Paul R. Berger, Bruce E. Yannett, Erin W. Sheehy, and Emily S. Pierce of Debevoise & Plimpton LLP wrote an article: Fair Warning: Ignorance Is No Excuse When it Comes to the FCPA (March 2008).
The article focused on some of the implications of Unites States V. Kay, 513 F.3d 432. [See Kay v. United States and Kay – Certiorari Denied]. The authors point out that one of the defendant defenses was that they did not have fair notice that bribes paid to reduce taxes and levies violated the FCPA.
The article also points out that there have been several prosecutions under the FCPA’s book and records requirement even when bribery could not be proven.
They also highlight the guidance from the DOJ about what are acceptable travel and entertainment expenses. They summarize FCPA Opinion Release 2007-01 and FCPA Opinion Release 2007-02 as providing these factors that made the proposed travel acceptable:
- the foreign officials making the trip were not selected by the company and had no direct authority over decisions relating to potential contracts or licenses necessary to operate in the foreign country;
- the expenses would be limited – no international airfare and economy class domestic airfare; no entertainment or leisure (although a “modest four-hour city sightseeing tour” was acceptable); no stipends; reimbursement for incidental expenses up to “a modest daily minimum, upon presentation of a written receipt”; no expenses for spouse, family or guests; and souvenirs limited to company-branded items of nominal value;
- the company would pay all incurred expenses directly to the service providers (not to the officials) and properly record such payments in its books and records; and
- the company received a written legal opinion that the trips did not violate the laws of the home country of the foreign official.
The authors point out that the best defense against FCPA is to have a robust compliance program in place that includes written policies, procedures, training and testing through internal audits.