Tag: FCPA Opinion Release

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.

FCPA Opinion Procedure Release 01-03 came from company that, with the assistance of a foreign dealer, submitted a bid to a foreign government for the sale of equipment to the government. The dealer made comments that implied thast dealer would make payments to a government officials for the bid to be accepted.

After investigation by the company, they found no truth behind the comments.

FCPA Opinion Procedure Release 03-01 came from a U.S. company looking to purchase another company and its foreign subsidiaries. In the diligence process the requestor found FCPA violations and reported them to the DOJ and SEC. The requestor wanted to stop liability for the past FCPA violations of the target.

FCPA Opinion Procedure Release 04-01 came from a U.S. law firm proposing to sponsor, in conjunction with a ministry of the People’s Republic of China, a Comparative Law Seminar on Labor and Employment Law in the People’s Republic of China and the United States of America, to be held in Beijing, China. The stated purpose of the seminar is to educate legal and human resources professionals from the PRC and the United States about labor and employment laws and their practical applications in the PRC and the U.S. to facilitate understanding, compliance, and development of the laws of both jurisdictions.

The requestor would pay for the following costs of the seminar: conference rooms; interpreter services; receptions and meals during the seminar; transportation costs for Chinese government officials who do not live in Beijing to travel to the seminar; hotel accommodation for Chinese government officials participating in the seminar; and translation and printing of seminar materials.

The requestor has represented, among other things, that:

1. it has no business before the entities that may send officials to the seminar;
2. it is unaware of any pending or anticipated business between the clients who will be invited to the seminar and the Chinese officials who will attend;
3. it has obtained written assurance, a copy of which has been provided to the Department of Justice, from the Deputy Director of the Department of Legal Affairs for the Ministry that the requestor’s sponsorship of the seminar and its payment of the expenses described in the request violate no law of the PRC;
4. it is not selecting the particular officials who will be invited to the seminar; rather, the Ministry will select who will participate in the seminar;
5. it intends to pay all costs directly to the providers or reimburse costs incurred only upon presentation of a receipt;
6. it will not advance funds or pay reimbursements in cash;
7. it will not provide any free “gifts”; or “tokens”; to attendees or presenters, including Ministry personnel; and
8. other than the costs specified in the request, the requestor will not compensate the Ministry or any other Chinese government official for their participation in the seminar.

FCPA Opinion Procedure Release 04-02 came from an investor group of JPMorgan Partners Global Fund, Candover 2001 Fund, 3i Investments plc, who were acquiring certain companies and assets from ABB Ltd.  relating to ABB’s upstream oil, gas, and petrochemical businesses. On July 6, 2004, the DOJ announced guilty pleas to violations of the Foreign Corrupt Practices Act [“FCPA”] entered in the United States District Court for the Southern District of Texas by ABB Vetco Gray, Inc. and ABB Vetco Gray (UK) Ltd., two of the entities being acquired by the Requestors.

These guilty pleas came after the Requestor’s diligence on ABB and discovery of the FCPA issues.

This Release was to prevent future liability of the requestor for the prior violations of ABB.

FCPA Opinion Procedure Release 04-03 came from a U.S. law firm proposing to sponsor a trip to the United States by twelve officials of a ministry of the People’s Republic of China to provide the Ministry officials an opportunity to meet primarily with U.S. public-sector officials to discuss (1) U.S. regulation of employment issues, labor unions, and workforce safety; and (2) the institutions and procedures through which legal conflicts in the workplace are resolved.

The requestor intends to pay the travel, lodging, meals, and insurance for the twelve officials and one translator.

The requestor has represented, among other things, that:

1. it has no business before the entities that may send officials on the visit;
2. it has obtained written assurance, a copy of which has been provided to the Department of Justice, from the Deputy Director of the Department of Legal Affairs of the Ministry that the requestor’s sponsorship of the visit and its payment of the expenses described in the request violate no law of the PRC;
3. it is not selecting the particular officials who will be invited; rather, the Ministry will select who will participate in the visit;
4. it will host only officials working for the Ministry, related government agencies, and necessary interpreters;
5. it intends to pay all costs directly to the providers; no funds would be paid directly to the Ministry or other government officials;
6. it will not pay any expenses for spouses, family, or other guests of the officials; and
7. apart from meals and receptions connected to meetings or speakers or the events it is planning for the officials, it will not fund, organize, or host any entertainment or leisure activities for the officials, nor will it provide the officials with any stipend or spending money.

FCPA Opinion Procedure Release 04-04 was requested by a U.S. company proposing to fund a study tour of foreign officials who are members of a committee drafting a new law on mutual insurance, an industry in which the Requestor conducts business.

In its request, the Requestor made the following representations:

1. It has no business in the foreign country or with the foreign government, except for certain reinsurance contracts purchased in the global market and a Representative Office;
2. It is not aware of any pending or anticipated business in the foreign country or with the foreign government;
3. It is not selecting the particular officials who will travel, which decision is solely being made by the foreign government;
4. It intends to pay all costs directly to providers or to reimburse costs only upon presentation of a receipt;
5. It will not provide any gifts or tokens to the officials; and
6. Other than the expenses identified in the request, it will not compensate the foreign government or the government officials for their participation in the Study Tour.

FCPA Opinion Procedure Release 06-01 comes from a company wanting to contribute money to a regional customs department or the Ministry of Finance in an African country as part of a pilot project to improve local enforcement of anti-counterfeiting laws. The Requestor seeks to make the monetary contribution to the Counterparty in order for the agency to fund incentive awards to local customs officials to improve local enforcement relating to seizures of counterfeit products bearing the trademarks of the Requestor and its competitors.

The requestor planned to put these safeguards in place:

• First, the Requestor will make its contribution to the incentive compensation fund by electronic transfer to an official government bank account in the African country controlled by and in the name of the Counterparty, and will require written confirmation that the account is a valid government account, subject to periodic internal audit by the relevant government authorities.
• Second, the Requestor will be notified, upon a seizure of suspected counterfeit items by local customs officials, and will examine the suspect goods to confirm they are in fact counterfeit.  The Requestor further represents that payments to Award Candidates will not be distributed unless and until destruction of the counterfeit goods is confirmed by delivery of a destruction certificate to the Counterparty (a copy of which would be sent to the Requestor).
• Third, the Requestor will have no part in choosing the Award Candidates, and the Counterparty will have sole control over, and full responsibility for, the appropriate distribution of funds.  The Requestor, however, will require written evidence that its entire contribution was used only to pay identified Award Candidates and that the awards were based upon a predetermined award eligibility criteria and calculation method.
• Fourth, the Requestor will monitor the efficacy of the incentive program and discuss with the Counterparty during periodic reviews whether changes or refinements are necessary.  As part of its monitoring effort, the Requestor will monitor the number of notices received from local Customs officials relating to relevant seizures during each six-month period and follow the progression of such seizures.
• Fifth, the Requestor will require as part of its MOU with the Counterparty that the Counterparty will retain for five years the records of the distribution and receipt of funds, and shall permit inspection of such records by the Requestor upon request during the life of the pilot project and for three years thereafter.