In June 2015, the Department of Justice and the Securities and Exchange Commission (SEC) published revisions to their jointly issued A Resource Guide to the U.S. Foreign Corrupt Practices Act. The Resource Guide, initially published in November 2012, offers helpful information to companies that transact business in foreign countries and that want to better understand the FCPA’s application to various situations. The Resource Guide, for example, provides in-depth discussions on permissible gifts and payments under the FCPA, the definition of “foreign official,” and other important guidance. Although not legally binding, the Resource Guide contains practical guidance that can help companies operating abroad mitigate FCPA risk.
The June 2015 revisions provide additional guidance on the FCPA’s application and scope. The changes, summarized below, appear aimed at improving clarity and harmonizing the guidance with relevant statutory provisions.
Chapter 3 Revisions (See p. 43)
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The Resource Guide has been amended to reflect that an issuer’s responsibility for the books and records of affiliates extends to an issuer’s “joint ventures.” Previously this language was specific to “joint venture partners.”
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In describing the steps that a company should take to ensure that minority-owned subsidiaries or affiliates devise and maintain a system of internal accounting controls, the Resource Guide now states that a company should use “good faith efforts” rather than its “best efforts.” The revised language is consistent with terminology used in the Exchange Act. See 15 U.S.C. § 78m(b)(6) (“Where an issuer … holds 50 per centum or less of the voting power with respect to a domestic or foreign firm, … the issuer [must] proceed in good faith to use its influence, to the extent reasonable under the issuer’s circumstances, to cause such domestic or foreign firm to devise and maintain a system of internal accounting controls.”).
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The definition of a minority-owned subsidiary has been revised to reflect that a company is a minority-owned subsidiary or affiliate if a parent company “owns 50% or less of a subsidiary or affiliate” as opposed to “less than 50% of a subsidiary or affiliate,” as stated in the original version. This change more closely tracks the language of the Exchange Act, which applies the good-faith efforts requirement to issuers who “hold[] 50 per centum or less of the voting power with respect to a domestic or foreign firm.”
Chapter 6 Revisions (See p. 68)
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The Resource Guide has been revised to reflect that the actual maximum fine for a violation of the anti-bribery provision is $250,000. Although the FCPA fine is limited to $100,000 per violation, an individual can be fined $250,000 under the Alternative Fines Act.
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The revised Resource Guide notes that, under the Alternative Fines Act, a court may impose a fine of up to twice the benefit that the “defendant obtained by making the corrupt payment.” The prior version said that the fine could be imposed up to twice the benefit that the “defendant sought to obtain by making the corrupt payment.”
View the revised Resource Guide and Alston & Bird’s guidance on the original Resource Guide for additional information.
