Tag: FCPA Opinion Release

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.

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.