Compliance Building

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.

FCPA Opinion Procedure Release 1997-02 came from a U.S. utility constructing a plant in Asia. The requestor plans to donate $100,000 to a proposed school construction project. The donation would be made directly to the government entity responsible for the construction and supply of the proposed elementary school.

As the requestor’s donation will be made directly to a government entity — and not to any foreign government official — the provisions of the FCPA do not appear to apply to this prospective transaction.

FCPA Opinion Procedure Release 1998-2 came from a U.S. company submitting a bid to a foreign government-owned entity to sell and service a certain military training program. In connection with its bid, the Requestor intends to enter into several agreements with a privately-held company in the same foreign country. These agreements include a Settlement Agreement and Release, an International Consultant Agreement and a Teaming Agreement.

Requestor acquired an entity which had an International Representation Agreement with Representative. Pursuant to this agreement, Representative performed certain marketing and consulting services. Prior to executing the agreement, Requestor’s predecessor had performed a due diligence review of Representative’s qualifications and obtained certifications that neither Representative nor its principals were government officials nor did any government official have an ownership interest in Representative. The Representation Agreement also stated that no payments were made or would be made to government officials or members of a political party. Requestor subsequently determined that the Representation Agreement was invalid under local law and policy.

FCPA Opinion Procedure Release 2000 – 01 came from a U.S. law firm and a foreign partner of Requestor, (1) who has been appointed to a high-ranking position in the government of a foreign country. The Foreign Government Official has taken a leave of absence from the law firm who proposes to make some payments and provide the following benefits to the Foreign Government Official while he serves as a foreign public official.

FCPA Opinion Procedure Release 2001-01 came from a U.S. company planning to enter into a 50/50 joint venture with a French company. Some fo the contracts to be contributed by the French company predate the French Law No. 2000-595 Against Corrupt Practices.

The French company represented to the Requestor that none of the contracts and transactions to be contributed by the French company were procured in violation of applicable anti-bribery or other laws. The Requestor has not represented any facts which would indicate that the French company’s representation is, or may be, false.

The DOJ stated it was not intending to take any enforcement action, but with an important caveat:

The Department specifically notes that the French company’s representation is not limited to violations of the FLAC, and, for that reason, interprets the French company’s representation to mean that the contracts were obtained without violation of either French law or the anti-bribery laws of all of the jurisdictions of the various government officials with the ability to have influenced the decisions of their government to enter into the contracts to be contributed by the French company to the joint venture. Should, however, the French company’s representation in fact be limited to violation of then-applicable French law, the Requestor, as an American company, may face liability under the FCPA if it or the joint venture knowingly take any act in furtherance of a payment to a foreign official with respect to previously existing contracts irrespective of whether the agreement to make such payments was lawful under French law when the contract was entered into.

FCPA Opinion Procedure Release 01-02 came from a joint venture between a U.S. company and a foregin company looking to engage in a business relationship with foreign company’s government.

The requestors, as well as the chairman of the foreign company himself, signed the FCPA opinion request and represented, among other things, that:

1. The foreign company’s chairman’s government duties do not involve him acting in any official capacity concerning the award of the relevant business project. According to a legal opinion of counsel from the foreign country, submitted by the requestors, the tender for the business project was issued by ministries or agencies that are not under the charge of the foreign company’s chairman in his official government duties.
2. The foreign company’s chairman will not initiate or attend any meetings with his country’s government officials on behalf of the Consortium. His country’s law prohibits it.
3. The foreign company’s chairman will recuse himself and will not participate in his official capacity in any discussion or consideration of or decision about the award of the business project, which could be construed as promoting in any matter the activities and business of the Consortium, or any other interest or business of any company affiliated with a Consortium member. The Consortium’s bid submissions have informed the relevant foreign government ministries, agencies, and officials of the foreign company’s chairman’s relationship with the Consortium and of his recusal on any matters relating to the business project that are brought before those ministries, agencies, and officials. Future Consortium bid submissions will do the same.
4. The foreign company’s chairman’s position as a senior official in public education cannot affect or influence his government’s process of reviewing the Consortium’s bid and grants him no influence over the business project.
5. According to the requestors, the foreign company’s chairman, and the legal opinion of the requestors’ foreign counsel, the Consortium’s formation and contemplated activities do not violate the laws of the foreign country, despite the foreign company’s chairman’s position in the government and as a senior official in public education.
6. The Consortium agreement will provide that each member acknowledges its awareness and understanding of the applicability of the FCPA to the Consortium’s bid on, and possible execution of, the business project, and each party will agree not to violate the FCPA. Any failure by a Consortium member to comply with this provision of the agreement automatically grants the non-breaching member the right to terminate the Consortium agreement.