How to Identify “Government Officials” Under the FCPA Utilizing Compliance Training Online


How to Identify “Government Officials” Under the FCPA Utilizing Compliance Training Online is Part 3 in a 3-Part FCPA Training blog series.

Who counts as a “Government Official” under the FCPA? In a law with such broad provisions, this term is no exception. While the words bring to mind a high-level employee in uniform with a stern expression and a “let’s get down to business” attitude, the term actually can apply to either low-ranking or high-level officials in various situations. In previous blogs, I provided some real-life examples of “anything of value” and “corrupt intent”; but who exactly are the officials from past cases? How do they vary by industry?

In FCPA cases of Pharmaceutical companies, such as Johnson & Johnson and Pfizer, doctors and other health care professionals employed by foreign governments are often bribed (in some interesting ways, see my previous FCPA series blog on “anything of value”) in order to win business and increase prescriptions for the companies’ pharmaceutical products.

In FCPA cases of Oil & Gas companies, such as Global Santa Fe or Parker Drilling Company, it is common to hear about customs officials being bribed to issue permits or documentation for oil drilling rigs. You may be thinking, “issue permits?” Isn’t that just a facilitating payment? Nope…anytime a transaction involves the discretion of an official in awarding business or not, it counts as a bribe…and any person hired to review bids on behalf of a government agency is surely a “Government Official.”

Other common examples of these officials could be a member of the armed services, a member of a royal family who manages a government-owned industry, or an employee of a state-owned or state-controlled utilities company.

Proactively countering unethical transactions with government officials can be broken into two steps. The first step is compliance training online for employees and third-party vendors. Employees should be educated on who counts as a “Government Official”, so they can be sure to maintain awareness of the FCPA provisions before undertaking any course of action with these officials. One roadblock to this – many times, the employees themselves don’t interact with these officials; rather, they interact with a third party, or broker, who then in turn interfaces with the foreign official. Therefore, not only do employees need to be educated, but also third parties need to maintain this awareness before making any transactions. To ensure your employees and third-party vendors are aware of who counts as a “Government Official” you can implement compliance training online. By doing so you can track attestations and identify trends (ie. are there certain questions missed by a majority of test takers?), helping you to modify and improve your FCPA training efforts.

The second step is implementing transaction monitoring software. Just because your employees and third parties have been trained on anti-bribery, anti-corruption and who counts as a “Government Official”, does not completely eliminate the risk that bribery will occur. The transactions made involving third parties should still be closely monitored for the risk of fraud.

These third parties, especially those in high-risk countries like Nigeria and China, need to be initially vetted to assess their business reputation and any possible relationships with government officials. Further, these parties need to be made aware of the company’s FCPA policy, and they need to certify and attest to the policy. It is crucial to maintain this audit trail in preparing for the unfortunate case a company is under investigation by the DOJ or SEC. I’ve said it before, and I’ll say it again – a commitment to a strong anti-bribery compliance program can save a company, as in the case of the offshore oil drilling company Pride International, who earned an early release from a deferred prosecution agreement because of their vigorous FCPA compliance effort.

Topics:  Compliance, FCPA, Government Officials

Published In: General Business Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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