USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
• corporations may be held criminally liable, including for violations of the FCPA or domes - tic bribery statutes; • individuals and corporations may be held liable for the same offence; and • successor entities may be held liable for offences by the target entity prior to the merger or acquisition. Corporate Liability Under the doctrine of respondeat superior, a cor - poration may be held criminally liable for the acts of its employees, agents, officers, etc, provided that: • those acts were undertaken within the scope of their employment (even if such actions were against corporate policy); and • they were intended, at least in part, to benefit the corporation. Corporate prosecutions are more common for FCPA violations than domestic bribery, but both are possible. High-level directors, officers, etc, need not be involved for corporate criminal liability to apply. Any employee or third-party contractor can incur liability on behalf of a corporation. Finally, a subsidiary’s criminal conduct may be imputed to its parent corporation, if the subsidi - ary is the parent’s agent. To make this deter - mination, US authorities evaluate whether the parent controls the subsidiary, including through knowing about and/or directing the subsidiary’s actions. Parallel Individual and Corporate Liability While no individual need be convicted in order for a company to face liability, DOJ policy empha - sises individual accountability. Authorities often
look favourably on co-operating companies that identify key individuals involved in misconduct, and may consider such efforts when assessing a company’s co-operation (and any related reduc - tion in penalties). Successor Liability When one company merges with or acquires another, the successor generally assumes the predecessor’s liabilities under US law, includ - ing criminal liabilities. Prosecutors and regula - tors, however, sometimes decline to act against companies that conducted comprehensive pre-acquisition due diligence and voluntarily disclosed and remediated any potentially prob - lematic conduct identified during the diligence. The DOJ has held successor companies liable for the acts of predecessor companies follow - ing mergers and acquisitions when the miscon - duct continued after the transaction. Authorities may still take action against the predecessor (if they would have had jurisdiction over it), but the FCPA Resource Guide emphasises the value in a company with a robust compliance programme acquiring a company without one. The FCPA includes two affirmative defences to anti-bribery charges, codified at 15 U.S.C. Sec - tion 78dd-1(c). • The payment, offer, etc, “was lawful under the written laws and regulations of the... [relevant foreign] country”. A recent case held that this defence only applies where the payment is affirmatively authorised by local law (ie, the defence does not apply where the payment is simply not prohibited). 4. Defences and Exceptions 4.1 Defences
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