DOJ and SEC Publish Extensive Guidance on FCPA Compliance

On November 14, 2012, the United States Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) published written guidance on the Foreign Corrupt Practices Act (“FCPA”) called “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (“Guide”).  This guidance has been much anticipated since the Assistant Attorney General for the Criminal Division at the DOJ announced in November 2011 that the DOJ would release guidance to clarify the FCPA for businesses and contractors.  According to the DOJ and SEC, the goal for preparing the Guide was to “provide helpful information about the FCPA and our FCPA enforcement efforts to businesses that want to compete fairly in foreign markets, so that those businesses can maximize their ability to comply with the FCPA in the most effective and efficient way suitable to their business and the markets in which they operate.”

This 120-page Guide provides robust discussions and helpful examples and hypotheticals of critical FCPA issues, such as the definition of “foreign official”; facilitating payments; successor liability; permissible gifts, travel and entertainment expenses; and third-party due diligence.  Most significantly, the Guide offers contractors extensive guidance on how DOJ and SEC will exercise their prosecutorial discretion when investigating and prosecuting FCPA claims.  In particular, these agencies will look at a number of factors, including the extent the contractor has engaged in self-reporting, the duration of violations, whether the contractor has engaged in previous violations, the strength of the contractor’s compliance program, and whether the contractor has exercised appropriate due-diligence.  The agencies indicated that they will place a “high premium on self-reporting, along with cooperation and remedial efforts, in determining the appropriate resolution of FCPA matters.”

Although the Guide is not binding on the DOJ and SEC and does not contain any new substantive interpretations of the FCPA, it provides a critical introduction to the FCPA and FCPA compliance for new contractors and is a useful tool for existing contractors to review and improve their current compliance programs.

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Filed under Foreign Corrupt Practices Act (FCPA)

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