a five-year statute of limitations.

Under the DPA, Ericsson’s CEO and CFO are required to certify to the DOJ that Ericsson has met specified disclosure obligations, including a specific requirement that Ericsson disclose any potential violation that occurs during the three-year period.  Each certification is defined as a “material statement” for purposes of the criminal code’s false statement offense 18 U.S.C. §§ 1001.

The post Ericsson Pays $1 Billion for Systemic FCPA Violations (Part I of II) appeared first on Corruption, Crime & Compliance.

Why Are Protests Erupting Across South America?

BRINK News -

Anti-government protests have roiled the globe in 2019, from Hong Kong and Indonesia to Lebanon and Iraq. But the mobilizations in South America took many by surprise. Over the past three months, virtually every Andean nation — Venezuela, Ecuador, Peru, Bolivia, Chile and Colombia — has erupted into mass protest.  

The protests have some common threads. But their different sparks also make for unique explanations and outcomes. After teasing out some common themes in the protests, here’s what’s useful to know about what is happening and why (arranged by countries from south to north).

United in Frustration

The clear common denominator in all protests stems from economic woes. According to the International Monetary Fund, Latin America and the Caribbean economies will grow an anemic 0.2% this year — the worst performance of any major region in the world. Compare that to the growth of emerging markets, slated to rise globally by 3.9% in 2019. 

The region’s slowdown is clashing with rising expectations. The economic reforms undertaken by many countries in the early part of this century coincided with a commodities boom that lifted 10 million Latin Americans every year into the middle class from 2002 to 2012. As a result, the percentage of Latin Americans living in poverty shrank from 45% to 25% in that same period.

But rising middle-class status brings middle-class expectations — people don’t only want more schools or wider access to health care, but better schools and shorter waits for doctors. The subsequent slowdown left citizens feeling like the rug was pulled out from under them — just as circumstances were improving. 

There is also a lack of confidence in the political system. Corruption scandals and inequality rates are harder than ever for Latin Americans to swallow. According to the Latin American Public Opinion Project at Vanderbilt University, only 57.7% of Latin Americans support democracy — the lowest level since the survey was started 15 years ago. More than 80% of citizens across the region believe at least half of their politicians are corrupt. 

Chileans Demand More

The protests in Chile, long considered the region’s economic and democratic model, were the most surprising. 

The Chilean economy will expand by close to 3% in 2019, even though the economy’s dependence on copper exports has proved painful amid trade wars and China’s slowing growth. Inflation is low, unemployment has been steady, and poverty rates have declined to less than 10% over the last three decades.

But while the economy performed brilliantly over the past decades, growth slowed in the past five years, and the cost of living skyrocketed. Socioeconomic immobility remains pervasive. Chileans demand better pensions, improved public services, quality education and wider access to health care. Protestors have called for redistribution and better public services.  

Facing a popular movement, the administration of Chile’s President Sebastián Piñera successfully negotiated with lawmakers a national accord to hold a referendum in April 2020 on whether to have a new constitution and what kind of body should write it. This is now seen as the key to the structural change that many young Chileans seek, and a vote for a new constitution seems unstoppable. Most Chileans support the idea; and all parties, except for some on the far left and the far right, have signed the accord. 

Most likely, Chile will maintain a competitive market economy with stronger elements of European-style welfare. So, if Chile’s new constitution can succeed both in defending capitalism and leveling the social playing field, the protests go into the history books as having contributed to advancing, not deterring, President Piñera’s promise to turn Chile into Latin America’s “first developed country” by 2025.

The past months’ protests are less about ideology than about the honest demands by citizens for better and more transparent governments. 

Bolivia Moves Beyond Former President Evo Morales

The issue in Bolivia was a highly contested national election result. 

Even after losing a referendum in 2016 to allow for a fourth presidential term, former President Evo Morales steamrolled ahead — packing the Constitutional Court that subsequently declared his right to be reelected a “human right.” Fast forward to the October 21 presidential elections this year: With about 80% of the ballots counted, Bolivia’s electoral tribunal mysteriously stopped counting ballots as it became evident that former President Morales would face a second round of elections. Days later, the counting resumed, miraculously showing former President Morales’ outright win. Organization of American States observers condemned the irregularities and demanded a new vote amid protests that led former President Morales to flee to Mexico. 

