The U.S. Justice Department and the Securities and Exchange Commision on Wednesday released a long-awaited guidance on the Foreign Corrupt Practices Act
regulation that makes it illegal for certain individuals to make payments to foreign government officials to assist in obtaining or retaining business.
The 130-page guidance was unveiled a day before the American Conference Institute’s National Conference on the FCPA, which is being held today in Washington, and a year since Justice Department Assistant Attorney General Lanny Breuer said the business community would get it at last year’s conference.
The guidance is meant to be a desktop reference for businesses on how to handle the realities and hypotheticals of the regulation, which has in recent years ensnared several U.S. companies, but has been criticized among business advocates for being opaque and overly punitive.
“The guide addresses a wide variety of topics, including who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a ‘foreign official'; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context,” the Justice Department said in a release.
The guidance’s footnotes include checklists for companies to consider when making payments, such as charitable ones in a foreign country, as well as hypothetical violations.
“Broadly, the guidance recites positions long held by the government and avoids the firm policy pronouncements sought by the U.S. Chamber of Commerce and other critics of the law,” the Wall Street Journal wrote Wednesday
In an interview with the Journal
, Lisa Rickard, head of the U.S. Chamber’s Institute for Legal Reform, said the “guidance by definition can never provide the same certainty as an affirmative statute
. We’re hopeful that this document will help companies seeking to comply with the law in good faith and prosecutors charged with enforcing it.”
The general consensus among the legal community is that the guidance will be helpful in codifying an act that many businesses find opaque, but that defining a clearer structure on compliance and prosecution processes would have been more useful.
According to the law firm Venable’s FCPA and Anti-Corruption Practice Group, the number of FCPA enforcement actions
by the Justice Department and SEC in the first half of 2012 stayed flat compared to levels in the first half of 2011.
“The government's newly-released voluminous guidance seeks to provide a way forward for companies and their anti-bribery compliance efforts - responding to long-standing claims from industry that such commentary is warranted and should be practical," said Ashley Craig, a partner with Venable. "How practical the new guidance actually is remains uncertain and may vary by industry. All sectors should carefully review the DOJ/SEC's guidance and look to incorporate relevant aspects into their corporate governance protocol. There may be important lessons in this document - for some.”
discussed the FCPA impacts on shippers
during a July webinar with Pete Mento, director of global customs and trade policy at C.H. Robinson Worldwide. In October 2011, Darryl W. Jackson, a partner in the International Trade Practice Group of the law firm of Kelley, Drye & Warren, wrote about the widespread impacts of more aggressive enforcement of the act can have on the trade community
. - Eric Johnson