Page 119 - U.S. FOREIGN CORRUPT PRACTICES ACT

A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.

164 Unlike the local law and bona fide expenditures 169 Criminal Information, Vetco Gray Controls Inc., et al.,
defenses, the facilitating payments exception is not an No. 07-cr-4 No. (S.D. Tex. Jan. 5, 2007), ECF Nos. 1-2, available
affirmative defense to the FCPA. Rather, payments of this at http://www.justice.gov/criminal/fraud/fcpa/cases/vetco-
kind fall outside the scope of the FCPA’s bribery prohibition. controls/02-06-07vetcogray-info.pdf.
Prior to 1988, the “facilitating payments” exception was
incorporated into the definition of “foreign official,” which 170 Complaint, SEC v. Noble Corp., No. 10-cv-4336 (S.D.
excluded from the statute’s purview officials whose duties Tex. Nov. 4, 2010), ECF No. 1, available at http://www.sec.
were primarily ministerial or clerical. See Foreign Corrupt gov/litigation/complaints/2010/comp21728.pdf; Non-Pros.
Practices Act of 1977, Pub. L. No. 95-213, § 104(d)(2), 91 Stat. Agreement, In re Noble Corp. (Nov. 4, 2010), available at
1494, 1498 (1977) (providing that the term foreign official https://www.justice.gov/sites/default/files/criminal-fraud/
“does not include any employee of a foreign government or legacy/2011/02/16/11-04-10noble-corp-npa.pdf; see also
any department, agency, or instrumentality thereof whose sources cited supra note 68.
duties are essentially ministerial or clerical”). The original
exception thus focused on the duties of the recipient, rather 171 Working Group on Bribery, 2009 Recommendation
than the purpose of the payment. In practice, however, it of the Council for Further Combating Bribery of Foreign
proved difficult to determine whether a foreign official’s Public Officials in International Business Transactions, at § VI
duties were “ministerial or clerical.” S. Rep. No. 100-85, at 53. (recommending countries should periodically review their
Responding to criticism that the statutory language “does not policies and approach to facilitation payments and should
clearly reflect Congressional intent and the boundaries of the encourage companies to prohibit or discourage facilitation
prohibited conduct,” Congress revised the FCPA to define the payments “in view of the corrosive effect of small facilitation
exception in terms of the purpose of the payment. H. Rep. payments, particularly on sustainable economic development
No. 100-40, pt. 2, at 77. In doing so, Congress reiterated that and the rule of law”); Working Group on Bribery, United States:
while its policy to exclude facilitating payments reflected Phase 3, at 24 (Oct. 15, 2010), available at https://www.oecd.
practical considerations of enforcement, “such payments org/daf/anti-bribery/44176910.pdf (commending United
should not be condoned.” Id. The enacted language reflects States for steps taken in line with 2009 recommendation to
this narrow purpose. encourage companies to prohibit or discourage facilitation
payments).
165 In exempting facilitating payments, Congress
sought to distinguish them as “payments which merely move 172 Facilitating payments are illegal under the U.K.
a particular matter toward an eventual act or decision or Bribery Act 2010, which came into force on July 1, 2011, and
which do not involve any discretionary action,” giving the were also illegal under prior U.K. legislation. See Bribery Act
examples of “a gratuity paid to a customs official to speed 2010, c.23 (Eng.), available at http://www.legislation.gov.uk/
the processing of a customs document” or “payments made ukpga/2010/23/contents; see also U.K. Ministry of Justice, The
to secure permits, licenses, or the expeditious performance Bribery Act 2010: Guidance About Procedures Which Relevant
of similar duties of an essentially ministerial or clerical nature Commercial Organisations Can Put into Place to Prevent Persons
which must of necessity be performed in any event.” H.R. Associated with Them from Bribing (Section 9 of the Bribery Act
Rep. No. 95-640, at 8. 2010), at 18 (2011), available at http://www.justice.gov.uk/
guidance/docs/bribery-act-2010-guidance.pdf.
166 Section 30A(f)(3)(B) of the Exchange Act, 15 U.S.C.
§ 78dd-1(f)(3)(B); 15 U.S.C. §§ 78dd-2(h)(4)(B), 78dd-3(f)(4)(B). 173 See, e.g., Non-Pros. Agreement, In re Helmerich &
Payne, supra note 168; Admin. Proc. Order, In the Matter of
167 In a 2004 decision, the Fifth Circuit emphasized Helmerich & Payne, supra note 161.
this precise point, commenting on the limited nature of the
facilitating payments exception: 174 In order to establish duress or coercion, a defendant
must demonstrate that the defendant was under unlawful,
A brief review of the types of routine governmental present, immediate, and impending threat of death or
actions enumerated by Congress shows how limited serious bodily injury; that the defendant did not negligently
Congress wanted to make the grease exceptions. or recklessly create a situation where he would be forced to
Routine governmental action, for instance, includes engage in criminal conduct (e.g., had been making payments
“obtaining permits, licenses, or other official documents as part of an ongoing bribery scheme); that the defendant
to qualify a person to do business in a foreign country,” had no reasonable legal alternative to violating the law;
and “scheduling inspections associated with contract and that there was a direct causal relationship between the
performance or inspections related to transit of goods criminal action and the avoidance of the threatened harm.
across country.” Therefore, routine governmental action See Eleventh Circuit Pattern Jury Instr., Special Instr. No. 16
does not include the issuance of every official document (2020); see also Fifth Circuit Pattern Jury Instr. No. 1.38 (2019);
or every inspection, but only (1) documentation that Sixth Circuit Pattern Jury Instr. No. 6.05 (2019); Seventh Circuit
qualifies a party to do business and (2) scheduling Pattern Jury Instr. No. 6.08 (2012); Ninth Circuit Pattern Jury
an inspection—very narrow categories of largely non- Instr. No. 6.5 (2010); 1A Kevin F. O’Malley, Jay E. Grenig, Hon.
discretionary, ministerial activities performed by mid- William C. Lee, Federal Jury Practice and Instructions § 19.02
or low-level foreign functionaries. (6th ed. 2008 & Supp. 2012).
United States v. Kay, 359 F.3d 738, 750-51 (5th Cir. 2004) 175 S. Rep. No. 95-114, at 11.
(internal footnote omitted) (emphasis in original).
176 Id. at 10.
168 Non-Pros. Agreement, In re Helmerich & Payne, Inc.
(July 29, 2009) [hereinafter In re Helmerich & Payne], available 177 Id. at 11.
at https://www.justice.gov/sites/default/files/criminal-
fraud/legacy/2011/02/16/06-29-09helmerich-agree.pdf. 178 United States v. Kozeny, 582 F. Supp. 2d 535, 540 n.31
(S.D.N.Y. 2008). 111