Government Issues New FCPA Guidance: $12,000 Birthday Party Not the Way to Go
Employers concerned about their organizations’ FCPA compliance have a new, free resource available to them. Recently, the DOJ and the SEC published a long-awaited FCPA guidance for employers. The comprehensive guidance consists of cases, hypotheticals, interpretations, and explanations, and is designed to guide employers in designing and testing their FCPA compliance programs. The DOJ and SEC also issued a fact sheet in connection with the guidance, providing a brief overview of the types of resources available to employers in the guidance.One of the more extensive topics of discussion in the newly-issued FCPA guidance is the provision of gifts, travel, and entertainment. The guidance lists several examples of improper travel and entertainment gifts, including “a $12,000 birthday trip for a government decision-maker from Mexico” and “a trip to Paris for a government official and his wife that consisted primarily of touring activities via a chauffer-driven vehicle.” Companies that operate internationally should carefully review these examples and guidelines with their international sales employees to ensure that they are not running afoul of the FCPA and that proper internal recordkeeping and controls are being maintained.
Employers should keep in mind that an employee’s failure to comply with FCPA requirements can have drastic ramifications for his or her employer. For example, in 2011, a large U.S. company settled for $70 million civil and criminal bribery charges brought against it by the SEC for alleged FCPA violations. The charges brought against the company included allegations that employees of certain company subsidiaries routinely had paid bribes to public doctors and officials in Greece, Poland, Romania, and Iraq in order to induce those officials to direct contracts and purchases to the company. While the $70 million settlement may be an extreme and obvious example, it serves as a useful reminder that employers need to carefully design and monitor their companies’ FCPA compliance. The recently-published guidance will assist ideally in those efforts.