FCPA
Corporations developing or expanding their global presence rely on our advice to navigate potential sensitive operations that could create exposure for their employees under U.S. law. We assist clients with FCPA compliance and provide advice regarding the scope, meaning, and application of the FCPA and other anti-corruption laws.
Recent enforcement cases highlight the increased interplay between the agencies charged with enforcing U.S. export controls and anti-corruption laws, and highlight the overlap in the different U.S. regimes governing international business transactions. We can assist your company navigate through this high risk area of the law.
Following is a summary of the assistance we provide:
- Regularly counsel companies on FCPA compliance
- Prepare legal opinions for companies on FCPA matters
- Conduct assessments of companies’ internal controls, develop risk management processes, and implement “best practice” compliance programs
- Proactively spot and investigate possible instances of illegal conduct
- Conduct due diligence on target or newly-acquired companies, international agents, joint venture partners, and other third parties across the globe
- Provide training for publicly-traded and privately-held companies and private equity firms
- Our multilingual ability permits us to provide training in different languages, including Spanish and French
- Prepare case studies for training programs
- Develop FCPA and anti-corruption compliance programs for entities in a variety of industries especially in the defense, energy, and construction sectors
CFIUS FAQs:
1. What is the FCPA?
The Foreign Corrupt Practices Act (“FCPA”) is a U.S. anti-corruption law originally enacted in 1977 to combat improper business practices involving corrupt payments to foreign officials and to restore confidence in the American marketplace. The FCPA generally prohibits the provision of corrupt payments, or bribes, to foreign officials to obtain business advantages. In addition to its anti-bribery provisions, the FCPA also contains accounting provisions that require publicly listed companies in the U.S. to keep accurate books and transaction records and maintain adequate internal accounting controls. Parties that violate the FCPA may be subject to an investigation and enforcement action by the U.S. Securities and Exchange Commission and the U.S. Department of Justice.
2. What is the UKBA?
The Bribery Act of 2010 is the main anti-corruption law in the U.K. that prohibits bribery in both the public and private sectors. The UKBA prohibits the payment of bribes to any person with the intent to influence that person to perform a representative function, business function, or function of a public nature improperly. Commercial organizations in the U.K. can also be held liable under the UKBA for failing to prevent bribes issued by their agents or other associated persons on behalf of the company. However, the UKBA provides an affirmative defense against charges for failure to prevent bribery for companies that can show they maintain adequate internal procedures and controls to monitor UKBA compliance and detect instances of corruption. Violations of the UKBA may be subject to investigation and prosecution by the U.K.’s Serious Fraud Office.
3. Who does the FCPA and UKBA apply to?
The scope of the FCPA covers the conduct of U.S. persons and entities that occurs anywhere in the world. Importantly, the FCPA also prohibits officers, directors, employees, and agents of a company from issuing corrupt payments to foreign officials when done so on behalf of the company. In addition, foreign parties may be held liable for FCPA violations when they commit acts prohibited under the FCPA within the territory of the United States. Similarly, the UKBA prohibits U.K. persons and entities from making or accepting bribes both within and outside of the U.K., and foreign parties may be held liable under the UKBA if they engage in prohibited conduct while within the country. Under the UKBA, U.K. companies may also be held responsible for their failure to prevent acts of bribery committed by their directors, officers, employees, agents, or other associated persons when the bribery payment is made with the intention to gain an advantage for the company.
4. What is prohibited by the anti-bribery provisions of the FCPA and UKBA?
The FCPA’s anti-bribery provisions prohibit any offer, payment, promise, or authorization to pay money or anything of value to any foreign official, political party, or candidate for public office, with the intention to influence any act or decision in order to obtain or retain business. Put differently, the FCPA’s anti-bribery provisions make it illegal to corruptly offer or provide anything of value to foreign officials with the intent to obtain or retain business. The UKBA’s provisions prohibit any offer, promise, or gift of a financial or other type of advantage to another person or foreign public official to obtain or retain business or gain another form of business advantage. The UKBA provisions are interpreted broadly to prohibit all forms of bribery that is intended to influence another person to improperly perform a relevant function to obtain an improper advantage.
5. Does the bribe actually need to be completed for a violation to occur?
No. A bribe payment need not be completed for an FCPA or UKBA violation to occur. Offering or promising to pay a bribe to another person, including a foreign public official, for the purposes of obtaining or retaining business without ever actually making the payment is sufficient to establish a violation. Similarly, there is no requirement under the FCPA or UKBA anti-bribery provisions that the bribe be successful, i.e., that the bribe payer actually receive an advantage in exchange for the bribe for a violation to occur.
6. Does the bribe recipient need to be known for a violation to occur?
No. Knowing the identity of the bribe recipient is not required for an FCPA violation to occur. The FCPA prohibits so-called “indirect bribes” made to any person while “knowing” that some or all of the payments will be used by the person, whether directly or indirectly, to bribe foreign officials or other prohibited recipients. Importantly, in this context, “knowing” includes willful blindness to the high probability of bribery. The FCPA’s anti-bribery provisions apply where a company has knowledge of a bribe made by an agent, distributor, or other intermediary on its behalf, even if the company does not know the identity of the bribe recipient or whether the bribe was successful.
