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DOJ and SEC Release Second Edition to FCPA Resource Guide

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) quietly released updated guidance on the Foreign Corrupt Practices Act (FCPA) before the Fourth of July holiday weekend.  Entitled A Resource Guide to the U.S. Foreign Corrupt Practices Act, Second Edition[1] (“Guide”), the Guide is the first update to the original document published in November 2012.

Corporate compliance counsel will note that nothing within the Guide comes as a surprise.  The Guide is not a new document, but rather an update of well-known principles that takes into account the enforcement actions, caselaw, and government interpretations that have been issued since 2012.

The Guide is one of the more comprehensive compliance guidelines issued by the government, particularly as it now incorporates by reference recently issued policies including the 2017 FCPA Corporate Enforcement Policy , the 2018 Selection of Monitors in Criminal Division Matters, the 2018 Coordination of Corporate Resolution Penalties, and the 2017 Evaluation of Corporate Compliance Programs, as well as the 2019 and 2020 updates to the Evaluation of Corporate Compliance Programs.  Intended to provide guidance on the statutory requirements of the FCPA, the Guide continues to address a variety of topics such as what is covered by the FCPA’s anti-bribery and accounting provisions, guiding principles of enforcement, potential consequences for violations, and the different types of resolutions available.

Corporate compliance counsel will note that nothing within the Guide comes as a surprise.  The Guide is not a new document, but rather an update of well-known principles that takes into account the enforcement actions, caselaw, and government interpretations that have been issued since 2012.  In particular, updates include the:

  • Definition of “foreign official;”
  • FCPA’s jurisdictional reach;
  • “Local law” affirmative defense;
  • Mens rea requirement; and
  • Statute of limitations for criminal violations of the accounting provisions.

Of note, the Guide acknowledges the decision in United States v. Hoskins,[2] and the Second Circuit’s finding that individuals can be criminally prosecuted for conspiracy to violate the FCPA anti-bribery provisions or aiding and abetting an FCPA anti-bribery violation, only if that individual’s conduct and role fall into one of the specifically enumerated categories expressly listed in the FCPA’s anti-bribery provisions.  The Guide, however, notes that the Northern District of Illinois[3] has rejected Hoskins, and further indicates that unlike the FCPA anti-bribery provisions, the accounting provisions apply to “any person,” and therefore are not subject to the Second Circuit’s reasoning in Hoskins.  Nevertheless, the hypothetical on “FCPA Jurisdiction” has been updated from the original resource guide to remove references to jurisdictional reach based on conduct outside of the United States under an application of conspiracy law.[4]

Key updates are also found in the Guide’s examples of enforcement actions and declinations.  The Guide includes anonymized case studies of actual investigations resulting in declinations, even where there was senior official engagement involving millions of dollars in bribes.  In particular, the Guide includes a Compliance Program Case Study which provides helpful transparency into the government’s focus, and the ultimate benefits, of implementing and enforcing a comprehensive risk-based compliance program.  The Compliance Program Case Study confirms that even when an organization’s compliance program fails to catch a violation, declinations are still possible where the organization has implemented a “robust compliance program and good faith enforcement of it.”[5]

The key emphasis on effective compliance programs is further emphasized through the addition of another factor to the original ten “Hallmarks of Effective Compliance Programs.”  The additional factor is the “Investigation, Analysis, and Remediation of Misconduct,” which the Guide notes is the “truest measure of an effective compliance program” and aligns the Guide with the 2019 and 2020 update to the DOJ’s Evaluation of Corporate Compliance Programs.  Advocating for an effective compliance program is a running theme within the vast majority of recent guidance issued by the DOJ, particularly in negotiating resolutions.  The Guide is a helpful tool for organizations and provides a comprehensive roadmap to not only designing and implementing appropriate safeguards against foreign bribery, but also in defending the organization’s compliance program should the government open an investigation into violations of the FCPA.

[1] A Resource Guide to the U.S. Foreign Corrupt Practices Act, Second Edition, by the Criminal Division of the U.S. Department of Justice and the Enforcement Division of the U.S. Securities and Exchange Commission, July 2020, available at https://www.justice.gov/criminal-fraud/file/1292051/download.

[2] United States v. Hoskins, 902 F.3d 69, 76-97 (2d Cir. 2018).

[3] United States v. Firtash, 392 F. Supp. 3d 872, 889 (N.D. Ill. 2019).

[4] A Resource Guide to the U.S. Foreign Corrupt Practices Act, Second Edition, pg. 11.

[5] A Resource Guide to the U.S. Foreign Corrupt Practices Act, Second Edition, pg. 68.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 192

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About this Author

Colin R. Jennings Government Investigations & White Collar Attorney Squire Patton Boggs Cleveland, OH
Partner

Colin R. Jennings has been selected as primary outside counsel for global compliance work by more than 35 public and privately held global companies, and regularly provides guidance and counseling in connection with these companies’ ongoing compliance efforts for both their domestic and international operations, including, when necessary, investigation and defense of compliance-related concerns.

Colin’s experience includes conducting independent reviews of the structure, operation and performance of established compliance programs. Colin regularly conducts compliance reviews and...

216-479-8420
Ayako Hobbs Litigation Attorney Squire Patton Boggs Cleveland, OH
Senior Attorney

Ayako provides litigation counsel to clients across a number of industries, where her practice focuses on assisting clients with contractual matters and litigating complex commercial disputes. Ayako has experience in supply chain management, regulatory compliance, attorney ethics, and government investigations. Her government investigations practice involves conducting internal investigations abroad and defending clients in enforcement matters related to international economic sanctions. 

Ayako's criminal defense and investigations practice involves representing public and private corporations and business professionals in response to criminal or regulatory investigations. She has experience defending foreign individuals in Foreign Corrupt Practices Act (FCPA) and money laundering matters, as well as representing government contractors and individual employees during criminal investigations of public corruption, including grand jury testimony. Ayako has assisted with anticorruption due diligence for multiple Fortune 500 companies in global mergers and acquisitions and conducted numerous internal investigations into allegations of employee misconduct, fraud or other business crimes, including potential violations of US trade sanctions and FCPA.  Complementing her experience representing clients in internal investigations, Ayako has represented professional athletes and other high-net-worth individuals in their business and personal ventures, such as asset recovery for those who are the victims of fraud and violations of trust.

Ayako also practices in the Litigation Practice, where she focuses on complex commercial matters, including consumer class actions, arbitration proceedings, contract disputes, business torts, property matters and product liability. She has experience litigating on behalf of employers in discrimination, harassment, retaliation and wrongful termination cases as well as assisting with in-house counsel in the review, renegotiation and revision of existing third-party supplier contracts.

Prior to joining the firm, Ayako was a law clerk at a Cleveland-based law firm assisting primarily in creditor representation and insurance subrogation.

Ayako regularly writes articles on the firm's blogs and with specialized press. She is a member of the Federal Bar Association, Florida Bar Association, and Cleveland Metropolitan Bar Association.

216-479-8577