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Important DOJ Update on Mergers and Acquisitions Due Diligence and FCPA Enforcement
Tuesday, December 2, 2014

One question we all face at one time or another throughout the day is: “am I doing enough?” This rings true to both work and at home. Often times, there is not definitive answer. A Department of Justice (DOJ) release on November 7 helped shed light on that question in regards to mergers and acquisitions due diligence.

A U.S. issuer was contemplating the acquisition of a Foreign Target, but had concerns before moving forward. Mainly, the U.S. Issuer was concerned that the Foreign Target and its Seller’s engaging in improper payments in another country would adversely affect their interest. Both the Foreign Target and the Seller have no ties to the United States in regards to the business conducted. The U.S. Issuer wanted an Opinion as to whether the mergers and acquisitions due diligence conducted would lead to an FCPA enforcement action. Surprisingly, the DOJ said there would not be an FCPA enforcement action. Here is what the DOJ said: “successor liability does not . . . create liability where none existed before.”

Essentially, the DOJ said that even though the M&A due diligence uncovered previous criminal and civil liabilities, the U.S. Issuer will not be retroactively punished under the FCPA. It is meaningful to note, however, that as part of the acquisition of the foreign target, the Issuer intended on overhauling the Foreign Target’s compliance program. Once the acquisition is complete, any illegal conduct by the foreign target would fall under the FCPA because of the acquisition by the U.S. Issuer.

When analyzing the effect of this Opinion, it is important to realize that mergers and acquisitions due diligence is crucial before moving forward. Also, upon completion of the acquisition, be sure to implement your own anti-corruption policies to ensure that no action is brought under the FCPA. Lastly, one of the most important things you can do to protect yourself from FCPA enforcement action is to report to the DOJ any corrupt payment uncovered in the due diligence process.

By releasing this opinion, the DOJ is encouraging U.S. businesses to move forward with acquisitions of companies that may have engaged in improper behavior in the past. By allowing an ethical company to complete the acquisition of an unethical company and put unethical company under the ethical company’s umbrella of compliance, you can eliminate corruption.

About Keller

The Kreller Group was founded in 1988. The company provides comprehensive corporate due diligence investigation services for government entities and Fortune 100 and 500 corporations in the U.S. and abroad.  The Kreller Group team is comprised of a worldwide network of investigators and business analysts with domestic and foreign expertise in all jurisdictions. For additional information about the Kreller Companies contact Gina M. Martin, 513.723.8902, or visit

Dylan Owens

Dylan Owens is a global due diligence consultant for Kreller Group.  He advises companies in the areas of M&A Due Diligence and FCPA Compliance Program Construction.  He received his undergraduate degree from Wittenberg University and his Juris Doctor from the Roger Williams University School of Law in Bristol, RI.


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    • 12/17/2018 - For Compliance Databases, a ‘N
    • 10/16/2018 - The Real Cost of FCPA Non-Comp
    • 01/27/2016 - Safe Harbor 2.0 - January 31st
    • 06/18/2015 - DOJ’s Expanding Jurisdiction
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    • 12/02/2014 - Important DOJ Update on Merger
    • 10/28/2014 - Kreller Risk Assessment Matrix
    • 10/22/2014 - Whistleblower: Compliance Offi
    • 09/30/2014 - Instrumentality Defined for FC
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