Elizabeth C. Grant
The United States Department of Justice and the Securities and Exchange Commission released their highly anticipated Guide to the U.S. Foreign Corrupt Practices Act (FCPA) on November 14, 2012. Although many looked to the agencies to clarify aspects of the FCPA and shed new light on enforcement actions, the Guide provides few new developments or tangible guidance. Instead, the majority of the Guide compiles the already available resources on the FCPA and anti-corruption materials. For instance, it provides the FCPA in its entirety and explains the different terms, incorporating the relevant case law. The Guide also provides pertinent information regarding potential FCPA penalties, other relevant U.S. and international anti-bribery laws, and possible resolutions to FCPA violations and enforcement actions.
However, the Guide does provide some non-binding policy on previously existing FCPA information that the departments would likely follow. For example, without putting forth a concrete definition of “foreign official,” the Guide endorses the expansive interpretation adopted by courts. In doing so, it presents a list of factors that mimics what courts have previously employed in determining whether an entity comprises a “foreign official.” While the Guide addresses the characteristics of an effective compliance program—one that is dynamic and regularly updated to meet the company’s changing needs—it stops short of endorsing that an effective compliance program could function as an affirmative defense. Similarly, the Guide reiterates policy on disclosing improper payments, but leaves businesses without clear insight regarding the value of disclosure.
The Guide provides some new clarification for businesses looking to avoid FCPA violations in practice by giving explanations and hypotheticals concerning improper payments, facilitation payments, and successor liability in mergers and acquisitions. The improper payment section details what could constitute an improper payment to a foreign official under the FCPA. It lists examples and presents hypotheticals to explain improper payments in the areas of gifts, travel, entertainment, and charitable contributions in a foreign country. These examples illustrate how a business’ payments transform from ordinary expenses to bribes with either explicit intent to obtain an advantage or implied intent through perceived indulgence. The Guide also provides hypotheticals regarding facilitation payments in an effort to clarify the FCPA’s narrow exception that allows facilitation payments to be made in the course of routine government action. In addition, it provides a non-exhaustive list of examples to show that a routine governmental action is something done in the official’s ordinarily performed business that does not overly involve the official’s discretion. Furthermore, the Guide’s section on successor liability reiterates practiced enforcement principles under the FCPA, suggesting that companies perform due diligence before acquisition to determine preexisting violations as liability carries through even though the company may cease to exist or have significant assets. The Guide further provides hypotheticals to demonstrate the nuances of when a company runs the risk of an enforcement action.
Overall, the Guide provides a comprehensive compilation of resources for businesses and practitioners to avoid and anticipate all steps of an FCPA violation. Although not offering the depth of new knowledge that many had wished for, it does offer clarification on smaller issues that are likely to arise during the course of international business relations.
The full text of the Guide can be found at http://www.justice.gov/criminal/fraud/fcpa/guide.pdf or a hardcopy bound version may be purchased from the Government Printing Office.