The Opinion Release Papers

The only Opinion Release of 2011 (11-01) may have left compliance practitioners initially scratching their heads. However, this collective head scratching is not because the Opinion Release is so difficult to understand and has no application to the everyday business of compliance, but for a polar opposite reason – the question posed to the Department of Justice (DOJ) is so straight-forward, and has been previously asked and answered, that it is difficult to understand how any first year compliance practitioner did not know the answer to it. Yet there is more than this facile analysis as to what may have been going on. 

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In the second Opinion Release of 2007, 07-02, the Department of Justice (DOJ) considered another scenario where a US company desired to pay for travel to the US of foreign officials and for some business entertainment while these persons were in the US. It had some additional facts beyond those from Opinion Release 07-01 which are important for a compliance program.

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In 2007, the DOJ issued two Foreign Corrupt Practices Act (FCPA) Opinion Releases which offered guidance to companies considering whether to, and if so how to, incur travel and lodging expenses for government officials. Both Opinion Releases laid out the specific representations made to the DOJ, which led to the Department approving the travel to the US by the foreign governmental officials. These facts provided strong guidance to any company which seeks to bring such governmental officials to the US for a legitimate business purpose. In this podcast I discuss Opinion Release 07-01. In the next episode, I will take up 07-02.

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What is a company to do if, in order to obtain a contract with a foreign government, they must agree to invest a percentage of the proceeds of the transaction into the community in which it operates as a “charitable donation”? This issue was considered in the second FCPA Opinion Procedure Release of 2010, 10-02. This issue is often negotiated with the foreign government and can include cash or in-kind contributions of computers, equipment or appliances to schools, communities or organizations. While not a payment to a governmental official, it is still a payment to a governmental entity for the purpose of securing a lucrative contract and requires careful consideration. This spectra is currently required in some countries by law and these payments have generated some questions with regard to compliance with the Foreign Corrupt Practices Act (FCPA) as such donations could be interpreted as corruptly giving or offering anything of value to any “foreign official” in order to assist “in obtaining or retaining business for or with, or directing any business to, any person .

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Can you hire a foreign official as your agent? Is a foreign official always a foreign official for the purposes of the Foreign Corrupt Practices Act (FCPA)? Can a person be a foreign official yet not under a contract for third party services? After all, the FCPA does not prohibit business relations with or even payments to foreign officials as there must be evidence of corrupt intent. Put another way, while such a scenario is certainly high risk under the FCPA, just because it is high risk does not mean that it cannot be accomplished. It simply means the risk management must be higher. The problem was laid out in Opinion Release 10-03.

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Could certain US based non-profits pay to bring a large number of foreign officials to the US, including paying for business class flights? In Opinion Release 12-02, the Requestors, 19 non-profit adoption agencies located in the US, asked the DOJ about bringing certain foreign governmental officials involved in the foreign country’s adoption process to the US. All the foreign governmental officials are involved in the process of allowing children from their country go through the adoption process with the US non-profits involved. The trips to the US were for two days of meetings.

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