As markets expand and the world becomes smaller, the Foreign Corrupt Practices Act or FCPA has become increasingly relevant to companies. Initially intended to prevent the rampant bribery of foreign officials the SEC discovered in 1977,11 the FCPA now reaches a multitude of actions and requires diligent monitoring of operations and practices with and in foreign countries. Since 2005, FCPA enforcement actions brought by the SEC and the DOJ have increased by more than 600%.12 Fortunately, on November 14, 2012, the SEC and the DOJ provided guidance as to the application of and compliance with the FCPA with a Resource Guide to the US Foreign Corrupt Practices Act.13 The guide's main points of clarification relate to:
- The scope of the FCPA's anti-bribery and accounting provisions.
- What constitutes a foreign official.
- Proper and improper gifts and entertainment expenses.
- Parent and successor liability.
- The elements of an effective compliance program.
- Civil and criminal resolutions available.
- Procedures for obtaining DOJ opinions.
Importantly, the guide establishes that in order for conduct to trigger the FCPA it must 1) serve a business purpose, 2) be conducted with corrupt intent, 3) be a willful or voluntary act and 4) offer something of value to the public official. The guide contains several hypotheticals and examples to further elucidate the rules. The guide also discusses proper and improper gift and entertainment expenses when conducting business abroad and recommends the use of and provides tips for an effective corporate compliance policy. While not a change in SEC and DOJ interpretation of the FCPA, the guide provides a useful comprehensive repository of the agencies' current positions on and analysis of the FCPA as well as their viewpoint on enforcement.