FCPA attorney foreshadows increased use of new foreign bank subpoena tool – Criminal Law


United States: FCPA attorney foreshadows increased use of new foreign bank subpoena tool

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Nine months ago, Congress gave the Department of Justice (DOJ) and the Department of the Treasury (Treasury) substantial new power to subpoena banking records located abroad in any criminal law investigation. federal. Now, federal prosecutors have started to discuss publicly how they plan to use this new authority in overseas corruption and bribery and other criminal investigations.

As we explained at the time, Congress added this new enforcement authority as part of the Anti-Money Laundering Act of 2020 under the National Defense Authorization Act (NDAA). 2021. It allows the DOJ and the Treasury to subpoena banking records located abroad if the foreign bank has a correspondent bank account in the United States, whether the correspondent account itself has been used or not in connection with the alleged violation of US law. Authority can now be used not only to investigate potential financial crimes, but also to investigate all violation of federal criminal law, to initiate civil proceedings for confiscation of assets or to investigate violations of bank secrecy law or anti-money laundering laws and regulations.

Earlier this week, Lorinda Laryea, senior deputy head of the FCPA unit in the Justice Department’s fraud division, foreshadowed her office’s future use of this expanded subpoena. Speaking at an annual compliance, anti-corruption and investigative summit, Ms Laryea said: “The NDAA subpoena is a tool that we have and will consider, and that we will use under appropriate circumstances. ” Her statement appears to go further than the original view of former U.S. DC attorney Jessie Liu, whose controversial subpoena to three Chinese banks prompted Congress to pass the new subpoena provision in the first place. . After the law was passed, Liu and two other former federal prosecutors pointed out that “it is still unclear how often US prosecutors will seek to use this expanded subpoena authority.”

Of course, prosecutors will always have to consider the diplomatic consequences of using the new extended subpoena power to obtain evidence from foreign banks, especially in cases where foreign blocking laws or secrecy laws. banking are in effect. Laryea acknowledged the “diplomatic sensitivities” at play when US authorities search for foreign bank records. Reflecting the sensitivities, line prosecutors are required to consult with DOJ’s international affairs office and the State Department before requesting such subpoenas.

We expect that federal prosecutors, especially those focusing on foreign bribery, trade sanctions, terrorist financing, and even tax evasion, will increasingly seek to use this powerful and long-sought tool. to access more foreign bank records much faster than possible. using the traditional MLAT process. But the increased use of these new subpoenas seems likely to invite more challenges from foreign banks, whether on the grounds that the subpoenas violate a foreign secrecy or confidentiality law or on the grounds that ‘they are beyond the jurisdiction of the American courts. Stay tuned!

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