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How to Minimize Foreign Corrupt Practices Act (FCPA) Risk in Health Care Acquisitions

When acquiring a health care company doing business abroad, there is no such thing as being too thorough with anti-corruption due diligence.  The Department of Justice and the Securities and Exchange Commission have the health care industry on their radar screens for FCPA enforcement.  Even if your company conducts business ethically, before, during, and after an acquisition, you can take on civil or criminal risk as a result of successor liability.

There are at least five steps that acquiring companies can take to minimize risk, according to“Avoiding the Mourning After: Minimizing FCPA Risk of Pass Through or Successor Liability,” an article co-authored by Mintz Levin attorney and former federal prosecutor Paul Pelletier, published in the March 2013 issue of Compliance Today.  In a nutshell, those five steps are as follows:

1. Conduct a first-tier review of all relationships with foreign government officials.

2. Perform a second-tier review of all contractual relationships, consultants, and third-party intermediaries.

3. Investigate red flags and seek FCPA counsel if a FCPA violation may have occurred.

4. Take steps to end any potentially corrupt practices, remediate past corrupt behavior at the company being acquired, and seek FCPA counsel on self-disclosure of the findings.

5. Conduct post-merger anti-corruption trainings with employees of the acquired company.

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About this Author

Karen Lovitch Mintz DC Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Medicare, Medicaid & Commercial Coverage & Reimbursement Health Care Transactions Health Care Transactional Due Diligence Health Care Enforcement & Investigations

Karen focuses her practice on representing health care companies in regulatory, transactional, and operational matters. She has a substantial health care regulatory background and advises clients on matters pertaining to the federal anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, the Clinical Laboratory Improvement Amendments of 1988, and the federal Physician Payments Sunshine Act. Karen often applies her strategic insight on these matters to counsel companies on regulatory issues arising in connection with mergers and acquisitions and other...