May 23, 2017, Covington Alert

On May 11 and 12, 2017, the China Food and Drug Administration (“CFDA”) published drafts of four proposed policies in the form of circulars (or notices) for public comment. These “Proposed Policies” include significant reforms in the areas of the new drug and device approval process (“Circular 52”), clinical trial regulation (“Circular 53”), life-cycle management and post-marketing surveillance (“Circular 54”), and regulatory data protection and patent linkage (“Circular 55”). Comments for each circular are due on June 10, 2017, but CFDA recommends that the comments be submitted by email before May 25, 2017.

May 9, 2017, Covington Alert

On April 13, 2017, China’s State Cryptography Administration (“SCA”) published a draft Encryption Law (“the draft Law”) for public comment.

After several years of drafting, the draft Law, if enacted as drafted, would be the first Chinese statute to systematically address encryption, covering “the research, production, management, import and export, testing, authentication, use, and regulation of encryption.” China has long regulated the import, export, sale, use, and scientific research of “commercial” encryption. The draft Law, however, provides rules for three categories of encryption—“ordinary” encryption, “core” encryption, and “commercial” encryption—with a view to establishing a uniform regulatory framework that would govern all types of encryption and providing SCA with greater enforcement authority.

March 2, 2017, Covington Alert

The Fraud Section of the U.S. Department of Justice (“DOJ”) quietly released new guidance last month entitled “Evaluation of Corporate Compliance Programs” (the “Guidance”). While noting that “the Fraud Section does not use any rigid formula to assess the effectiveness of corporate compliance programs,” the eight-page Guidance outlines 11 “Sample Topics and Questions” that DOJ “has frequently found relevant in evaluating a corporate compliance program” in the context of a criminal investigation.

February 19, 2017, Financial Times

Eric Carlson is quoted in a Financial Times article regarding an initiative by the Chinese Government to reduce marked-up prices and corruption in multi-tier distribution chains of pharmaceuticals, known as the “two invoice reform.” According to Carlson, the crackdown on small distributors would accelerate sector consolidation, “centralising distribution in a ...

Winter 2017, Covington Alert

Anti-corruption enforcement is at a crossroads. In many respects, global anti-corruption enforcement has never been more active. The U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) in 2016 collected a total of $2.41 billion through FCPA enforcement actions against 27 corporate defendants, including through their share of a record-setting $3.5 billion global resolution with Brazilian construction conglomerate Odebrecht S.A. and its affiliate Braskem S.A., and a $515 million resolution with Teva Pharmaceuticals (the largest-ever FCPA resolution with a life sciences company). Those settlements are certainly noteworthy, but 2016 will be remembered for more than large-dollar resolutions. The Fraud Section of DOJ’s Criminal Division launched an FCPA Pilot Program to encourage voluntary disclosures and heightened cooperation; the U.S. announced several major coordinated, parallel enforcement actions with its foreign counterparts; and, perhaps reflecting a new trend, numerous individuals faced charges in the U.S. and abroad at the same time as settlements were reached with the relevant corporate entity.

January 23, 2017, Covington Alert

On January 9, 2017, eight Chinese ministries announced a significant new policy that aims to reduce marked-up prices and corruption in multi-tier distribution chains. The policy effectively requires that under most circumstances, at most two invoices may be issued throughout the distribution chain, with one from the manufacturer to a distributor and another from the distributor to the end hospital. The policy applies only to drugs, but some provinces reportedly have been implementing similar policies for medical devices.

January 3, 2017, Covington Alert

On December 29, 2016, General Cable Corporation (“GCC”), a global manufacturer of wire and cable products, agreed to pay approximately $75.8 million in connection with a non-prosecution agreement with the Department of Justice (“DOJ”) and a cease and desist order with the U.S. Securities and Exchange Commission (“SEC”) to settle allegations that it violated the anti-bribery, books and records, and internal controls provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”). The settlement, which includes an admission of factual allegations but no criminal charges, requires GCC to pay a criminal penalty of $20.5 million to the DOJ and $55.3 million in disgorgement and pre-judgment interest to the SEC.

November 8, 2016, Covington Alert

On November 7, the Standing Committee of China’s National People’s Congress (“NPC”) passed China’s first Cybersecurity Law (the “Law”), which will take effect starting June 1, 2017.

