This week I am launching a new series from The Compliance Podcast Network, The Opinion Release Papers where I take a look at all the Opinion Releases (Releases) issued by the Department of Justice (DOJ) under the Foreign Corrupt Practice Act’s (FCPA) Opinion Procedure Release. These Releases are a wealth of information for the compliance professional and are not considered often enough in compliance practice.
In a July 2018 speech, at the American Conference Institute – 9th Global Forum on Anti-Corruption Compliance in High Risk Markets, Deputy Assistant Attorney General Matthew S. Miner stated, “On the Fraud Section’s FCPA website, we currently post Opinion Procedure Releases going back to 1993. But not enough companies are taking advantage of this process. I’ve recently reviewed the list, and the most recent incident of use is from 2014. That shouldn’t be the case. But for purposes of today, that release is illustrative of the value of engaging in the opinion process… In our view, the opinion process is a tremendous resource and we want to encourage greater use of it going forward.”
The 2012 FCPA Guidance (Guidance) stated, “DOJ’s opinion procedure is a valuable mechanism for companies and individuals to determine whether proposed conduct would be prosecuted by DOJ under the FCPA. Generally speaking, under the opinion procedure process, parties submit information to DOJ, after which DOJ issues an opinion about whether the proposed conduct falls within its enforcement policy. All of DOJ’s prior opinions are available online.” The Opinion Release Procedure only relates to the anti-bribery provisions and there is no equivalent for Securities and Exchange Commission (SEC) mandated issues. The Guidance lists five steps a company should follow if they are interested in “obtaining such an opinion”.
First, your question must be grounded in real facts and not a hypothetical question. The Guidance stated, “DOJ will not consider a request unless that portion of the transaction for which an opinion is sought involves only prospective conduct, although the transaction as a whole may have components that already have occurred.” This means you will have to ‘open the kimono’ on real events based upon the facts on the ground.
Second, each Opinion Release turns on its own facts. How many times have you heard a representative of the DOJ make that statement at a conference or other public event? The reality is that this is true and, in the context of FCPA, both regulators look at the facts and circumstances around each case in making a wide range of assessments, including the Opinion Procedure Release. While this is frustrating to business types, as a lawyer I find it to be not only an appropriate analysis but also an accurate way in which to look at things. Closely tied to this is that the Opinion Procedure Release response to a request only applies to the party that makes the request. The Guidance states, “If the transaction involves more than one issuer or domestic concern, consider making a request for an opinion jointly, as opinions only apply to the parties that request them.”
Third, (and near and dear to my heart) documents, documents, documents. The Guidance notes, “those seeking an opinion must put their request In writing. The request must be specific and accompanied by all relevant and material information bearing on the conduct and circumstances for which an opinion is requested. Material information includes background information, complete copies of all operative documents, and detailed statements of all collateral or oral understandings, if any. Those seeking opinions are under an affirmative obligation to make full and true disclosures.” This means not only full disclosure but no hiding of documents or other information from the DOJ. This information will not be made public and supplemental information can be submitted and provided. The DOJ may also request additional documentation.
Four and five are more administrative issues. Four requires that the request must be signed and “the signatory should be an appropriate senior officer with operational responsibility for the conduct that is the subject of the request and who has been designated by the corporation’s chief executive officer.” It goes on to state, “In appropriate cases, DOJ also may require the chief executive officer to sign the request. Those signing the request must certify that it contains a true, correct, and complete disclosure with respect to the proposed conduct and the circumstances of the conduct.” Five directs the physical mailing address and email address to which the requests should be sent or submitted.
The Guidance notes the DOJ would strive to reply within 30 days of the request. It could also ask for additional information which would trigger another 30 days. For some of the Releases that will be discussed in The Opinion Release Paperspodcast series, these time frames will be a part of the narrative and discussion. The DOJ’s FCPA opinions on the Opinion Procedure Release requests will “state whether, for purposes of DOJ’s present enforcement policy, the prospective conduct would violate either the issuer or domestic concern anti-bribery provisions of the FCPA.” Additionally, the “DOJ also may take other positions in the opinion as it considers appropriate.” Further, and perhaps most significantly, “To the extent that the opinion concludes that the proposed conduct would not violate the FCPA, a rebuttable presumption is created that the requestor’s conduct that was the basis of the opinion is in compliance with the FCPA.” Finally, all formal responses to Opinion Procedure Release requests are listed on the DOJ Fraud Section Website.
My work to research, create and produce this new podcast series, The Opinion Release Papers, was an excellent review for me on many issues. One of the primary jobs of a lawyer is to take precedent from case law and apply them to the facts of a specific situation. In the FCPA arena there is a dearth of case law precedent. This leaves quite a bit of room for what I call “creative-lawyering.” For instance in Opinion Release 12-01 it is not clear if the lawyers representing the Requestor or DOJ lawyers came up with a new analysis of who is a foreign government official under the FCPA. Yet kudos is due for coming up with a new legal argument to make by combining both the status analysis and the duties analysis.
Equally important to the novel argument made, is the use of the Opinion Procedure Release itself. A lawyer faced with what I would have termed an intractable problem with some creativity in the legal argument and the use of the Opinion Procedure Release, can obtain a way forward for his or her client, which accomplishes both its business goals and the goals of doing business in compliance with the FCPA.
This Opinion Release is also significant as it demonstrated the evolving nature of not only best practices under the FCPA but also the DOJ’s thinking on the subject. I think that the DOJ has underlined again the fact intensive nature of the analysis required under the FCPA and how companies, if they used a reasoned approach for a specific FCPA issue or problem, can go a long way towards protecting themselves from potential FCPA liability or exposure.
You can check out my new podcast seriesThe Opinion Release Papers via the following platforms: YouTube, where the first five episodes are available now; or if you prefer to download and binge listen, the episodes will be available Monday, October 8 at noon on iTunes and Libsyn. If you want to listen at your computer, the episodes will be available daily on The FCPA Compliance Report at 10am and on JDSupra at 6am: Monday – Opinion Release 14-02; Tuesday – Opinion Release 14-01; Wednesday – Opinion Release 13-01; Thursday – Opinion Release 12-02; Friday – Opinion Release 12-01.
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