Companies that acquire or invest in offshore entities or in entities that conduct business overseas may inherit FCPA risks.
Clearly, the DOJ and the SEC are viewing these transactions and the resulting combinations with a jaundiced eye. These regulators, most likely, will begin investigations, and, possibly, commence actions. In fact, there have been recent FCPA actions that would fall under this category.
Consequently, acquirers must identify potential FCPA problems during the due diligence process so as to avoid these predicaments. If identified, the acquiring company may be able to restructure the transaction to avoid assuming that liability. Possibly, the parties may also submit an FCPA “opinion procedure request” to the DOJ seeking ways to mitigate the potential liability.
Essentially, it is critical that the due diligence process uncover these problems, and the parties address them before the closing.