The US Department of Justice recently issued an opinion procedure release to address whether a US-based company that provides training events and logistical support for US government agencies would be prohibited by the Foreign Corrupt Practices Act (“FCPA”) from providing stipends to foreign officials who attend the trainings. The DOJ stated that, based upon the information provided, the payments were not prohibited by the FCPA because the payments were not made with a corrupt intent nor did they appear to be for the purpose of obtaining or retaining business.
More specifically, according to the company that requested the opinion (the “Requestor” or the “Company”), the Company was recently awarded a “task order” to provide training events for multiple US government entities pursuant to a contract with an unnamed US agency (“the Agency”). As part of that work, the Company will provide “logistical support” for foreign government personnel who attend the trainings, including stipends to allow foreign official attendees to pay for meals during the trainings and, in certain circumstances, to cover driving mileage costs. The Requestor was advised by the Agency that the stipends were authorized under Sections 129 and 636 of the Foreign Assistance Act of 1961. In addition, the stipends were not to be delivered to foreign officials by the Requestor but by a US government officer (not identified). According to the Requestor, the stipends, which would typically range between $8 and $40 per day, depending on the training location, were approved by the US government and were calculated to be in accordance with the US Department of State’s Meals and Incidental Expenses rates or a rate set by the US Embassy in the relevant country. The Requestor also stated that it documented all payments, costs and “any associated cash transactions,” and that it provided that documentation to the Agency along with detailed invoices.
Based on these facts, the DOJ stated that it did “not presently intend to take any enforcement action under the anti-bribery provisions of the FCPA.” The DOJ based that decision on the fact that the Requestor was not providing the stipends with a corrupt intent, demonstrated in part by the fact that the Agency believed the stipends were authorized by the Foreign Assistance Act. In addition, because the stipends were requested by the US government and ultimately delivered to foreign officials by a US government officer, the payments did not appear to the DOJ to be made for the purpose of obtaining or retaining business for the Requestor.