Page 33 - U.S. FOREIGN CORRUPT PRACTICES ACT

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

mischaracterization of expenditures may also, of • Do not condition payment of expenses on any
action by the foreign official. 159
course, indicate a corrupt intent.
• Obtain written confirmation that payment of
DOJ and SEC have consistently recognized the expenses is not contrary to local law. 160
that businesses, both foreign and domestic, • Provide no additional compensation, stipends,
are permitted to pay for reasonable expenses or spending money beyond what is necessary
to pay for actual expenses incurred. 161
associated with the promotion of their products
• Ensure that costs and expenses on behalf of
and services or the execution of existing contracts. the foreign officials will be accurately recorded
In addition, DOJ has frequently provided guidance in the company’s books and records. 162
about legitimate promotional and contract-related In sum, while certain expenditures are more
expenses—addressing travel and lodging expenses likely to raise red flags, they will not give rise to
in particular—through several opinion procedure prosecution if they are: (1) reasonable, (2) bona

releases. Under the circumstances presented in fide and (3) directly related to (4) the promotion,
those releases, 151 DOJ opined that the following demonstration, or explanation of products or
types of expenditures on behalf of foreign officials services or the execution or performance of a
did not warrant FCPA enforcement action: contract. 163

• travel and expenses to visit company facilities
or operations; What Are Facilitating or Expediting
• travel and expenses for training; and Payments?
• product demonstration or promotional The FCPA’s bribery prohibition contains a
activities, including travel and expenses for narrow exception for “facilitating or expediting
meetings.
payments” made in furtherance of routine
Whether any particular payment is a bona
governmental action. 164 The facilitating payments
fide expenditure necessarily requires a fact-specific
exception applies only when a payment is made to
analysis. But the following non-exhaustive list of
further “routine governmental action” that involves
safeguards, compiled from several releases, may
non-discretionary acts. 165 Examples of “routine
be helpful to businesses in evaluating whether a
governmental action” include processing visas,
particular expenditure is appropriate or may risk
providing police protection or mail service, and
violating the FCPA:
supplying utilities like phone service, power, and
• Do not select the particular officials who will water. Routine government action does not include
participate in the party’s proposed trip or
program 152 or else select them based on a decision to award new business or to continue
predetermined, merit-based criteria. 153 business with a particular party. 166 Nor does it
• Pay all costs directly to travel and lodging include acts that are within an official’s discretion or
vendors and/or reimburse costs only upon 167
presentation of a receipt. 154 that would constitute misuse of an official’s office.
• Do not advance funds or pay for Thus, paying an official a small amount to have the
reimbursements in cash. 155 power turned on at a factory might be a facilitating
• Ensure that any stipends are reasonable payment; paying an inspector to ignore the fact
approximations of costs likely to be
incurred 156 and/or that expenses are limited that the company does not have a valid permit
to those that are necessary and reasonable. 157 to operate the factory would not be a facilitating
• Ensure the expenditures are transparent, payment.
both within the company and to the foreign
government. 158
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