Category: Foreign Corrupt Practices Act

FCPA Review Procedure Release 81-02 came from the Iowa Beef Packers, Inc. who wanted to send promotional samples to the Soviet Ministry of Foreign Trade, the Soviet government agency responsible for procurement of such products.

The total amount of the samples which the company intends to furnish to these officials is approximately 700 pounds of beef, with an estimated total value of less than $2,000. Individual sample packages will not exceed $250 in value. IBP estimates that prospective sales of packaged beef products to the Soviet government will be in minimum amounts of 40,000 pounds each.

The company has represented that the sample products to be presented to MVT officials are intended as items for their inspection, testing and sampling, and to make these officials aware of the quality of the company’s products. IBP also represents that the sample products are not intended for the individual use of the MVT officials, but will be provided to them in their capacity as representatives of the government agency responsible for purchasing the company’s products. Finally, the Soviet government has been informed that the company intends to furnish sample products to the MVT officials.

FCPA Opinion Procedure Release 93-01 came from a company planning to enter into a joint venture partnership agreement to supply management services to a business venture owned and operated by a quasi-commercial entity, which entity is wholly owned and supervised by the government of a former Eastern bloc country.

The requestor has represented that although the joint venture partnership or another entity owned by the United States partner in the first instance will pay the foreign directors’ fees, the fees ultimately will be reimbursed by the foreign partner either from the foreign partner’s share of the net profits from the partnership or from its other funds. Moreover, the United States partner will undertake to educate the foreign directors regarding the avoidance of possible FCPA violations in the conduct of the partnership’s business.

FCPA Opinion Procedure Release 93-02 came from a company which seeks to enter into a sales agreement with an entity in a foreign country. The entity is a government-owned business which holds a licence giving it the exclusive right to manufacture, sell, purchase, import, and export all defense equipment for that country’s armed forces. The law of that country requires the military to deal only through the government-owned business.

FCPA Opinion Procedure Release 94-01 came from a U.S. company and a foreign citizen. The American company seeks, through its subsidiary, to enter into a contract with a foreign national. The American company’s subsidiary is engaged in the manufacturing of products for use in clinical and hospital laboratories. Its manufacturing operations are located on real property which it acquired from a company that is a state-owned enterprise (the enterprise) now being transformed into a joint stock company.

The subsidiary wishes to enter into a contract with an individual who is the general director of the enterprise. The individual is a longtime resident of the area and has experience dealing with the local authorities and public utility service providers.

The American company’s foreign attorney has advised that under the nation’s law, the individual would not be regarded as either a government employee or a public official, the foreign attorney’s opinion is not dispositive, and we have considered the foreign individual to be a “foreign official’ under the statute.

FCPA Opinion Procedure Release 95-01 came from a U.S.-based energy company planning to acquire and operate a plant in a country in South Asia that lacks modern medical facilities in the region where the plant is located. A modern medical complex is presently under construction near the requestor’s future plant. Costs for the medical facility are projected to run to hundreds of millions of dollars. If the acquisition of the plant is completed, the requestor plans to donate $ 10 million in a public ceremony to the medical facility for construction and equipment costs.

FCPA Opinion Procedure Release 95-02 came from two U.S. companies planning to enter into transactions in a foreign country. One company has offset obligations. The other company generates offset credits through new subsidiary. The majority of investors in the new subsidiary will be foreign government officials.

Among other agreements with the investors/government officials:

The shareholders are passive investors in Newco and will exercise no management control in Newco while holding a government office.

The shareholders will recuse themselves from any government decision with respect to any matter affecting Newco or Company A; although a shareholder may hold a foreign government position, his official duties do not include responsibility for deciding or overseeing the award of business by that government to the parties to this request, and he will not seek to influence other foreign government officials whose duties include such responsibilities.

FCPA Opinion Procedure Release 96-01 came from a non-profit environmental group proposing to sponsor and provide funding for up to ten government representatives from regional nations to attend training courses in the United States.

The requestor would pay for round-trip air fare to a U.S. city, transportation by van to and from the airport, hotel accommodations, and lunch. All other expenses, including meals other than lunch, taxis, phone calls, etc., would not be covered.

FCPA Opinion Procedure Release 96-2 came from a U.S. company engaged in the manufacture and sale of equipment used in commercial and military aircraft. The requestor wants to renew a contract with a state-owned enterprise of a foreign country, to assist the requestor by using its manufacturing expertise and experience in the foreign country to identify those entities that might be in the market for the parts and services currently available from the requestor. The requestor would provide these parts and services directly to the ultimate purchasers with the Enterprise receiving a commission based upon a percentage of net sales.

FCPA Opinion Procedure Release 97-01 came from a U.S. company whose wholly owned subsidiary is submitting a bid to a foreign government-owned entity to sell and service certain high technology equipment. In connection with its bid, the requestor has entered into a Representative Agreement with a privately held company Representative in the same foreign country.

Subsequently, the requestor learned of an allegation that more than fifteen years ago the Representative, or a person associated with the Representative, was involved in an improper payment transaction with an official of the foreign government. The requestor undertook further due diligence, which included, among other things, the hiring of an international investigative firm to conduct an extensive investigation of the allegations, and interviews with principals of the Representative, the Commercial Counselor at the U.S. Embassy in the foreign country, a former U.S. ambassador to the foreign country, and other persons with extensive commercial and other experience in the foreign country. Although these additional inquiries failed to substantiate the alleged misconduct, they did reveal that a number of persons might have been motivated, for political reasons, to disparage the Representative or its associated person.