Partner Scott Wilson Quoted in FCPA Report Series on Customs Corruption Risks
November 18, 2015
Boies, Schiller & Flexner partner Scott Wilson was quoted extensively by The FCPA Report in a three-part series of articles regarding customs corruption risks.
In the first article of the series, “Identifying the Problem Areas,” Mr. Wilson commented on the risks of company employees and agents interacting with third party customs brokers or officials, stating that delays in processing the entry of goods into a country “can create pressure on employees to resort to bribery.” He noted that companies can mitigate these risks by “Building contingencies into a company’s procurement process such that it has leeway in its supply chain schedule decreases the pressure to get things through customs quickly which in turn decreases the risk of corruption.” He added that companies can “also look for local suppliers as a way to circumvent the need to deal with customs entirely.”
In the second article, Mr. Wilson spoke to The FCPA Report about corruption risks involving brokers, freight forwarders and other third parties. As a “best practice,” he noted, companies can extend compliance training to customs agents: “Larger companies may be able to do bespoke trainings; smaller companies can outsource knowledge-based trainings to vendors,” Mr. Wilson said. However, he added, “if third-party training is on a webcast, or just documents, there is the risk that it will be ignored. It’s expensive, and it’s not always feasible, but there’s nothing like an in-person training session.”
In the final installment in the series, Mr. Wilson observed that the FCPA’s exception for so-called facilitation payments, instances in which sums are used to expedite the clearance of goods through customs, has become a “trap for the unwary.” Remarking how narrowly the DOJ and SEC define the routine governmental action exception for facilitating payments found in the FCPA, Mr, Wilson noted that “The distinction between facilitating payments and bribes is hard for seasoned practitioners to wrap their heads around,” he said, “and it is nearly impossible for foreign subsidiary employees or low level supply chain managers to understand.” Mr. Wilson noted that authorizing front-line employees to utilize the statutory exception “really opens the door to stretch the exception to permit larger payments.”
For more, see Megan Zwiebel, “Customs Corruption Risks: Identifying the Problem Areas,” The FCPA Report, Vol. 4, No. 21 (Oct. 21, 2015); “Four Ways to Limit the Risks of Working with Customs Brokers, Freight Forwarders and Other Third Parties,” Vol. 4, No. 23 (Nov. 4, 2015); and “Should a Company Ever Pay a Facilitation Payment to a Customs Official?,” Vol. 4, No. 24 (Nov. 18, 2015).
Subscription required to access articles.
Related Lawyer: Scott R. Wilson
Related Practice: Global Investigations and White Collar Defense