Described as China’s “fundamental law” in the area of cybersecurity, the new Law articulates the government’s priorities with respect to “cyberspace sovereignty,” consolidates existing network security-related requirements (covering both cyber and physical aspects of networks), and grants government agencies greater power to regulate cyber activities. It is the first Chinese law that systematically lays out the regulatory requirements on cybersecurity, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. At the same time, it seeks to balance the dual goals of enhancing cybersecurity and developing China’s digital economy, which relies heavily on the free flow of data.

With its broad application, the new Law will have significant and long-lasting implications for companies operating in China or seeking to access the Chinese market. This alert highlights key features of the Law and explains these implications.

November 3, 2016, IBA Asia Pacific Regional Forum on Anti-Corruption Compliance and Enforcement

October 26, 2016, FCPA Blog NYC Conference 2016

October 7, 2016, Covington Alert

On September 29, 2016, the U.S. Department of Justice (“DOJ”) issued letters of declination to NCH Corporation (“NCH”) and HMT LLC (“HMT”). Both companies are Texas-based “domestic concerns.” The letter to NCH, an industrial supply and maintenance company, relates to an investigation into possible violations of the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”) based on alleged bribes paid by its Chinese subsidiary to Chinese state-owned customers. The letter to HMT, a company that manufactures, supplies, and services aboveground liquid storage tanks for oil and gas companies, relates to an investigation into possible violations of the anti-bribery provisions of the FCPA based on alleged bribes paid by an HMT sales agent in Venezuela to Petroleos de Venezuela S.A. (“PDVSA”) and bribes paid by an HMT distributor in China to state-owned customers.

September 28, 2016, The FCPA Report

Eric Carlson is quoted in an FCPA Report article regarding China’s data privacy and cybersecurity laws and how they apply to companies doing business in China. Commenting on performing due diligence while avoiding data privacy issues, Carlson says, “For due diligence purposes, it is still safe and appropriate to gather corporate information such as whether a ...

September 22, 2016, The 6th Asia Pacific Pharmaceutical and Medical Device Compliance Congress, Singapore

September 21, 2016

SHANGHAI—China Law & Practice has named Covington as “Regulatory & Compliance Firm of the Year” at its annual award ceremony. The leading Chinese legal publication also recognized Shanghai partner Eric Carlson as “Regulatory & Compliance Lawyer of the Year” and the firm for its role in the “Outbound Deal of the Year,” China National Tire & Rubber’s $7.8 billion ...

September 19, 2016, Covington Alert

On September 13, 2016, Jun Ping Zhang (“Zhang”), former head of Harris Corporation’s (“Harris”) subsidiary in China, agreed to pay $46,000 to settle allegations by the U.S. Securities and Exchange Commission (“SEC”) that Zhang knowingly authorized and facilitated bribes to Chinese government officials at state-owned hospitals and local health departments and caused Harris’s books and records to inaccurately record these payments as legitimate business expenses. The SEC alleged that up to $1 million in improper payments were made during April 2011 and April 2012 and as a result, the China-based subsidiary was awarded over $9.6 million in contracts by state-owned entities.

September 7, 2016, Covington Report

August 12, 2016, Inside Privacy

China’s State Administration of Industry and Commerce (“SAIC”) has released for public comment a draft regulation implementing recent amendments to a consumer protection law that would, among other things, supplement existing privacy obligations for businesses operating in China. The “Regulations on the Implementation of the Law on the Protection of the Rights ...

July 18, 2016, Covington Alert

On July 11, 2016, Johnson Controls, Inc. (“JCI”) agreed to pay $14.4 million to settle allegations by the U.S. Securities and Exchange Commission that JCI, through its subsidiaries in China, violated the books and records and internal controls provisions of the U.S. Foreign Corrupt Practices Act. The SEC alleged that, from 2007 to 2013, nearly all of the employees of JCI’s Chinese subsidiaries engaged in a scheme by which they made improper payments of approximately $4.9 million to employees of Chinese government-owned shipyards, ship owners, and others.