After a terrible start by the interim government of right-wing Senator minority leader Jeanine Áñez, Bolivia now seems back on track for a return to democratic rule. 

On November 24, Interim President Áñez signed into law a bill annulling the results of last month’s elections and calling for a new vote within 120 days. The legislation was even supported by Movement for Socialism (MAS), former President Morales’ political party. New officials will be chosen to head a reformed electoral authority — a key step for a more transparent electoral system in Bolivia. 

None of this means that MAS is going away. The party leadership seems ready to move beyond former President Morales, although there isn’t a clear successor. Nevertheless, a MAS-lite candidate who rejects unconstitutional behavior but supports former President Morales’ social policies could have a winning message. After all, the former president left office still a relatively popular figure with a significant political base. 

Ecuador’s President Buys Time

President Lenín Moreno seems to have dodged a political bullet in Ecuador. Following mass protests in October, an official peace deal was negotiated, and the government was successfully moved from Quito to Guayaquil. 

The price of staying in power, however, was restoration of fuel subsidies. The original scrapping of subsidies was part of the deficit-cutting pledges agreed upon in return for $10 billion from the IMF. Rather than increase taxes, President Moreno decided to cut fossil fuel subsidies, which cost $1.4 billion a year — albeit without a social safety net for the poor. 

President Moreno benefits from having organized opposition groups with whom to negotiate, including the indigenous group CONAIE. But his government now faces the task of passing tax reforms through the National Assembly. If they fail or prove unpopular, Ecuador could face longer-term challenges to economic growth or a return to populism in 2021. 

Colombia at a Crossroads

Colombia is the latest Latin American nation to join the wave of anti-government mobilizations, with a 250,000-person march and a nationwide strike on November 22nd. 

While Colombia has been a model of growth over the past decades, the protests were hardly surprising: President Iván Duque Márquez’s administration has been plagued by problems during his 16 months in office, resulting in low approval ratings and unsuccessful legislative efforts.

Demonstrators in Colombia are rallying against an array of issues: from plans to raise the pension age and cut minimum wage for young people (which President Duque Márquez denies supporting), anger over corruption scandals, to a spike in the murder of human rights activists. The parts of the peace deal with the FARC (The Revolutionary Armed Forces of Colombia — People’s Army) that President Duque Márquez wanted to overturn have proved constitutionally untouchable — while the accord’s social investments have been stalled. 

As a reaction to the protests, President Duque Márquez followed the playbook of French President Emmanuel Macron’s response to France’s “yellow jacket” protests of last winter: He pledged to begin a complicated and multifaceted national dialogue. Not an easy task — his political party was trounced in the October 2019 local elections. With two and a half years before presidential elections, that leaves a long stretch of time for either talk or more strife. 


Democracy isn’t in danger in Latin America — yet. At the end of the day, it looks like the only president to not finish the term as a result of the protests will be in Bolivia. The past months’ protests, while sometimes exploited by extremists, are less about ideology than about the honest demands by citizens for better and more transparent governments that address pocketbook issues. 

Such goals will require a new and deep reform agenda across the Americas. Pensions, health care, education, security and infrastructure will all be in play. Unless some progress is made on these demands, the legitimacy of democratic governments will become increasingly fragile in a region where citizens are already questioning the ability of democracy to improve their lives.  

