November 14, 2012

FCPA Guidance An Important Step Forward In An Ongoing Process

Today, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) released guidance on enforcement of the Foreign Corrupt Practices Act (FCPA).

We commend DOJ and the SEC for upholding their commitment to issue guidance this year under the FCPA and for hearing out the business community’s concerns. This is the first time the key enforcement agencies have produced a unified document outlining interpretations, rationales and overall guidance for compliance. As such, this document represents an important step forward in an ongoing process of providing much-needed clarity and certainty to the business community.

While it will take some time to fully digest the guidance, it addresses several areas of concern outlined by ILR and more than 30 trade and business associations earlier this year.  Particularly, the guidance includes helpful hypothetical scenarios, case studies, and policy statements covering de minimis thresholds, the meaning of an ‘instrumentality’ as a defined component of a foreign official, the mens reastandard for corporate criminal liability, and the extent of liability for successor companies.  It also includes a number of examples of cases the enforcement agencies have declined to pursue to date.

While guidance by definition can never provide the same certainty as an affirmative statute, we’re hopeful that this document will help companies seeking to comply with the law in good faith and prosecutors charged with enforcing it.  The business community will continue to engage with the DOJ and the SEC as they enforce the statute consistent with today’s guidance.

In February, ILR and more than 30 trade and business associations sent a letter to DOJ and the SEC that identified numerous critical areas that the FCPA guidance should address.  In April, ILR hosted a roundtable discussion with officials from DOJ and the SEC about the guidance on FCPA enforcement and the business community’s related concerns. 

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