July 12, 2016, Covington Alert

On July 5, 2016, China’s National People’s Congress (“NPC”) released a new draft of the Cybersecurity Law for public comment (official Chinese version available here; unofficial translation from AmCham China available here). The revised draft contains a number of significant changes from the first draft, which was released in July 2015, but retains many of the provisions from the first draft that raised concerns among multinational companies, especially those in the tech sector, about the potential to serve as a tool for discriminating against foreign technologies in favor of domestic industry.

July 1, 2016, Inside Privacy

The Cyberspace Administration of China (“CAC”) has issued new rules regulating apps for smartphone/mobile devices, the Rules on the Management of Mobile App Information Services (“App Rules,” available here, preceded by a Q&A section, all in Chinese), that will come into effect on August 1, 2016. The App Rules are aimed primarily at regulating the rapidly...… ...

June 29, 2016, FCPA Report

June 13, 2016, Covington Alert

On June 7, 2016, the Securities and Exchange Commission (“SEC”) announced a non-prosecution agreement (“NPA”) with Akamai, Inc., an internet cloud services company, in connection with an investigation of possible violations of the books and records and internal accounting controls provisions of the US Foreign Corrupt Practices Act (“FCPA”) based on payments by its China subsidiary to employees of state-owned entities (“SOEs”) in China. Under the NPA, Akamai agreed to pay over $670,000 in disgorgement and pre-judgment interest, but Akamai was not charged with violating the FCPA and did not have to pay additional penalties. Additionally, as part of its recently announced enforcement pilot program, the US Department of Justice (“DOJ”) issued a letter of declination to Akamai closing its inquiry into the matter.

June 13, 2016, Covington Alert

On June 7, 2016, the Securities and Exchange Commission (“SEC”) announced a non-prosecution agreement (“NPA”) with Nortek, Inc., a manufacturer of construction and remodeling products, in connection with an investigation into possible violations of the books and records and internal accounting controls provisions of the US Foreign Corrupt Practices Act (“FCPA”) based on payments by its an indirect wholly-owned Chinese subsidiary to Chinese government officials. Under the NPA, Nortek agreed to pay over $320,000 in disgorgement and pre-judgment interest, but Nortek was not charged with violating the FCPA and did not have to pay additional penalties. Additionally, as part of its recently announced enforcement pilot program, the US Department of Justice (“DOJ”) issued a letter of declination to Nortek closing its inquiry into the matter.

June 1, 2016, Inside Privacy

This month, China’s National Information Security Standardization Technical Committee (“NISSTC”) organized a meeting to launch a working group tasked with drafting a Personal Information Security Standard (“PIS Standard”). NISSTC is a government committee jointly supervised by the Standardization Administration of China and the Cyberspace Administration of ...

May 6, 2016, Insight

May 2016, WorldECR

April 26, 2016 (presented in Mandarin), Compliance in China Seminar

April 21, 2016, Covington Alert

On April 5, 2016, the United States Department of Justice (“DOJ”), through the Criminal Division’s Fraud Section, announced a one-year Foreign Corrupt Practices Act (“FCPA”) enforcement pilot program (the “Pilot Program”) intended to motivate companies to voluntarily disclose FCPA-related misconduct and increase transparency around the Fraud Section’s approach to mitigation credit in corporate FCPA resolutions.

April 2016, Covington Alert

On April 18, 2016, the Chinese government released a judicial interpretation that clarifies certain aspects of the PRC Criminal Law with regard to bribery and corruption. The Interpretation provides additional clarity in understanding the amendments to the Criminal Law that took effect last year, most notably by (1) expanding the definition of bribes to include certain intangible benefits, (2) clarifying that gifts of money or property will still be viewed as bribes when given after benefits are received, (3) re-establishing monetary thresholds and standards for bribery prosecutions, including raising the thresholds for bribes involving government officials and non-government officials, and (4) providing additional details on the requirements for leniency and voluntary disclosure.

April 2016, Covington Alert

On April 7, 2016, Las Vegas Sands Corp. (“LVSC”) agreed to pay $9 million to settle allegations by the Securities and Exchange Commission (“SEC”) that LVSC, through its subsidiaries in China and Macao, violated the US Foreign Corrupt Practices Act (“FCPA”). The settlement resolves allegations that, from 2006 through at least 2011, LVSC and its subsidiaries violated the FCPA by failing to devise and maintain a system of internal accounting controls over its operations in China and Macao, resulting in more than $62 million being transferred to a Chinese consultant (the “Consultant”) who claimed to be a former Chinese government official. Only in 2007, after LVSC had made several payments to the Consultant, did it conduct due diligence on the Consultant and three of his business units. However, LVSC failed to conduct due diligence on at least seven other of the Consultant’s businesses to which LVSC transferred funds. The payments made to the Consultant were made for a series of transactions ostensibly designed to bring more customers to LVSC’s Macao-based casino as well as to boost its image in China.

