The United States laid out guidance on its foreign anti-bribery law Wednesday, responding to a clamor from businesses for clarity on how to avoid violations in their global operations.
The long-awaited guide provides a detailed look at the US Foreign Corrupt Practices Act (FCPA), from defining who is a “foreign official” to distinguishing between a bribe and a legitimate gift or entertainment expense.
Issued by the Justice Department and the Securities and Exchange Commission (SEC), the 120-page guide details how violations are determined, what steps companies can take to ensure compliance, and how to vet corruption liability in mergers and acquisitions.
The Justice Department and the SEC underlined the guide was aimed at helping businesses and individuals comply with the law, with the result protecting consumers, investors and markets.
“When business is won or lost based on how much a company is willing to pay in bribes rather than on the quality of its products and services, law-abiding companies are placed at a competitive disadvantage — and consumers lose,” the guide says.
US companies have long complained that the 1973 law has put them at a disadvantage abroad, particularly in countries where bribery is a normal part of doing business.
Officials said the unprecedented guide was developed over the past year, in consultation with government officials, the US Chamber of Commerce, nongovernmental organizations and other groups, to explain the law.
“Our FCPA enforcement is critical to protecting the integrity of markets for American companies doing business abroad, and we will continue to make clear that bribing foreign officials is not an acceptable shortcut,” Lanny Breuer, assistant attorney general for the Justice Department’s criminal division, said in a statement.
“The guide is an important illustration of our transparency and a useful reference for companies and individuals who wish to act responsibly and in compliance with the law.”
The departments hoped the guide also would dispel myths about violations of the law.
“It would be hard to establish a criminal intent if you just bought someone a latte,” Breuer told reporters at a briefing.
But the case of a California-based telecommunications company, which spent nearly $7 million on trips for its customers between 2002-2007 in order to obtain contracts in China, illustrates the type of improper travel and entertainment expenses that may violate the law, according to the guide.
The prohibition on bribes or bribe offers to a “foreign official” covers any officer or employee of a foreign government and to those acting on the foreign government’s behalf, as well as employees and representatives of public international organizations, such as the World Bank, the International Monetary Fund and the OECD.
SEC Enforcement Director Robert Khuzami said he hoped that companies would understand the process of determining compliance through the guide, and use that knowledge to structure compliance departments to prevent violations.
“The real value of the guide is clarity,” he said.
The US Chamber of Commerce hailed the guide as “an important step forward in an ongoing process.”
“This is the first time the key enforcement agencies have produced a unified document outlining interpretations, rationales and overall guidance for compliance… providing much-needed clarity and certainty to the business community,” said the head of the chamber’s Institute for Legal Reform, Lisa Rickard.
US issues guidance on foreign anti-bribery law