Total Retail Loss 2.0: Moving Beyond the Theory

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12 Kinds of Shopping Tech That Didn’t Exist 10 Years Ago but Have Changed Retail as We Know It

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Advances in technology have drastically changed the way consumers shop, both in-store and online. The last decade ushered in the rise of the direct-to-consumer brand and companies built nearly entirely on social media. Offline, stores began experimenting with new forms of tech to lure shoppers back into brick-and-mortar spaces as foot traffic declined and locations […]

We All Pay the Price for Fraudulent Returns

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Key Takeaways from the CFIUS Annual Report to Congress Covering Calendar Years 2016 and 2017

Program on Compliance and Enforcement, New York University School of Law -

by Peter Thomas, Abram Ellis, George Wang, and Mick Tuesley


On November 22, 2019, the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) released its Annual Report to Congress, which includes trends and data on the number and types of transactions reported to the Committee during the 2016 and 2017 calendar years, the most recent years for which this data has been made available. CFIUS is an inter-agency committee with the statutory mandate to review certain foreign investment into the United States for national security concerns. The data and trends included in the Report provide key insights into the Committee’s review process. While the passage of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) has made significant changes to CFIUS’s jurisdiction and the CFIUS review process since the period covered by the report, the Committee’s report still offers important insights and trends regarding the countries and industry sectors involved in transactions notified to CFIUS.

Continued Upward Trend in the Number of Notices Submitted to CFIUS

One clear trend from the data in CFIUS’s report (the “Report”) that is likely to accelerate with the implementation of FIRRMA is the increasing case load for CFIUS. The Committee reported 172 notices filed in 2016, which was a 20 percent increase over the 143 notices filed in 2015. The 237 notices filed in 2017 represented another 38 percent increase over the number filed in 2016. The number of notices filed in 2017 was the highest number reported since CFIUS began publishing annual reports in 2007. Every indication is that the number of notices and declarations submitted to CFIUS increased in 2018 and will significantly increase as a result of FIRRMA and the implementation of a mandatory filing requirement for certain transactions.

FIRRMA expanded the definition of “covered transaction” within the Committee’s jurisdiction to include non-controlling “other investments” in U.S. businesses involving critical technologies, critical infrastructure, or sensitive personal data on U.S. citizens. Additionally, FIRRMA brought transactions involving real estate (but no U.S. business) in close physical proximity to sensitive U.S. government or military facilities and other locations within CFIUS’s jurisdiction. CFIUS also implemented a Pilot Program in November 2018 to review both controlling and non-controlling investments by foreign persons in U.S. businesses involving critical technologies in 27 specified industries. Prior to the implementation of the Pilot Program, CFIUS filings were submitted pursuant to a voluntary filing regime. Transactions falling within the scope of the Pilot Program, however, must now be notified to the Committee either through a mandatory declaration or a formal notice. A declaration is an abbreviated version of a full formal notice, but CFIUS may request that parties submit a full notice if it cannot complete its review based on the limited information submitted in a declaration. It is expected that at least 235 notices and 110 declarations will be submitted by the end of 2019. The final FIRRMA regulations are still being finalized by the Committee, but promulgation of the final rules in February 2020 will undoubtedly further increase the case load of the Committee.

Significant Increase in the Percentage of Cases Going to Investigation in 2017 Compared to Historical Levels

According to the Report, the total number of notices that were moved to the investigation stage increased in both 2016 and 2017. Prior to the implementation of FIRRMA, CFIUS was statutorily required to complete its initial review period within 30-days of the acceptance of the formal notice by the Committee. If the Committee was unable to rule out national security concerns and complete its review in this initial 30-day period, the notice would be moved to an additional 45-day investigation stage. The percentage increase in the number of such investigations remained flat between 2015 and 2016, holding steady at approximately 46 percent of the number of notices filed each year. That percentage increased dramatically in 2017, to almost 73 percent of notices being moved to the investigation stage. While the report does not explicitly explain this significant increase in the percentage of investigations, part of the impetus was likely the result of resource constraints arising from the sheer number of notices filed in 2017, a 38 percent increase over the number filed in 2016 and a 66 percent increase over the number filed in 2015. More notices were submitted to CFIUS in 2016 and 2017 than any other year since CFIUS started publishing annual reports in 2007. That said, the primary reason for the jump in investigations in 2017 was the geo-political environment in which cross-border transactions by investors from countries of special concern—China and Russia—received unprecedented scrutiny from the Committee. Based on publicly available data, a substantial majority of proposed acquisitions or investments by Chinese parties were effectively blocked and abandoned during 2017. Concern about transfer of advanced technologies to China was a major driver of the FIRRMA legislation enacted in 2018.

