In a recent Opinion Procedure Release, the DOJ offered guidance regarding its FCPA enforcement policy in the context of “certain specified, prospective—not hypothetical—conduct.” The relevant conduct, according to the release, involves a U.S.-based limited partnership that is looking to pursue a natural resource infrastructure project in a foreign country.
The company retains a consultant who works for a U.S.-owned and -based partnership that holds contracts to represent the government of this foreign country in various U.S. matters. Perhaps most crucially, the consulting company has represented ministries of the foreign government that would be involved in the infrastructure project. The company plans to compensate the consultant with a signing bonus and a success fee (if applicable).
Given FCPA concerns, the company, among other things, prohibits the consulting company’s owner from lobbying on behalf of the foreign government; “walls off” the consultant from any lobbying activity; requires the consultant and the consulting company to disclose any contacts they have with the foreign government; requires that neither the consultant nor the consulting company has decision-making authority on behalf of the foreign government; discloses its arrangements to the relevant ministries; and requires the consultant to secure prior approval from the company prior to any material action.
In this context, the DOJ concluded that no enforcement action would be warranted as to the payments made by the company to the consultant. According to the DOJ, the FCPA “does not per se prohibit business relationships with, or payments to, foreign officials.” Rather, the DOJ noted, the crucial issues in a FCPA investigation are the transparency of the arrangement, whether local law is violated, and whether steps have been take to prevent a foreign official from improperly influencing a contract decision.
In an important caveat, the DOJ wrote that the consultant, as an agent of the foreign government, could, in some situations, be a “foreign official” for FCPA purposes. Given this, the DOJ offered no opinion as to “any other aspect of the proposed contract or any other prospective conduct involved in the Request.” However, the DOJ did note that “while the Consultant is not a foreign official for FCPA purposes under the limited facts and circumstances described by the Requestor, the proposed relationship increases the risk of potential FCPA violations.”