Zitamar News | November.08.2017
Frédéric Lalance, a partner in Orrick’s Paris litigation team and a member of the firm’s global Africa practice, recently spoke with Mozambique-based Zitamar News regarding an investigation by the U.S. Department of Justice into three maritime security deals that may have facilitated improper payments to Mozambican government officials. Many believe that the international banks involved in the deals should be held responsible.
According to Frédéric, U.S. authorities have particular leverage when it comes to putting pressure on international banks. “The DoJ has very significant resources, and are capable of sending teams all over the world,” he said. “The fact is that they have a great leverage power, specifically for banks. If foreign banks are under investigation of the Foreign Corrupt Practices Act (FCPA), the license of the bank in the U.S. might be at stake....as you can imagine that’s a serious concern.”
Frédéric noted that it is likely that the U.S. Federal Reserve is also involved in the investigation, and that the U.S. authorities may call on their counterparts in the UK, such as the Serious Fraud Office, to assist. However, Frédéric said it was unlikely that the U.S. authorities would pursue the Mozambican officials who may have benefited from the deals, noting, “They could go after the company that was supposed to supply the boats, but I don’t think they will go after officials in Mozambique – that’s not the purpose of the FCPA legislation.”
Because the deals were financed in U.S. dollars, the banks cannot avoid U.S. jurisdiction no matter what country they are based in. “If your transaction is done in U.S. dollars, it will be ultimately compensated with a U.S. bank – so you will come under FCPA legislation,” Frédéric concluded.