While helpful in understanding the CFIUS review process, the data on the number of notices going to investigation is dated for several reasons. As explained, FIRRMA expanded the Committee’s jurisdiction and created mandatory filing requirements for certain transactions, which likely will result in more notices and mandatory declarations being submitted. However, FIRRMA also increased the initial review period from 30-days to 45-days, which gives the Committee’s staff additional time to conclude their assessment within the initial review period. FIRRMA also allocated additional personnel and financial resources to the Committee to increase the size of its staff, which may alleviate some of the constraints that previously plagued the Committee. Beginning in early 2020, filing fees equal to the lesser of $300,000 or one percent of the value of the proposed transaction will be implemented.

Despite the increased volume for the Committee’s staff, our experience is that there has been a significant decrease in the number of notices being moved to the investigation stage. Based on our information, we believe more than 50 percent of reported transactions are clearing in the initial review period, which is certainly a welcome development for users of the CFIUS process. We attribute this primality to the additional 15-days included in the initial review period pursuant to FIRRMA and the additional staff and resources, which will be further expanded in the years to come.

Industry Sectors

The Manufacturing sector and the Finance, Information, and Services sector continued to be the subject of the largest number of transactions notified to the Committee in 2016 and 2017. The Manufacturing sector and the Finance, Information, and Services sector combined made up more than 80 percent of the notified transactions in 2017. The Manufacturing sector includes semiconductor manufacturing, which historically has been a key focus of the Committee. According to the Report, the number of covered transactions in the Finance, Information, and Services sector made significant increases in 2016 and 2017 over prior years, increasing from 42 in 2015 to 68 in 2016, and 108 in 2017. We attribute this increase in part due to the fact that the Committee has been increasingly focused on information technology and “big data” in recent years. We expect the number of reported transactions in this industry sector to continue to increase as more U.S. businesses are swept under FIRRMA’s expanded jurisdiction for businesses that maintain or collect sensitive personal data on U.S. citizens.

*Source: Committee on Foreign Investment in the United States: Annual Report to Congress for CY 2016 and CY 2017

Countries the Subject of Notices

According to the Report, transactions involving investors from China continued, at least in 2016 and 2017, to make up the largest proportion of notices submitted to CFIUS. Notices involving investors from Canada, China, and Japan made up almost half of all notices filed from 2015 to 2017. Transactions involving Chinese investors accounted for the most notices from 2015 to 2017, accounting for 29, 54, and 60, respectively. This accounts for more than 25 percent of all notices filed during this same time period. While the number of transactions involving Chinese investors steadily increased during this period, the number of transactions involving investors from close allies of the U.S. such as Canada, Australia and the U.K. have remained relatively consistent. Additionally, there were a total of 38 notices involving Chinese investors in critical technology companies from 2016 to 2017. This is more than double the number of notices involving critical technology from the next leading country (Japan at 18). From published reports, many of these Chinese transactions were effectively blocked by the Committee.

Whether this trend continues given CFIUS’s expanded jurisdiction and enhanced scrutiny of critical technology companies under FIRRMA remains to be seen. By all accounts, Chinese M&A transactions in the United States are down in 2018 and 2019 in response to the scrutiny being paid to such deals and the overall tensions in the United States-China bilateral relationship.

CFIUS is also expected to publish a list of excepted foreign states that will likely be limited to close U.S. allies such as Australia, Canada, and the U.K. Subject to certain limitations, investors from such excepted foreign states may be excepted from the scope of the new jurisdictional authorities relating to critical technology companies under FIRRMA. These and other changes to the CFIUS review process could have a significant effect on these trends once the final FIRRMA regulations are published in February 2020.