March 30, 2016, ACI’s 6th Advanced Industry Forum on Global Encryption, Cloud & Cybersecurity Controls

March 25, 2016, Covington Alert

On March 23, 2016, Novartis AG (“Novartis”) agreed to pay $25 million to settle civil charges with the Securities and Exchange Commission (“SEC”) alleging that it violated the Foreign Corrupt Practices Act (the “FCPA”) by paying bribes to healthcare professionals (“HCPs”) in China from 2009 to 2013 to increase sales. Employees and managers of its two China-based subsidiaries attempted to hide the improper payments by using complicit third party agents and by improperly recording them as legitimate expenses for travel and entertainment, conferences, educational events, and medical studies. These books and records were later consolidated into the financial reports of Novartis, which is listed on the New York Stock Exchange. This conduct resulted in violations of the books and records and internal accounting controls provisions of the FCPA.

March 2016, Covington Alert

On March 1, 2016, the Securities and Exchange Commission announced an agreement with Qualcomm Incorporated to settle charges that it violated the Foreign Corrupt Practices Act by hiring relatives of Chinese government officials to gain business advantages in the Chinese telecommunications market. The SEC also alleged that Qualcomm provided gifts, travels, and entertainment -- including hospitality at sporting events such as the Olympics -- to Chinese officials and their family members to try to influence these officials to adopt and retain its technologies. According to the SEC, Qualcomm misrepresented these improper benefits in its books and records as legitimate business expenses. Qualcomm agreed to pay a civil money penalty of $7.5 million to the SEC without admitting or denying the SEC findings.

February 29, 2016, Covington Alert

February 21, 2016, Covington Alert

February 9, 2016, Covington Alert

January 5, 2016, Inside Privacy

On December 27, 2015, the Standing Committee of the National People’s Congress (NPC), China’s top legislative body, enacted a Counter-Terrorism Law (see the Chinese version here, and an unofficial English translation here), which took effect on January 1, 2016.  The adoption of this law, a year after the first draft was released for public comment,...… Continue ...

2016, Covington Report

October 29, 2015, Covington Alert

October 9, 2015, Covington Alert

September 2015, Covington Alert

September 1, 2015, Inside Privacy

On August 29, 2015, China’s legislature, the National People’s Congress, amended the Criminal Law, effective November 1, 2015. Among other things, the amendments modify and add several provisions related to data privacy and cybersecurity. We discuss some of these key amendments below. Expanded criminal sanctions for illegal sale or provision of personal ...

September 2015, Bloomberg BNA World Data Protection Report

August 2015, Bloomberg BNA World Data Protection Report

July 29, 2015, Covington Alert

July 13, 2015, Inside Privacy

On July 6, 2015, China’s National People’s Congress (NPC) released a draft of the Network Security Law  (“Draft Law,” referred to in some press articles as the draft Cybersecurity Law) for public comment.  Comments can be submitted through the NPC website or by mail before August 5, 2015. The release of the Draft Law follows...… Continue Reading

July 7, 2015, Inside Privacy

On July 1, 2015, China’s State Administration for Industry and Commerce published a draft of the Interim Measures on Supervision of Internet Advertising (“Draft Internet Advertising Measures”; original Chinese here) for public comment. If adopted as drafted, the Draft Internet Advertising Measures would (1) require advertisements in email and instant messaging ...

July 2015, Bloomberg BNA World Data Protection Report

June 4, 2015, Inside Privacy

New clarifying provisions in China regulating how marketing can be done via short message service (“SMS”) will come into effect on June 30, 2015. On May 28, 2015, the Ministry of Industry and Information Technology (“MIIT”) published measures to implement various high-level provisions related to SMS marketing in several different laws, such as the Decision...… ...

