432 NEWSLETTER 2021 (iii) the offer in question must relate to something valuable. In cases where these conditions are met and where group of companies are involved, the question regarding which company shall be responsible must be evaluated separately. As it is clearly seen in the Resource Guide to the U.S. Foreign Corrupt Practices Act, parent companies may be held liable for their subsidiaries’ FCPAviolations. Such may firstly occur where the parent company directly contributes to the subsidiary’s corrupt activities, or directs, or instructs the subsidiary to act corruptly. Secondly, the parent company may be held responsible within the framework of agency principles. To that end, the U.S. Securities and Exchange Commission (“SEC”) examines the parent company’s control mechanism over its subsidiary. In cases where the parent company has knowledge about its subsidiaries’ activities, the parent company may also bear criminal and legal liability within the scope of the FCPA. However, there is no clear regulation as to when the parent company shall be deemed to have knowledge of its subsidiaries’ activities, as only certain sample criteria are used. The concept of having knowledge is used in a wide-ranging scope, as in the case of other provisions of the FCPA. As a matter of fact, it is accepted that the parent company has knowledge of the corrupt practice if the parent company knows that a bribe will be given, has a strong opinion on this issue, or is aware of a high possibility. What constitutes as having knowledge was assessed in detail in the case of Frederick Bourke, where Bourke was held liable within the scope of the FCPA for bribery and corrupted activities of the company in which he invested in Azerbaijan. Although Bourke was not actually aware of the bribery, it was decided that he had knowledge of the crime, as he had insisted on not revealing the truth and ignored serious indications. A very similar approach is also used when assessing the parent companies’ knowledge with regards to its subsidiaries’ actions, as observed in the sample cases. Sample Cases For instance, in the case of United Industrial, the SEC concluded that the parent company had sufficient knowledge and control of its subsidiary’s actions to be liable under the FCPA due to reasons, in that
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