Blocked Transactions

The President has the broad statutory authority to issue an order blocking or unwinding a transaction if it poses unresolved national security concerns. Although this authority is broad, and final, it is rarely used. As a practical matter, parties typically abandon transactions where CFIUS indicates that it will make a recommendation to the president to block a transaction. While rare, blocking transactions has become an increasingly popular national security stick for presidents in recent years. The Report includes two such transactions that were blocked by the president, one in 2016 by then President Obama, and one in 2017 by President Trump. The latter also blocked another transaction in 2018. Notably, every transaction that has been blocked by a president involved national security concerns related to China.

  • On February 2, 1990, President Bush ordered the state-owned China National Aero-Technology Import & Export Corporation to divest Mamco Manufacturing Company, a Seattle-based company that manufactured aerospace parts;
  • On September 28, 2012, President Obama ordered Ralls Corporation, a U.S. company owned by Chinese nationals, to divest its interests in four wind farm projects in Oregon located near restricted airspace;
  • On December 2, 2016, President Obama blocked the sale of the U.S. assets of a German semiconductor manufacturer, Aixtron SE, to a Chinese investor, Fujian Grand Chip Investment Fund;
  • On September 13, 2017, President Trump blocked the sale of Lattice Semiconductor to Canyon Bridge Capital Partners, a private equity firm managed by U.S. nationals but backed by funds from several Chinese state-owned entities; and
  • On March 12, 2018, President Trump prohibited Broadcom, a semiconductor manufacturer co-headquartered in Singapore and the United States, from acquiring Qualcomm, a leading U.S. semiconductor and telecommunications equipment manufacturers. Although Broadcom is headquartered in Singapore, CFIUS expressed concerns that the transaction would hinder U.S. research and development in the telecommunications sector and ultimately benefit telecommunications companies based in China such as Huawei.

As with past annual reports, this data is helpful in recognizing certain investment trends and in shedding some light on CFIUS’s otherwise opaque and confidential review process. The increase in the number of notices submitted to the Committee is likely to continue for the foreseeable future given the changes expected to take effect pursuant to FIRRMA. Some of those same changes, particularly the extension of the initial review period to 45-days and the budgetary authority to hire more staff already appear to have reduced the number of notices being sent to the investigation stage as compared to the 2016 and 2017 data included in the Report. The increase in the number of notices in the Finance, Information, and Services sector will likely continue due both to an increase in the importance of information technology and “big data” for U.S. businesses as well as the increasing scrutiny of such technology by CFIUS and other regulatory stakeholders. The Report provides some helpful insights when considering the CFIUS risk posed by any particular transaction, but the significant changes currently in process pursuant to FIRRMA make pre-transaction CFIUS risk assessments both more challenging and more important than ever.

Peter Thomas, Abram Ellis, and George Wang are partners and Mick Tuesley is Senior Counsel at Simpson Thacher & Bartlett LLP.


The views, opinions and positions expressed within all posts are those of the author alone and do not represent those of the Program on Corporate Compliance and Enforcement (PCCE) or of New York University School of Law.  PCCE makes no representations as to the accuracy, completeness and validity of any statements made on this site and will not be liable for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with the author.

Hidden in the Losses: Unsaleable, Damaged Goods

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Is your inventory shrinking right before your eyes? You’re not alone. According to the National Retail Federation’s Security Survey of 63 retailers, conducted in the spring of 2018, the U.S. retail economy took a $46.8 billion hit in 2017, with individual retailers losing an average of 1.33 percent of their sales to inventory shrinkage from […]

Hughes Hubbard 2019 FCPA and Anti-Bribery Alert, Part 4: Developments from Multilateral Development Banks with Michael DeBernardis

FCPA Compliance & Ethics -

Welcome to a special five-part podcast series from the Compliance Podcast Network. In this series I am taking a look at the Hughes Hubbard & Reed 2019 FCPA and Anti-Bribery Alert. I visit with five firm lawyers involved in the preparation of the report, each of whom is a subject matter expert in an area [...]

The post Hughes Hubbard 2019 FCPA and Anti-Bribery Alert, Part 4: Developments from Multilateral Development Banks with Michael DeBernardis appeared first on Compliance Report.


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