June 2015, Bloomberg BNA World Data Protection Report

May 27, 2015, Covington Alert

May 21, 2015, Covington E-Alert

April 22, 2015, Covington E-Alert

March 2015, Covington E-Alert

Winter 2015, Covington Advisory

February 5, 2015, Inside Privacy

China’s principal internet regulator, the Cyberspace Administration of China (“CAC”), announced this week that China will move forward new legislation to combat the improper collection, use, and sale of personal information. The new legislation, announced during an interview of a senior CAC official by state-owned Xinhua News, is reportedly being drafted by CAC, ...

February 2015, Bloomberg BNA World Data Protection Report

January 26, 2015, Inside Privacy

New consumer protection provisions that clarify how companies may collect, use, and protect personal information of consumers will come into effect in China on March 15, 2015. On January 5, 2015, China’s State Administration of Industry and Commerce (“SAIC”) issued measures to implement China’s Consumer Rights Protection Law (“CRPL”), which was amended effective ...

January 5, 2015, State Administration for Industry and Commerce

December 18, 2014, Covington E-Alert

December 17, 2014, Covington E-Alert

December 1, 2014, Covington E-Alert

December 1, 2014, Covington E-Alert

November 13, 2014

Shanghai, November 13, 2014 — Covington & Burling has been named “Compliance / Regulatory Firm of the Year” by Asian-MENA Counsel magazine. Asian-MENA Counsel bases the award on a survey sent to over 21,000 in-house counsel and company directors across Asia Pacific and the Middle East. Covington partner Eric Carlson, who leads the firm’s compliance practice in ...

November 6, 2014, Covington E-Alert

October 16, 2014, Life Sciences Essentials Series Webinar

October 2014, Covington Life Sciences Essentials: The Importance of Creating a Coordinated Multi-Jurisdictional Compliance Program

September 2014, ACI FCPA Boot Camp San Francisco

September 2014, ACI Global Encryption Controls

July 2014, Bloomberg BNA World Data Protection Report

May 23, 2014, Covington Advisory

April 30, 2014, BayBio - Lunch & Learn

April 2, 2014

SAN FRANCISCO, April 2, 2014 — Global Investigations Review magazine has named Covington & Burling partners Tammy Albarrán and Eric Carlson to its inaugural list of 40 leading investigations lawyers under the age of 40. The list recognizes the “next generation that will lead the global investigations bar.” Ms. Albarrán, 39, is based in Covington’s San Francisco ...

March 3, 2014, Covington E-Alert

January 17, 2014, Business Beyond Borders: NYU-Shanghai Jiaotong University Conference

January 2014, Covington Advisory

December 31, 2013, Covington E-Alert

December 2013, Covington E-Alert

November 2013, Covington Life Science Seminar 2013

November 2013, Bloomberg BNA World Data Protection Report

October 24, 2013, Ethisphere

October 24, 2013, Covington E-Alert

October 21, 2013, Covington E-Alert

August 20, 2013, Covington E-Alert

August 14, 2013, Covington E-Alert

August 14, 2013, Covington E-Alert

June 2013, Corruption & Compliance Asia Congress 2013

June 2013, Corruption & Compliance Asia Congress 2013

May 17, 2013, Covington E-Alert

April 26, 2013, Covington E-Alert

April 2013, Data Protection Law & Policy

April 2013, 6th Annual New Environment for FDI in China Roundtable

March 13, 2013, Covington E-Alert

March 6, 2013, Covington E-Alert

February 15, 2013, Covington E-Alert

February 2013, Covington Advisory

February 2013, 2013 China Anti-Corruption Summit

February 2013, 2013 China Anti-Corruption Summit

January 11, 2013, Covington E-Alert

January 2013, Covington E-Alert

December 2012/January 2013, Mr. Carlson was quoted in The Corporate Treasurer

December 10, 2012, Covington E-Alert

December 2012, Ambassador’s Investment Forum

December 2012, Advanced Anti-Corruption Strategies

December 2012, Covington E-Alert

December 2012, Covington E-Alert

December 2012, Advanced Anti-Corruption Strategies

November 2012, Covington Advisory

October 1, 2012

WASHINGTON, DC, October 1, 2012 — Covington & Burling is pleased to announce that it has elected 15 new lawyers to its partnership. This group is comprised of diverse and talented individuals from five offices who have made their mark at the firm through exceptional work and the highest standards of client service. “We’re delighted to welcome these 15 lawyers to ...

