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Legal Update

US Enforcement Agencies Publish Long-Awaited Resource Guide to the U.S. Foreign Corrupt Practices Act

19 November 2012
Mayer Brown Legal Update

Just in time for the US Thanksgiving Day holiday, the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have jointly delivered the much anticipated Resource Guide to the U.S. Foreign Corrupt Practices Act (the Guide). Although the 120-page Guide has some tasty morsels here and there, many businesses will wish that there was more meat on these bones. 


The FCPA prohibits bribery of foreign public officials and requires the maintenance of accurate books and records and the development and maintenance of internal accounting control systems. It is directed toward issuers of US securities, companies organized under US law, US citizens, companies and individuals located in the United States, and, when certain jurisdictional elements are satisfied, non-US persons. Enforcement of the FCPA is the responsibility of both the SEC, which may enforce civil provisions of the statute, and the DOJ, which may enforce both the criminal and civil provisions of the statute.

Since 1977, when it was enacted, the FCPA has been amended twice—in 1988 and 1998—to broaden the authority of enforcement officials and to provide clarity with respect to key statutory terms. However, both the DOJ and the SEC have continued to be criticized for exploiting statutory ambiguities and for failing to offer administrative guidance.

Highlights of the Guide 

The Guide is notable both for what it says and for what it omits:

  • Disclaimer. The Guide declares that the guidance is non-binding, informal, summary in nature, and “does not in any way limit the enforcement intentions or litigating positions” of the DOJ or the SEC.
  • Anti-Bribery Provisions
    • Willfully. The meaning of “willfully,” the standard of intent under the FCPA, is “an act committed voluntarily and purposefully, and with a bad purpose.” The Guide defines “bad purpose” as the general knowledge that conduct is unlawful. The Guide also states that, while an individual must act willfully to be criminally liable, willfulness is not necessary to convict a corporation and that it is sufficient if a corporation have corrupt intent.  
    • Anything of Value. The Guide goes into detail about what constitutes a bribe. The FCPA “does apply broadly to bribes paid to help or retain business, which can include payments made to secure a wide variety of unfair business advantages.” However, companies will not be prosecuted just for dispensing “[i]tems of nominal value, such as cab fare, reasonable meals and entertainment expenses, or company promotional items.” The Guide further notes that “DOJ’s and SEC’s anti-bribery and enforcement actions have focused on small payments and gifts only when they comprise part of a systemic or long-standing course of conduct that evidences a scheme to corruptly pay foreign officials or obtain or retain business.”
    • Foreign Officials. The Guide explains in detail who qualifies as a foreign official, going through a list of factors and scenarios to explore whether an entity qualifies as an instrumentality of a foreign government, whose employees are thereby foreign officials. The Guide is careful to note, however, that “[c]ompanies and individuals should also remember that, whether an entity is an instrumentality of a foreign government or a private entity, commercial (i.e., private-to-private) bribery may still violate the FCPA’s accounting provisions, the Travel Act [18 U.S.C. § 1952], anti-money laundering laws, and other federal or foreign laws. Any type of corrupt payment thus carries a risk of prosecution.”
  • Accounting Provisions. The Guide addresses the affirmative obligation of US issuers to maintain internal controls: “Fundamentally, the design of a company’s internal controls must take into account the operational realities and risks attendant to the company’s business, such as: the nature of its products or services; how the products or services get to market; the nature of its work force; the degree of regulation; the extent of its government interaction; and the degree to which it has operations in countries with a high risk of corruption.”
  • Other Highlights. The Guide offers hypotheticals about gifts and expenditures for travel and entertainment, “practical tips” to reduce compliance risk in the context of mergers and acquisitions, and “guiding principles” of enforcement, including circumstances in which the DOJ declined to prosecute due to a violator’s strong compliance efforts.
  • Lost Opportunities. Those who were hoping that the SEC or the DOJ would disavow some of the more aggressive jurisdictional stances taken by the enforcement agencies in recent years will be disappointed. Nor does the Guide set out a structure of incentives for voluntary disclosure of FCPA violations so that businesses can compute how much credit they would receive against potential penalties if they choose to disclose violations. More generally, much of the Guide’s material is a compilation of FCPA interpretations that could be gleaned from a review of enforcement actions and official pronouncements over the years.

FCPA compliance after publication of the Guide, as before, must be grounded largely in careful risk assessments, measures tailored to a business’s structure and operations, and the vigilance and diligence of senior management and of compliance personnel. If the Guide breaks no new ground, it at least places in a single document the most complete statement yet of enforcement agencies’ perspectives on a law whose boundaries remain elusive. At its best, the Guide provides many real examples and hypotheticals that may make enforcement more predictable.

Businesses should use the Guide as an impetus for review of their own FCPA compliance programs, to ensure that the programs strike the right balance between the ideal and the practical and that they reflect the priority elements that the Guide describes. Furthermore, the business community should press the DOJ and the SEC to build on the Guide and to communicate perspectives on enforcement more frequently and systematically. If the Guide were to become a first step toward administrative transparency, and not the last, it would truly be an occasion for thanksgiving.

For more information about the Guide or about FCPA compliance, please contact , , or .


  • William Michael Jr.
    T +1 312 701 7653
  • Simeon M. Kriesberg
    T +1 202 263 3214
  • Vincent J. Connelly
    T +1 312 701 7912
  • Laura R. Hammargren
    T +1 312 701 8146

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