Compliance » Lessons From Hitachi’s FCPA Charge

Lessons From Hitachi’s FCPA Charge

October 6, 2015

money doodle drawing

The recent settlement of Foreign Corrupt Practices Act case against Hitachi was notable on two counts, writes Thomas R. Fox. First, the alleged recipient of the bribe was not a government official, but South Africa’s African National Congress (ANC), or more precisely the subsidiary of an ANC front group. (This was not a case of currency delivered in a bag, but rather a profit-sharing arrangement, although it did also involve a $1 million “success fee.”) Second, the target was a foreign company. Hitachi is based in Japan, but the fact it had been listed on a U.S. stock exchange during the time of the alleged infraction made it fair game. This is a reminder to foreign companies, the author says, that they may be subjecting themselves to U.S. jurisdiction through such registrations. He also alludes to another and more complicated aspect of this case. Hitachi’s actions could be, and no doubt were by some, portrayed as a salutary post-apartheid gesture to involve black business partners in a lucrative development deal, in this case, the construction of two power plants. The SEC’s enforcement action points up the difficulty of “providing corporate social responsibility and distinguishing it from outright corruption in certain countries.”

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