In November 2012, the SEC and DOJ released a joint Resource Guide to the US Foreign Corrupt Practice Act (FCPA) to much fanfare. While some FCPA practitioners found the Guide “underwhelming,” others considered it a “thoughtful attempt to . . . provide clarity and practical guidance to the business community.”
When it was released in 2012, I quickly printed a copy of the Guide, which I frequently turn to as the first step whenever questions regarding enforcement arise. Now highlighted and dog-eared, my copy of the Guide is a testament to how consistently it has been used.
Imagine my surprise, then, to read a few pages of the Guide online and to notice some subtle changes from my printed 2012 version. Although unannounced, it appears that the regulators have updated the Guide since its initial release.
Upon review, the changes occur in two sections: First, the section on the Accounting Provisions for Issuers, Subsidiaries, and Affiliates (on page 43) in the 2015 Guide differs from the 2012 Guide in three distinct ways:
- In referencing an issuer’s responsibility for the books and records of its affiliates, the Guide quietly dropped the responsibility for “joint venture partners” from its list. The Guide now limits the requirement to “joint ventures” under an issuer’s control.
- The Guide previously defined a “minority-owned subsidiary or affiliate” as a company where the parent owns “less than 50%.” That line now reads “50% or less of a subsidiary or affiliate.”
- The Guide changed its standard for appropriate oversight over minority-owned subsidiaries from “best efforts” to “good faith efforts.”
(The latter two of these three changes modify the Guide to correspond to the language in the amendments to the FCPA that Congress enacted in 1988, including the addition of the “good faith” exception.)
Second, the section on Criminal Penalties for the anti-bribery provisions includes a few adjustments (on page 68):
- The 2012 version stated that individuals are subject to a fine of up to $100,000, but the 2015 version ups the ante to $250,000, likely a correction to an inadvertent error: while the FCPA itself limits individual penalties to $100,000, 18 U.S.C. §3571 sets out the higher penalty.
- The 2015 Guide modifies how to determine a penalty when looking at pecuniary gain: the 2012 Guide would have us calculate “up to twice the benefit that the defendant sought to obtain by making the corrupt payment” (emphasis added), whereas the 2015 Guide limits this to only “up to twice the benefit the defendant obtained.”
These changes may not add up to much – after all, the Guide is non-binding, and much of the FCPA remains untested in courts. But knowing the SEC and DOJ’s current views on enforcement and being able to use their language when talking about the FCPA can be an advantage. At the very least, let’s all agree to print out a new copy.