In order to limit the risk of liability and strengthen their duty of care, authors-writers require issuers to disclose during due diligence all acts committed in violation of the FCPA and other applicable anti-corruption laws and (2) to implement these anti-corruption rules in the insurance and guarantees (reps) of the subscription contract or the contract of sale for transactions referred to in Sections 144A and S Regulation.  To be effective, a compliance program should include the appointment of a corporate compliance officer, a written anti-corruption directive, training and anti-corruption provisions in contractual agreements with third parties and customers/suppliers. The parties also negotiate the degree of knowledge the issuer needs with respect to its compliance, a term commonly referred to as the “knowledge qualifier”. Generally speaking, sub-writers insist that a “clean representative” attest to compliance with certain anti-corruption laws, whether or not he is aware of such compliance. On the other hand, issuers will want to limit the scope of the knowledge and investigations requested of them. In determining whether a certificate of competency is appropriate, the Parties should (1) take into account the degree of vigilance of the sub-perpetrators in the context of the issuer`s anti-corruption programme, (2) the quality of the issuer`s anti-corruption programme, (3) the risk of non-compliance by the issuer and (4) the issuer`s compliance history. Representatives in underwriting agreements must spread the risk between the parties and focus the due diligence efforts of the sub-authors. Investment banks are increasingly concerned about the corruption liability of issuers for whom they structure and carry out capital market transactions. Asian transactioners require issuers to attest to their compliance with the U.S.
Foreign Corrupt Practices Act (FCPA) as a prerequisite for an offering of securities. This is the case whether or not the transaction is registered with the U.S. Securities and Exchange Commission (SEC) or whether the songwriter is the first purchaser of a tax-exempt transaction. Their concern arises even though the Asian issuer is not subject to the jurisdiction of the FCPA. This article explains why, despite the above points, the FCPA plays a role in these transactions. . . .