November 16, 2012 - This morning at the ACI’s 28th National Conference on the FCPA in Washington, D.C., Assistant Attorney General Lanny A. Breuer remarked on the recently released Resource Guide to the U.S. Foreign Corrupt Practices Act (the "Resource Guide"). Authored jointly by the Criminal Division of the U.S. Department of Justice ("DOJ") and the Enforcement Division of the U.S. Securities and Exchange Commission ("SEC"), the Resource Guide was released on Wednesday. This is the first in a series of alerts in which we will examine key components of the Resource Guide in detail and provide context and guidance on the impact of the Resource Guide to our clients and friends.
The 120-page Resource Guide provides guidance on critical issues, including:
- Gifts, travel and entertainment;
- Using third parties;
- Charitable contributions;
- Parent-subsidiary liability for FCPA violations;
- Successor liability in the context of mergers and acquisitions;
- Hallmarks of an effective compliance program; and
- How DOJ and SEC resolve allegations made against issuers, private companies and individuals.
The Resource Guide also provides guidance on DOJ and SEC’s interpretation of core terms under the FCPA, including "anything of value," "foreign official," and "corruptly," and it describes DOJ’s expansive views of territorial jurisdiction under the FCPA.
The Resource Guide attempts to clarify many anti-corruption topics in detailed hypotheticals. Though the Resource Guide is not binding on DOJ or SEC, these hypotheticals provide valuable insight into the likely enforcement positions of the agencies. In addition to the hypotheticals, DOJ and SEC described cases in which the agencies declined to take an enforcement action against companies that voluntarily self-reported potential violations.
In remarks delivered this morning, Mr. Breuer said that the "Guide may be the most comprehensive effort ever undertaken by either the DOJ or the SEC to explain our approach to enforcement of a statute - any statute." In Breuer’s words: "The FCPA is now a reality that companies know they must live with and adjust to. . . . [N]ow is the time to redouble our anti-corruption efforts."
In response to a question from Bass, Berry & Sims Member Wallace Dietz regarding the possibility of amending the FCPA to include an affirmative defense based on a company’s compliance program (as advocated by the U.S. Chamber of Commerce), Mr. Breuer reiterated his opposition to such a defense: "I just don’t accept that we can have an absolute compliance defense. . . . I, for one, think that an absolute defense would be a bad idea." Nonetheless, Mr. Breuer continued, "if you have a compliance program and it’s working, you’re pretty far along."
After Mr. Breuer’s remarks, Mr. Dietz moderated a panel on the role of the board of directors in FCPA compliance. In Mr. Dietz’s words, "The new guidance doesn’t represent a fundamental change in the DOJ and SEC’s enforcement philosophies. However, it provides clear statements about their expectations - statements that can meaningfully inform the Board’s assessment of management’s compliance efforts."
The effort invested by DOJ and SEC demonstrates that enforcement of the FCPA will remain vigorous, and that their compliance expectations for companies and individuals will remain high.