US authorities release guidance on Foreign Corrupt Practices Act
15 November 2012
The US justice department and the Securities and Exchange Commission yesterday came out with the long-awaited guidance on how prosecutors interpreted and enforced a federal anti-corruption law that banned American businesses from bribing officials overseas.
The 120-page "resource guide" to the Foreign Corrupt Practices act details the government's understanding of and standard practices for the 1977 law. The statute had for decades been dormant. However, with stepped up enforcement of late, corporate boardrooms are increasingly seeking counsel from compliance lawyers.
The detailed guidance includes numerous case studies setting out what would and would not amount to a violation of the law. According to analysts the guidance is especially important in view of the fact that cases of foreign corrupt practices hardly get adjudicated, with corporates generally inclined to settle potential cases without a trial as induction could cripple a business.
The guide is signed by Lanny A Breuer, the assistant attorney general for the justice department's criminal division, and Robert S Khuzami, the SEC's director of enforcement. It lays out a set of criteria in considering who counted as a foreign official.
Meanwhile the department has declined to prosecute several dozen foreign bribery schemes it came across over the past two years, the document said.
It did not consider violations where the company disclosed the conduct to authorities, fired responsible employees and initiated steps to improve its compliance programme, according to the document.