xavGE

Obligations of a public company
• influence any official act or decision;
• fail to perform their official duties or
secure any improper advantage (e.g., a tax
rate lower than one allowed by law); or
• use their influence with a foreign
government or instrumentality thereof
to influence any act or decision of that
government or instrumentality.
The types of payments described
above cannot be made or offered through
a third party if the payor knows that all
or a portion of the payment would be
made or offered to a non-U.S. official.
The company may be deemed to “know”
of improper payments to intermediaries
even without actual knowledge of a
bribe. A person is considered to “know”
of improper payments if circumstances
exist, or if the person has a firm belief that
they exist, indicating that the prohibited
conduct is substantially certain to
occur. Conscious disregard or deliberate
ignorance of known circumstances that
should reasonably alert one to the high
probability of a bribe can lead to liability.
If the company ignores warnings or “red
flags” indicating that its funds were
being used to bribe foreign officials, the
company may be subject to prosecution.
The nature of those red flags varies
depending on the circumstances, but
enforcement authorities likely will expect
companies to be particularly vigilant when
active in industries (e.g., the oil business)
or geographical areas (e.g., certain
countries in Africa) known for corruption,
or with parties that have a history of
ethical problems.
The antibribery provisions apply to
any acts of the company involving U.S.
interstate commerce. If the company
is located or has its principal place of
business in the United States, it is subject
to the antibribery provisions regardless
of any other tie to the United States.
Individual directors or employees of
the company who are U.S. citizens or
residents are subject to the antibribery
provisions regardless of any other
connection with the United States.
Exclusions from FCPA: The FCPA contains
an important exception: it permits socalled
“grease” payments. A grease payment
is a payment whose purpose is to facilitate
or expedite “routine governmental action.”
Examples of such actions include obtaining
permits, processing visas and providing
police protection. “Routine government
action” does not include a decision by a
non-U.S. official to award new business
or to continue business with a particular
company.
The FCPA also has two affirmative
defenses:
• The payment at issue was lawful
under the written laws of the foreign
country; or
• The payment was made for a
reasonable, bona fide business purpose,
such as travel and lodging expenses,
for the promotion, demonstrations or
explanation of a product (e.g., paying
the reasonable expenses of a non-U.S.
official who comes to the United States
for a demonstration of a company
product).
Enforcement and penalties: The FCPA is
enforced by the U.S. Department of Justice
and the SEC. Penalties can be severe,
and enforcement has been aggressively
expanded in recent years:
• Accounting provisions—If convicted
of knowing violations, individuals
may be sentenced to up to 20 years’
imprisonment and fined up to $5
million for each violation, while
companies may be fined up to $25
million for each violation.
• Antibribery provisions—Convicted
individuals may be sentenced to up to
five years’ imprisonment and up to a
$250,000 fine for each violation. The
company employing the individual may
not pay this fine on the employee’s
behalf. Convicted companies may be
fined $2 million or twice the applicable
gross gain or loss, whichever is greater,
for each violation.
When settling FCPA cases in recent
years, the U.S. Department of Justice
has frequently required companies to
hire an FCPA compliance monitor that
periodically reports to the government
on the company’s efforts to improve its
anticorruption policies.
In the past few years, the size of the
penalties imposed for FCPA violations
has significantly increased, including a
$800 million penalty against Siemens
in 2008, $579 million against KBR and
Halliburton in 2009, $400 million against
BAE Systems in 2010, $219 million against
JGC Corporation in 2011 and $60 million
against Pfizer Inc. in 2012.
6.2 Listing standards
NYSE
When a company’s shares are listed
on the NYSE or NYSE MKT, investors
generally expect compliance with ongoing
financial standards, disclosure policies and
corporate governance practices designed to
promote integrity and accountability.
(a) Financial and distribution standards
The NYSE and NYSE MKT have
established quantitative and qualitative
standards for initial listing of U.S. and
non-U.S. companies. The financial
standards for operating companies
listing on the NYSE or NYSE MKT are
summarized in the appendices. Standards
reflect the different types of issues and
issuers. Listed companies must meet
continued listing standards on an ongoing
basis. These too are summarized in the
appendices. If companies fall below
continued listing standards, generally they
are afforded a period of time to return to
compliance. Please see the appendices for
more details.
(b) Governance requirements
In addition to these quantitative listing
standards, the company must meet NYSE
or NYSE MKT corporate governance listing
standards, as applicable. The company
must comply with corporate governance
requirements at the time of listing and
throughout the life of its listing. As with
the quantitative standards, different
standards are applicable to different types
of issuers. In addition, for a company
listing in conjunction with an IPO, certain
of the corporate governance requirements
can be phased in. Governance requirements
for NYSE MKT listed companies, designed
to accommodate smaller companies, differ
from NYSE requirements.
To learn more about the NYSE and
NYSE MKT financial, distribution and
governance requirements, please refer
to the complete requirements outlined
in the New York Stock Exchange Listed
Company Manual, the comprehensive
rulebook for listed companies, which can
NYSE IPO Guide
69