Law firm Foley & Lardner LLP has written an article providing guidance to firms using agents to secure business in countries with poor governance.

Halliburton was the subject of an enforcement action by the SEC under the Foreign Corrupt Practices Act for record keeping and internal control failures. At the same time, a subsidiary of Halliburton's then subsidiary Kellogg Brown & Root Inc was subject to an enforcement action by the US Department of Justice in relation to bribes paid to Nigerian government officials to secure a contract to develop an oil facility.

Halliburton and KBR settled the actions jointly, agreeing to disgorge $177 million of profits. KBR's subsidiary paid $402 million in fines.

This Foley & Lardner LLP article looks at the lessons US corporations should learn to avoid ending up in the same position as Halliburton did here. It is therefore not examining KBR's criminal conduct, but rather Halliburton's liability in relation to actions taken abroad by a subsidiary.

The article is useful because it makes the facts of the Halliburton case clear, and because it brings home to US corporations the fact that enforcement of the FCPA is being pursued with an eye for "substance over form". You cannot get around the FCPA by relying on an overseas subsidiary to do the dirty work.

This is a good thing.