The FCPA Advisory Opinion process
The Department of Justice’s Foreign Corrupt Practices Act (FCPA) Opinion Procedure Release process allows domestic concerns and issuers to request an opinion from DOJ as to “whether certain specified, prospective – not hypothetical – conduct conforms with the Department’s present enforcement policy regarding the anti-bribery provisions of the FCPA.”1 This process offers a vehicle for companies to ask the DOJ if their proposed conduct would constitute an FCPA violation and trigger an enforcement action.
In our experience, the Opinion Procedure Release process can be many months long, involving a back-and-forth dialogue with the government and requiring companies to disclose detailed facts before an opinion is issued. The DOJ encourages companies to utilize this process. However, such a process is often impractical because business activities typically outpace this timeline. The most recent opinion – released in August – is particularly notable due to its issuance within a month of the DOJ receiving information from the requestor, a U.S. adoption agency looking to incur travel-related expenses for foreign government officials.2 Although not binding on parties other than this requestor the guidance contained in this opinion provides a degree of insight beyond the adoption agency context at issue.
Underlying facts
In June 2023, a child welfare agency based in the United States and accredited to provide adoption services abroad was informed by the Central Authority for Adoption in a foreign country of a new requirement under which foreign government’s officials would conduct “government visits” with families that have adopted children from that country.3 The purpose of the visit, to be conducted annually, is “to ensure the success of the adoptions.”4
In connection with the requirement, the U.S. adoption agency offered to pay for certain travel-related expenses for two foreign government officials, selected by the foreign country, to visit Massachusetts, New York and Washington, D.C. for five days. Expenses covered by the U.S. adoption agency would include economy class airfare, lodging at a moderately priced hotel, local transportation, and all meals, some of which are in conjunction with the family visits and meetings. The U.S. adoption agency would also organize and pay for tourism activities, such as a museum visit or city tour, not to exceed US$100 per person.
Under the proposal, the U.S. adoption agency would also pay and host only the selected foreign government officials – not their spouses or family members. The agency would not compensate the officials for their visit, the officials would be ineligible to receive cash or a daily stipend, and all expenses associated with the above-mentioned costs would be paid directly to merchants.
The DOJ’s analysis
Based on the specific facts provided by the U.S. adoption agency in its request, the DOJ concluded that they would not take enforcement action for these activities. The Department focuses on a few key elements:
- First, they highlight the purpose of the activities. The DOJ uses the “business purpose” test, which assesses the purpose of the payment or offer by a requestor to determine whether there may be corrupt intent. Here, the Department concluded that the expenditure of “reasonable and bona fide expenses directly related to the promotion, demonstration, or explanation of [the Requestor’s] products or services” (internal citations omitted) does not contravene the anti-bribery provisions of the FCPA.
- Second, the Department also reflected on prior opinion releases from 2011 and 2012 in which the Department previously declined to take enforcement action against adoption agencies.5 In those Opinions, the requestors had planned to pay for only the reasonable costs of government officials to meet with families who adopted children from their country and educate them about the services provided by the agency.
Through this brief analysis from the Department, the DOJ focuses on discrete characteristics as opposed to a sweeping analysis of the potential issues in this case.
Concluding thoughts
Although opinions released through the Opinion Procedure Release process are not binding on parties other than the direct requestors, past opinions do shed some light on the DOJ’s appetite to pursue enforcement actions in particular contexts and for certain activities. The August 2023 opinion, for instance, draws attention to key aspects of the scenario presented, which we highlight as follows:
- Economy travel fare and accommodations;
- Direct payments to providers for these costs – not the foreign government officials;
- Modest ancillary activities to facilitate local educational tours and recreation with the families (paid directly to providers);
- Prohibition on payment to or for spouses or family members of foreign government officials;
- Lack of involvement in selection of the foreign government participating in these trips;
- Prohibition of other payments or awards for traveling foreign government officials.
Altogether, these key facts are helpful guides for companies seeking to evaluate their compliance with the FCPA for potential future activities.
More broadly, the Opinion Procedure Release process remains a potential option for companies – particularly when confronted with novel fact patterns or scenarios that allow for the time that the DOJ process can take – to obtain a degree of certainty that otherwise would be absent. Although still used only sporadically, the process remains an available path – as the handful of opinions from recent years underscore.
Next steps
Companies continue to have a strong incentive to proactively evaluate, test, and update their compliance programs to ensure that those programs align with current business activities and risks and meet the ever-increasing expectations of enforcement authorities, including the DOJ. The same is true of third-party travel and gift policies specifically, which can be implicated by scenarios such as the one presented in the recent opinion. Our experienced lawyers are able to provide that guidance and support, and help strengthen these programs and policies proactively.
References
1 Dep’t of Justice, Foreign Corrupt Practices Act Review Opinion Procedure Release No. 23-1 (Aug. 14, 2023) https://www.justice.gov/criminal-fraud/file/1593226/download.
2 Id.
3 Id.
4 Id.
5 Dep’t of Justice, Foreign Corrupt Practices Act Review Opinion Procedure Release No. 11-01 (June 30, 2011) https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2011/07/06/11-01.pdf; Dep’t of Justice, Foreign Corrupt Practices Act Review Opinion Procedure Release No. 12-02, Department of Justice (Oct. 18, 2012) https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2012/10/25/1202.pdf.
