foreign corrupt practices act - … presentation... · the guide to the fcpa due diligence ....

FOREIGN CORRUPT PRACTICES ACT

KEVIN M. PLANTE, ESQ.

MARCH 19, 2016

FOREIGN CORRUPT PRACTICES ACT KEVIN M. PLANTE, ESQ. MARCH 19, 2016

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FOREIGN CORRUPT PRACTICES ACT (“FCPA”)

15 U.S.C. § 78dd-1 et seq.


“It shall be unlawful for any domestic concern…or for any officer, director, employee, or agent of such domestic concern…to make use of the mails or any means…corruptly in furtherance of an offer, payment, promise to pay, or authorization of payment of any money, offer, gift, promise to give, or authorization of the giving of anything of value to…any foreign official for purposes of…”

15 U.S.C. § 78dd-2(a) & (a)1


“…influencing any act or decision of such foreign official in his official capacity, inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or securing any improper advantage; or inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality…”

15 U.S.C. § 78dd-2(a)(1)(A)(i) & B


“…in order to assist such domestic concern in obtaining or retaining business for or with, or directing business to, any person…”

15 U.S.C. § 78dd-2(a)(1)(B)


“DOMESTIC CONCERN”

“…any individual…”

“…any corporation…”

• Nonprofit corporations and charitable institutions are “domestic concerns.”

• FCPA applies to nonprofits. • Nonprofits have been involved in investigations and

prosecutions under the FCPA.


“…foreign official…”

“…any foreign political party or official thereof or any candidate for foreign political office…”

“…or any person…”

“FOREIGN OFFICIAL”


“ANY PERSON”

“…any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office…”


The Department of Justice has "encouraged [parties] to exercise due diligence and to take all necessary precautions to ensure they have formed a business relationship with reputable and qualified partners and representatives."

The Guide to the FCPA

DUE DILIGENCE


Resellers Vendors

Consultants Salespeople

Lawyers Accountants

Partners Agents

DUE DILIGENCE

We must conduct due diligence and vet any foreign parties with which we conduct business or have a relationship.


RED FLAGS

• A history of corruption in the country or high ranking in corruption index • Unusual payment patterns or financial arrangements with a foreign partner

or consultant • Refusal by the partner or consultant to provide a certification that it has not

and will not violate the FCPA • Unusually high commissions • Lack of transparency in expenses and accounting records • Apparent lack of qualifications or resources on the part of the partner or

consultant • A recommendation by a government official to engage the particular partner

or consultant • Overpaying vendors • Heavy reliance by a party on government contacts as opposed to having a

knowledgeable staff • Agreements with vague descriptions of services


“CORRUPTLY”

• Intent is key • Means an intent or desire to

wrongfully influence the recipient

• Payment, offer, promise, gift, etc. need not succeed


“CORRUPTLY”

The Resource Guide to the U.S. Foreign Corrupt Practices Act, November 14, 2012


CRIMINAL AND CIVIL PENALTIES

15 U.S.C. § 78dd-2(g)

INDIVIDUALS:

5 years prison for each violation, up to 20 years for willful violations. $100,000 for each violation, up to $5 million for willful violations. ENTITIES:

Fine of $2 million for each violation, up to $25 million.

and…


DEBARMENT

EXAMPLE: Academy for Educational Development (“AED”)

and…


REPUTATIONAL DAMAGE

It takes many good deeds to build a good reputation, and only one bad one to lose it.

- Benjamin Franklin


TWO AFFIRMATIVE DEFENSES

#1 “…the payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s, political party’s, party official’s, or candidate’s country; or…”

15 U.S.C. § 78dd-2(c)(2)


#2

“…the payment, gift, offer, or promise of anything of value that was made, was a reasonable and bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign official, party, party official, or candidate and was directly related to…

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency thereof.”

TWO AFFIRMATIVE DEFENSES

15 U.S.C. § 78dd-2(c)(2)

FOREIGN CORRUPT PRACTICES ACT

KEVIN M. PLANTE, ESQ.

MARCH 19, 2016

foreign corrupt practices act - … presentation... · the guide to the fcpa due diligence ....

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