• DOJ and SEC Release Joint FCPA Guidelines
  • November 16, 2012 | Author: Jonathan Michael Anderson
  • Law Firm: Holland & Hart LLP - Denver Office
  • On November 14, 2012, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) issued long-anticipated guidelines to the U.S. Foreign Corrupt Practices Act (FCPA). A Resource Guide to the U.S. Foreign Corrupt Practice Act is a 120-page document summarizing DOJ and SEC's enforcement of the FCPA. DOJ also issued a Fact Sheet summarizing the Guide.

    The Guide did not announce major shifts in FCPA enforcement but did provide useful guidance for companies that conduct international business. The noteworthy sections for corporate counsel include:

    Nominal Gifts Do Not Create Liability - The Guide provides a practical explanation for how companies should analyze whether gifts, travel, entertainment and other things of value for foreign officials qualify as a bribe. The Guide highlights the fact that a gift requires corrupt intent to be illegal under the FCPA and such intent cannot be established if the gift is of nominal value. The Guide affirms that DOJ and SEC are unlikely to investigate gifts with nominal value, such as reasonable meals, company promotional items, and cab fare.

    Facilitation Payments Discouraged - The Guide reaffirms the largest exception within the FCPA, making clear that payments to further routine governmental action involving non-discretionary acts remain lawful. However, the Guide highlights the fact that such payments may be unlawful under other countries' laws. Most notably, the UK Anti-Bribery Act prohibits all facilitation payments. The Guide discourages facilitation payments and recommends that companies prohibit such payments.

    Self-Reporting and Cooperation- The Guide stresses companies to proactively self-report FCPA violations. The Guide notes that both DOJ and SEC place a "high premium on self-reporting, cooperation and remedial efforts, in determining the appropriate resolution of FCPA matters."

    Compliance Programs Are Critical- Most significantly, the Guide emphasizes the need for companies conducting international business to maintain an effective compliance program. The Guide makes clear that DOJ and SEC will examine whether a program exists, how it is designed, and whether it was implemented in an effective manner. The Guide sets forth nine "hallmarks of an effective compliance program":

    1. A commitment from senior management and a clearly articulated policy against corruption;
    2. A code of conduct and policies and procedures that are accessible to all employees (i.e., translated into local languages as necessary);
    3. Oversight, autonomy and adequate resources for the compliance team;
    4. Risk assessments;
    5. Training;
    6. Incentives and disciplinary measures;
    7. Third party due diligence procedures;
    8. Confidential reporting mechanisms and internal investigation resources; and
    9. An accountability function such as periodic audits or reviews.

    The Guide calls special attention to the fact that an effective compliance program can minimize or eliminate corporate liability for FCPA violations. The Guide highlights a recent DOJ decision not to pursue an enforcement action against a company that had an effective compliance program in place, instead prosecuting the individual employee who violated the FCPA.


    While the Guide does not announce a major shift in FCPA enforcement, DOJ and SEC highlight the importance of maintaining an effective anti-corruption program. Corporate counsel should review their existing compliance program to ensure it meets the enforcement expectations set forth in the Guide. Holland & Hart's International Trade Compliance Program, which integrates export U.S. trade controls and anti-corruption compliance into a single streamlined program, exceeds the standards set forth in the Guide and automatically captures "defensive data" that demonstrates corporate compliance.