Clifford Chance

FCPA Successor Liability: Due Diligence and Integration Are Key

21 November 2014

On November 7, 2014, the U.S. Department of Justice issued a Foreign Corrupt Practices Act Opinion (Opinion Procedure Release 14-02) providing guidance to companies seeking to identify and mitigate risk relating to the acquisition of foreign targets.  First, Release 14-02 reiterates previous guidance that a company's acquisition of a foreign target that was not historically subject to the FCPA does not retroactively create FCPA liability that did not previously exist.  Second, the Release repeats DOJ's longstanding position that pre-closing diligence and post-closing remediation are the key to responsibly integrating targets and avoiding post-acquisition FCPA issues.  While both of these points are consistent with generally understood practice regarding the acquisition of foreign targets, DOJ's acknowledgement that each transaction is different reinforces the argument for tailored, risk based assessment and mitigation of FCPA risk before and after closing.

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