October 2012, Global Anti-Fraud Conference 2012

October 2012, Covington E-Alert

September 25, 2012, Covington E-Alert

September 2012, Corruption and Compliance South and Southeast Asia Summit

September 2012, Scrip Regulatory Affairs

September 2012, Corruption and Compliance South and Southeast Asia Summit

August 13, 2012, Covington E-Alert

August 2012, Association for Corporate Growth

August 2012) (presented in Mandarin, M&A and China Outbound Investment Conference

July 19, 2012, Covington E-Alert

July 19, 2012, Covington E-Alert

July 2012, Covington E-Alert

June 14, 2012, Covington E-Alert

April 2012, Anti-Corruption China Summit

April 2012, 3rd Advanced Industry Summit on Complying with Global Encryption Controls

April 2012, Anti-Corruption China Summit

April 2012) (presented in Mandarin, 6th China New Energy International Forum

April 2012, Covington E-Alert

April 2012, Covington E-Alert

March 29, 2012, Covington E-Alert

March 19, 2012

LONDON, 19 March, 2012 — Covington & Burling LLP received 46 individual mentions and 20 practice mentions in the Chambers Global 2012 edition. The guidebook, which ranks lawyers globally by pan-regional and country practice area, is designed to identify the most skilled legal practitioners based on the qualities most valued by clients. The Covington lawyers ...

March 2012, Covington E-Alert

March 2012, Corporate Mergers & Acquisitions Tactics and Best Practices

March 2012, CEBEX Group US FCPA Training

February 17, 2012, Covington E-Alert

February 2012, Covington E-Alert

February 2012, Defence Exports Asia Pacific

January 19, 2012, Covington E-Alert

January 2012, Covington E-Alert

January 2012, World Data Protection Report

December 8, 2011, Covington E-Alert

November 2011, Anti-Corruption China Summit

November 2011, West LegalEdcenter Webcast

November 2011, Anti-Corruption China Summit

October 18, 2011, Covington E-Alert

October 2011, China Anti-Corruption Forum 2011

August 31, 2011, Covington E-Alert

July/August 2011 edition, Mr. Carlson was quoted in CDR magazine

July 2011, Covington E-Alert

July 2011) (presented in Mandarin, Corporate Compliance Conference 2011

June 2011, Financial Fraud Law Report

June 2011, ACI Anti-Corruption Compliance in Emerging Markets

May 25, 2011, Covington E-Alert

May 11, 2011, Covington E-Alert

April 2011, Mr. Carlson was quoted in Compliance Week

April 2011, 2nd China Summit on Export Controls Compliance

March 1, 2011, Covington E-Alert

March 2011, Covington E-Alert

February 28, 2011, Covington E-Alert

January 2011, 4th Annual Anti-Corruption Asia Congress

January 2011, Covington E-Alert

12/18/2010) (Chinese only, Mr. Carlson was quoted in China Business Journal

November 2010, 4th Anti-Corruption China Summit

November 2010) (presented in Mandarin, 4th Corporate Compliance Conference 2010

October 2010, Singapore Summit on Export Control Compliance

9/27/2010 (Chinese Only), Mr. Carlson was quoted in Economy and Nation Weekly

9/27/2010 (Chinese Only), Mr. Carlson was quoted in Economy and Nation Weekly

September 2010, Anti-Corruption South and Southeast Asia Summit

August 5, 2010, Covington & Burling Webinar

July 21, 2010, Covington E-Alert

June 25, 2010, Covington E-Alert

June 2010, Mr. Carlson was quoted in the China Business Law Journal

March 2010) (presented in Mandarin, Anti-Corruption Compliance in China Summit 2010

February 2, 2010, Covington E-Alert

August 17, 2009, Covington E-Alert

May 2009, Anti-Corruption and FCPA Compliance China Summit

May 2009, Anti-Corruption and FCPA Compliance China Summit

May 2009, Anti-Corruption and FCPA Compliance China Summit

April 14, 2009, Covington E-Alert

March 2009, Anti-Corruption Compliance in China Summit

March 2009, Anti-Corruption Compliance in China Summit