Today, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) jointly released long awaited guidance on the SEC’s and DOJ’s approach to FCPA enforcement. Entitled “A Resource Guide to the U.S. Foreign Corrupt Practices Act”, the 120 page Guide provides helpful information on the FCPA, and will become an essential reference tool for all companies doing business abroad. It is available on both the SEC and DOJ websites.
The Guide addresses a wide variety of topics, in significantly more detail than any prior undertaking. It includes basic information; such as who and what is covered by the FCPA (under both the bribery and accounting provisions), and information of interest to the most sophisticated readers, such as:
- The breadth of the definition of “foreign official,” including the SEC/DOJ view of what constitutes a department, agency or instrumentality of a foreign government;
- What constitutes improper gifts or travel and entertainment expenses;
- How successor liability applies in the mergers and acquisition context;
- Third party vetting processes and practices; and
- The hallmarks of an effective corporate compliance program.
The Guide uses a number of hypotheticals, as well as examples of actual enforcement actions and matters the SEC/DOJ have declined to pursue, giving important insights into how the SEC/DOJ would approach enforcement concerning certain aspects of the FCPA. More generally, the Guide includes a useful summation of SEC and DOJ considerations on the resolution of an FCPA matter, including cooperation credit and remedial approaches such as compliance monitors. The 418 footnotes to the Guide’s text include a wealth of applicable case law, and summaries of important settlements and DOJ Opinion Releases.
This new Guide, and the extensive collaborative efforts of the SEC and DOJ in producing it, reflect the importance that the government places on its FCPA enforcement efforts. It is a valuable resource, and should be carefully reviewed by all businesses active internationally, both large and small, with a view to enhancing their current anti-corruption compliance policies, practices and procedures.