PUTTING IN PERSPECTIVE THE FCPA GUIDANCE FROM THE US GOVERNMENT

The recently issued Guidance to the US Foreign Corrupt Practices Act (FCPA) issued by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) should contribute to a much better understanding of how these US government agencies enforce the FCPA. For the last several years, the threat of FCPA enforcement has constituted the leading compliance risk for global companies with businesses linked to the United States. US businesses, largely through trade associations such as the US Chamber of Commerce, have pressed the US authorities for more guidance on how those authorities interpret and apply the FCPA. The broad discretion these agencies possess, coupled with the lack of judicial oversight because no major company has been willing to litigate against the DOJ or SEC, has contributed to increasingly aggressive interpretations of the law.

The Guidance represents the US authorities’ response to such criticism. It serves as a useful compilation of FCPA case resolutions and will enable global companies to understand the FCPA’s enforcement history. This understanding may also permit companies to predict with greater accuracy how the FCPA will be applied. The Guidance clarifies certain issues and provides important direction regarding the interpretation of certain parts of the FCPA. The Guidance lays out what the authorities’ expect regarding effective anti-corruption compliance programs and what criteria they apply in deciding to initiate enforcement actions. These contributions are sufficient to justify the issuance of the Guidance and underscore the importance of this initiative. 

Jan-Mar 2013 Issue

Baker & McKenzie LLP