DOJ issues Opinion Procedure Release to address FCPA compliance

On August 14, 2020, the US Department of Justice published its first Opinion Procedure Release since November 2014, answering a question posed by a US-based investment advisor (Requestor) concerning whether a contemplated payment by Requestor to a subsidiary of a foreign government-owned investment bank would conform with the DOJ’s enforcement policy regarding the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act.

Requestor explained in its request to the DOJ that—in connection with a purchase of a portfolio of assets by Requestor from a foreign subsidiary of a foreign government-owned investment bank (Subsidiary A)—Requestor had received assistance from a separate foreign subsidiary of that same foreign government-owned investment bank (Subsidiary B).  After Requestor successfully completed its purchase from Subsidiary A, Subsidiary B had sought a fee from Requestor to compensate it for the work it had performed for Requestor.  Requestor sought an opinion from the DOJ as to whether it would bring an FCPA enforcement action against Requestor if Requestor paid Subsidiary B its sought-after fee.

In its answer, the DOJ first explained that the FCPA does not prohibit payments to foreign governments or instrumentalities thereof, but rather prohibits “any domestic concern from corruptly giving or offering anything of value to any foreign official to assist in obtaining or retaining business for or with, or directing any business to, any person.”  Here, the DOJ explained that, based on Requestor’s representations, (i) the payment would be made to Subsidiary B and not an individual, (ii) there was no indication that Requestor intended or believed that the payment would be diverted to an individual, or that the payment would in fact be diverted, (iii) there were “ no corrupt offers, promises, or payments of anything of value, directly or indirectly, to any individual in connection with this transaction,” and (iv) Subsidiary B had performed “specific, legitimate services,” and the fee it sought was “commensurate with the services” provided and “commercially reasonable.”  The DOJ stated that it would not intend to bring an enforcement action, because these facts “show a payment to a foreign government instrumentality, not a foreign official, and do not reflect a corrupt intent to influence a foreign official.”

DOJ Opinion Procedure Release

 
You are currently offline.