Russian Business Investigations, FCPA Violations
Fascinating Russia. Even in the 21st Century, it is still a land of mystery – a country which defies stereotypes – with cultural feet solidly both in the East and the West, tied as much to history as to the present. Even today’s Russia shows many active links to its tsarist-then-Soviet social and political past. But despite this tangle, business in Russia can produce significant rewards.
Since the 1992 Federation, Russia has undergone an extraordinary transformation, attempting in a short time to build a competitive economy based on market capitalism – often with painful results. But Western interest runs high. Many see Russia (and other now-independent countries of the former USSR) as a land of huge business opportunities, ventures and partners.
Recently President Obama announced the National Export Initiative (NEI). Its goal: Double U.S. exports by 2014. Already, U.S. embassies are committed to supporting U.S. companies – to start exporting or grow their exports to Russia and to develop the lucrative overseas Russian market.. However, there are risks.
Insight into the Russian commercial environment reveals many things which could raise red flags for those seeking to do business in Russia. As said before, Russia has many interwoven ties to its multi-faceted past – and a darker side might include the still-common practice of bribery, the corruption of public or private officials, and the fraudulent misrepresentation of ownership, agreements, and stocks or bonds.
Legal requirements for maintaining a company in Russia are defined. Well-developed procedures and regulations in Russian law do exist. Areas such as registration of a new company, disclosure in connection with the acquisition or holding of securities, major and related-party transactions, 30% takeovers, dealing with the Ministry of the Russian Federation for Antimonopoly Policy (MAP) when a company takes a dominant position in the market or plans to acquire a substantial stake in or assets of another company, as well as other aspects of maintaining a company are codified under Russian law.
But problems arise when these procedures are unintentionally or deliberately ignored. And occasionally, when the issue is totally new to government agencies, no clear practices have been adopted. The “gray” area of Russian business is still huge.
So a word to the wise: Use intelligence when doing business with companies or individuals from Russia. Seek reputable advice when entering the Russian market for the first time. What may be common – even accepted – practice there may unwittingly violate FCPA regulations here.
The U.S. Foreign Corrupt Practices Act (FCPA) is an important anti-corruption tool designed to discourage corrupt business practice, in order to promote free and fair markets. It prohibits promising, offering, authorizing or giving anything of value to a foreign public or private official, where the purpose is to obtain or hold on to business.
These regulations apply to U.S. individuals and companies, and companies listed on U.S. exchanges. The FCPA statute also requires companies publicly traded in the U.S. to keep accurate books and records and implement appropriate internal controls. Through U.S. watchdog agencies – such as the SEC, the IRS, and the State Department – the FCPA is strictly enforced. In this black-and-white world, violations are identified, charges are leveled, and penalties are severe.
What’s not so cut and dry is who the victims are. Yes, those who lost money in an international business venture – the investors, the stockholders – are victims. Others exist as well. It is those who are charged with participating – often unknowingly – in an international crime scheme.
The Blanch Law Firm is well-experienced in Russian Business Investigations and in FCPA compliance and violations. Its team of international criminal defense lawyers has met the challenge many times in this confusing arena.
Our firm is dedicated to swiftly investigating the circumstances, assembling the facts – and fully supporting our client. We believe the government, through its agencies, only presents its part of the story. Its prosecution may involve circumstantial or misleading evidence, or even false accusations. We want to the whole story.
The Blanch Law Firm handles cases in the greater New York area, as well as in Los Angeles, Orange County, greater Southern California, Washington D.C. and Houston, TX.
If you are the focus of a Russian Business or FCPA criminal investigation – or if an investigation is pending – contact The Blanch Law Firm today by calling 212 736 3900. Initial consultations are complimentary and always confidential.