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February 21, 2012 

Business Groups Send FCPA "Wish List" to DOJ and SEC

Today the U.S. Chamber of Commerce and a number of other leading business and professional groups sent a letter (see below for full text) to senior officials at the Justice Department (DOJ) and Securities Exchange Commission (SEC) containing their "wish list" of items that they would like to see in the FCPA guidance that is supposed to be issued later this year.

The letter requests DOJ and SEC to address the following issues in any future FCPA-related guidance:

1. Definitions of “Foreign Official” and “Instrumentality” of a Foreign Government – Requests further clarification of those terms in the FCPA context, including the percentage ownership or level of control by a foreign government that ordinarily will qualify a corporation as an “instrumentality” of a foreign government.

2. Consideration of Compliance Programs in Enforcement Decisions – Guidance is requested on what types of things should be included in an effective FCPA compliance program that would receive favorable consideration in enforcement decisions.  The letter also requests guidance on the impact that voluntary disclosures have on enforcement decisions.

3. Clarification on parent-subsidiary liability in FCPA enforcement actions – The letter notes that the FCPA is not clear on whether a parent company can be held liable for a foreign subsidiary’s FCPA violation and the SEC and DOJ have taken different positions on this. Thus, the guidance requests DOJ and SEC to clarify and confirm that they consider parent company liability under the FCPA’s anti-bribery provisions to extend only to circumstances in which the parent actually authorized, directed or controlled the improper activity of its subsidiary.

4. Successor Liability – FCPA guidance should outline reasonable standards for conducting FCPA acquisition due diligence and identify factors that will be considered in determining whether such due diligence was adequate.

5. De Minimis Gifts and Hospitality – The guidance should identify a clear standard for gifts and hospitality that ordinarily will not be subject to enforcement action and to address common scenarios that arise in the course of business interactions with foreign officials. U.S. companies spend a great deal of time and effort on these types of issues and specific guidance would be extremely helpful. However, some senior DOJ officials have indicated that they do not think that bright lines or specific values will be useful as it could be misused or misinterpreted and they would prefer the status quo. 

6. Knowledge Standard for Corporate Criminal Liability – Because the FCPA does not explicitly address the “willful knowledge” standard required for corporate criminal liability, the letter requests DOJ to clarify its position on that standard and state its views on whether a company may be criminally sanctioned for FCPA bribery violations of which the company had no direct knowledge.

7. Declination Decisions – The letter requests DOJ to reconsider its practice of not providing information about its decisions to close FCPA-related investigations with no enforcement action. However, senior DOJ officials have expressed reservations about making declination decisions public.

8. Other Common FCPA Issues – The letter requests DOJ and SEC to issue guidance on the following FCPA issues:
  • The guidance should outline recommended “best practices” and examples of prophylactic measures that would be expected by DOJ and SEC with regard to business relationships with relatives of foreign officials.
  • What standards should govern corporate donations to charities that have connections with foreign governments?
The letter closes by requesting the guidance to apply to civil and criminal enforcement cases and should carry sufficient precedential weight to be reliable and meaningful for businesses seeking to comply with the FCPA.

Neither the DOJ nor SEC have indicated when their FCPA guidance will be issued.
FCPA Guidance Request Letter 02-21-2012



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