On November 14, 2012, the U.S. Department of Justice (DOJ) and
the U.S. Securities and Exchange Commission (SEC) jointly released
their long-awaited guidance document, A Resource Guide to the
U.S. Foreign Corrupt Practices Act (Guide). The full Guide
(130 pages) is available for download here. It provides formal guidance from the
two bodies that enforce the criminal (DOJ) and civil (SEC)
provisions of the United States' Foreign Corrupt Practices
Act (FCPA) on their interpretation of the FCPA and their
approach to enforcing its provisions.
In addition to Canada's own anti-corruption legislation, the
Corruption of Foreign Public Officials Act, the FCPA and
its enforcement are of interest to many Canadian companies because
of its broad reach. Not only are U.S. companies and SEC issuers
subject to the FCPA, but foreign entities who use the U.S. banking
system or otherwise carry on business in the U.S. are also within
The Guide discusses several key interpretation issues related to
the anti-bribery and accounting provisions of the FCPA,
Identifying legitimate gifts between business persons
Distinguishing between proper and improper travel and
Listing factors used in identifying a "foreign
Distinguishing between permitted facilitating payments and
Outlining the nature and extent of successor liability in the
Properly vetting third party agents and consultants
Ensuring an adequate level of control over financial
record-keeping and reporting
The Guide also contains a discussion of the elements of an
effective compliance program. Such a compliance program, in
addition to helping a company prevent and detect misconduct, may be
taken into consideration by the DOJ and/or SEC in determining if
and how to proceed with enforcement actions where FCPA violations
As well, the Guide contains examples of several recent instances
in which the DOJ and SEC have declined to pursue enforcement
actions, describing the circumstances of the FCPA misconduct and
citing the factors taken into consideration by the authorities in
electing not to pursue enforcement. Though not determinative,
voluntary disclosure to the authorities of the misconduct is a
common element in each of these instances.
Since foreign corrupt practices cases typically settle without a
trial, judges rarely provide public and definitive rulings on the
interpretation of the FCPA by prosecutors. Thus, the Guide is
useful as a formal description of the approach to FCPA enforcement
taken by the DOJ and SEC. Though not indicative of a
significant change in the direction of enforcement efforts, the
Guide helps to provide practicality and clarity to the business
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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