7. What is a foreign public official?
Both the FCPA and UKBA prohibit the bribery of a foreign official when intended to help the Company obtain or retain business or supply some other form of business advantage. The definition of a foreign official under both Acts is interpreted broadly to include officers or employees of a foreign government at any level, department, or agency. As such, a foreign public official could be a foreign military official in charge of procurement contracts, employees of a government-owned enterprise, a regulatory official within a foreign government agency, a Customs agent or officer, or any other individual that is employed or acting on behalf of a foreign government.
8. Do the FCPA and UKBA prohibit the provision of all promotional gifts such as transportation, hospitality services, or meals to third parties?
No, under the FCPA an affirmative defense to the anti-bribery provisions may be invoked where “the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to – (A) the promotion, demonstration, or explanation of products or services; or (B) the execution or performance of a contract with a foreign government or agency thereof.” This “reasonable and bona fide expenditure” affirmative defense has been interpreted narrowly and should not be relied upon to avoid FCPA liability for providing foreign officials with lavish gifts or entertainment as a means of influencing their decision to obtain or retain business. “Reasonableness” is generally considered in light of the company’s ordinary course of business. Similarly, the UKBA does not criminalize “bona fide hospitality and promotional, or other business expenditure which seeks to improve the image of a commercial organization, better to present products and services, or establish cordial relations.” When an action is one that is long-recognized as an important part of doing business, it is less likely to be viewed as a bribe under the UKBA. However, surrounding circumstances, the level of expenditure, and a connection between the promotional action or gift and a business advantage are factors that will be considered when determining whether an action constitutes a bribe under the UKBA.
9. What should I do if I receive a demand to pay a bribe?
If you are presented with a demand for a bribe or other improper transaction, the offer must be unequivocally refused and you should consider reporting the incident to your company’s Legal Department.
10. What are the consequences for violations the FCPA or UKBA?
Violations of the FCPA can result in either civil or criminal penalties including the assessment of fines and disgorgement of unlawfully obtained funds. In addition, individuals may be subject to up to five years imprisonment for violations of the FCPA’s anti-bribery provisions and up to 20 years imprisonment for violation of the accounting provisions. Violations of the UKBA can result in unlimited fines for companies, as well as debarment from receipt of government contracts, and disgorgement of ill-gotten funds. For individuals, violations of the UKBA can result in a prison sentence of up to 10 years. Companies that discover violations of the FCPA or UKBA should immediately take action to address the violation internally and contact internal or external legal counsel for guidance on remediating the violation and possible voluntary disclosure to the relevant government authorities.
INSIGHTS
Noteworthy FCPA Enforcement Developments
The Department of Justice really wants violators of the Foreign Corrupt Practices Act (FCPA) to come forward: following a January 2023 revision of its Corporate Enforcement Policy that incentivized voluntary self-disclosure, the agency launched a DOJ whistleblower reward pilot program on March 24, 2024.
BIS to Industry: Please Disclose “Big Deal” Violations and Whistle Blow on Others for Credit
In a memorandum published by the Bureau of Industry and Security on April 18, 2023, the Office of Export Enforcement (OEE) announced that it wants to incentivize voluntary self-disclosures (VSDs) after a party uncovers “significant” possible violations of the Export Administration Regulations (EAR), the types of violations that reflect national security harm.
In its announcement today, OEE spelled out the types of benefits that industry or academia gets when deciding to file a VSD, which often include a substantial reduction in potential monetary liability. Today’s announcement comes after OEE’s announcement last year, shifting administrative enforcement policies that impacted the VSD process.
Empowered or Exposed?
DOJ’s new compliance certification requirement seeks to “empower” CCOs.
A new policy at the U.S. Department of Justice (“DOJ”) pertaining to Foreign Corrupt Practices Act (“FCPA”)/anti-corruption compliance has recently sent shockwaves through the corporate compliance community. The change was first previewed by Assistant Attorney General (“AAG”) for the DOJ’s Criminal Division Kenneth Polite in a speech delivered on March 22, 2022:
There’s A New Compliance Sheriff In Town, And She’s Cracking Down On Corporate Misconduct
The U.S. Department of Justice ("DOJ") is making it harder on companies that commit corporate crimes. A lot harder.
That’s the message that Deputy Attorney General Lisa Monaco recently gave attendees at the American Bar Association's White Collar Crime Conference in Miami. In her speech, DAG Monaco laid out the major changes to how the DOJ will approach corporate crimes and the individuals who commit them.
Department of Justice Monitorships: They’re Costly, They’re Disruptive, and They’re Making a Comeback
On October 28, 2021, Deputy Attorney General Lisa Monaco addressed the ABA’s National Institute on White Collar Crime, in which she made clear that monitorships are back on the menu as a means of ensuring corporate compliance. DAG Monaco stated that, “to the extent that prior Justice Department guidance suggested that monitorships are disfavored or are the exception,” she is rescinding that guidance, emphasizing “that the department is free to require the imposition of independent monitors whenever appropriate.”1
Knowledge of the monitorship process – what may lead to it and what it can mean for your organization – is crucial for general counsels and employees alike. This article intends to demystify these court appointments, providing an overview of Department of Justice2 Monitorships, when they are imposed, what they can entail and cost, and what they mean for both industry and counsel.