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Department of Justice and Securities and Exchange Commission Issue Highly Anticipated Foreign Corrupt Practice Act Guidance

Written by: Paul E. Pelletier and Aaron M. Tidman

On November 14th, the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) jointly published “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (the “Guide”), their long-awaited and highly anticipated guidance on the Foreign Corrupt Practices Act (FCPA). Although the Guide is not revolutionary — the DOJ and SEC did not announce a new “adequate procedures” defense, as some predicted, or radically reinterpret any of the FCPA’s provisions — it does provide useful insights into the government’s enforcement considerations. The Guide dedicates several pages to describing the “Hallmarks of Effective Compliance Programs,” and it sheds light on how the government defines the scope of acceptable gifts, entertainment, and travel; the definition of a “foreign official” and “instrumentality”; successor liability in mergers and acquisitions; and the government’s jurisdiction to enforce the FCPA. The Guide illustrates each of these topics through helpful hints, examples, and hypotheticals.

The DOJ and SEC’s “industry sweeps” of medical device and pharmaceutical companies, financial services firms, energy companies, freight forwarders, and retail companies over the past several years demonstrate that the FCPA remains a top priority for government enforcement in the United States. The scope and meaning of many of the FCPA’s provisions have been rigorously debated over the years, and although the FCPA Guide does not end the debate — in fact, it is explicitly “non-binding” and, in some cases, adopts unsettled or untested law — it provides some clarity in several important areas, and should serve as a measuring stick for compliance officers to evaluate their own companies’ compliance programs. For more information on the Guide, please see our FCPA advisory, which provides insight on effective compliance programs, the scope of acceptable gifts, entertainment, and travel, the definition of “Foreign Official” and “Instrumentality” under the FCPA, successor liability, and the government’s jurisdiction to enforce the FCPA.

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Thomas R. Burton, III

Member / Chair, Energy & Sustainability Practice

Tom Burton has helped to shape the clean energy industry by drawing on his passion for innovation. As a Mintz attorney, Tom counsels investors, entrepreneurs, and Fortune 100 companies. He also guides start-up organizations and accelerators to foster the next generation of energy leaders.