As we've discussed before, complying with the U.S. Foreign Corrupt Practices Act can be a major headache for U.S. businesses with large international practices. Given those headaches, it has come as welcome news to many that a new guide to the FCPA was released earlier this month. The guide, known as "A Resource Guide to the U.S. Foreign Corrupt Practices Act," pulls together information about the law that was previously scattered in a variety of places.
The FCPA imposes criminal and civil penalties on businesses for a variety of offenses including foreign bribery and inaccurate financial records. The new guidelines are meant to help companies avoid overstepping their bounds and thus avoid expensive fines associated with the Act.
The guide was drafted by officials with the Justice Department and Securities and Exchange Commission. It does not change the FCPA, doing so would take an act of Congress, and there is nothing legally binding about the guide either. Instead, it is intended to give insight into the mind of DOJ and SEC enforcement officials.
It's no easy read either, coming in at a whopping 120 pages. The guide addresses the definition of a foreign official, specifies examples of proper and improper gifts and lists some of the hallmarks of effective corporate compliance programs. The guide notes that the FCPA does not actually prohibit gift giving, just the payments of bribes that are disguised as gifts. The guide says that handing out promotional material including pens, hats and t-shirts is an appropriate way of showing your gratitude and marketing your company.
Experts say that one of the more valuable aspects of the guidance is that it provides hypothetical situations and case studies, without naming the companies involved. Hypothetical and real-life scenarios deal with such issues as gifts, travel and entertainment of foreign officials, areas of FCPA compliance with which some U.S. companies have struggled in the past. A few good examples contained in the good include the tip that it would be improper to give a $12,000 birthday trip to a government decision-maker or hand over a trip to Italy that includes $1,000 of pocket money.
The guide appears to be far from perfect, but it should serve as a valuable tool for companies looking to avoid an expensive fine by running afoul of U.S. laws. As more companies turn overseas for growth, the guide will likely only become more important.
U.S. Unveils FCPA Guidelines by Mike Scarcella, published at AmericanLawyer.com on November 15, 2012.
New FCPA Guidance Brings Welcome Insight to U.S. Businesses published at BusinessInsurance.com on November 25, 2012.
See Our Related Blog Posts:
The Foreign Corrupt Practices Act: High Cost of Corrupt Practices
Primer on the Foreign Corrupt Practices Act