On November 14, 2012, the Enforcement Division of the United States Securities and Exchange Commission and the Criminal Division of the United States Department of Justice announced the issuance of A Resource Guide to the U.S. Foreign Corrupt Practices Act. The 130 page guide addresses various topics that will be of interest to any company with activities outside the United States, including who and what is covered by the FCPA’s anti-bribery provisions; the definition of a “foreign official”; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments and a host of other topics as well. The SEC, in its press release, said that “the guide takes a multi-faceted approach toward setting forth the statute’s requirements and providing insights into SEC and DOJ enforcement practices.”
As previously noted by my colleagues Shawn M. Wright and James R. Billings-Kang in an article appearing in The National Law Journal, the DOJ and the SEC continue to be very active in enforcing the FCPA and as previously discussed in this blog, companies with operations outside the United States should consider their SEC disclosure obligations relating to the FCPA. As such, the guide is sure to be a great resource to both companies with international operations and the legal community advising them with respect to the FCPA. For additional resources relating to the FCPA, please visit our website.
The Foreign Corrupt Practices Act (FCPA) is back in the news. The Securities and Exchange Commission has a specialized unit established to enhance the SEC’s enforcement of the FCPA, and the SEC reports that it has brought more than 30 FCPA enforcement actions since the start of 2010. Moreover, as my colleagues Shawn M. Wright and James R. Billings-Kang recently wrote in The National Law Journal, the United States Department of Justice has over 150 open FCPA investigations and together the SEC and the DOJ netted approximately $1.8 billion in fines, penalties and disgorgement of profits in 2010 alone for FCPA violations.
Generally, the FCPA covers, among others, any company with securities registered under the Securities Exchange Act of 1934 and any company that is required to file reports under the Exchange Act or has its principal place of business in the United States. The anti-bribery provisions of the FCPA prohibit corrupt payments to foreign officials for the purpose of procuring or maintaining business. The FCPA is extremely broad in its scope and determining exactly what is prohibited by the FCPA can be very difficult. Because the FCPA makes illegal many payments that individuals working in countries other than the United States may consider ordinary or customary, it can be particularly difficult to put a stop to the sorts of payments that may be covered by the FCPA, even where a company has a robust training and compliance program.
If your company has significant operations outside the United States, especially where those operations are in countries where unofficial payments or gifts are a regular part of the business culture, a risk factor about your company’s FCPA exposure is likely to be warranted.