DOJ issues Opinion Procedure Release to address FCPA compliance when health and well-being are at stake

On January 21, 2022, the US Department of Justice (DOJ) issued an Opinion Procedure Release (OPR) answering a question posed by a US-based company (Requestor) as to whether making a cash payment to a third-party intermediary (Third-Party Intermediary) that purported to be acting on behalf of a foreign country (Country A) in exchange for Country A immediately releasing from detention the captain of Requestor’s vessel, when continued detention posed a significant risk to the captain’s health and well-being, would conform with the DOJ’s enforcement policy regarding the anti-bribery provisions of the US Foreign Corrupt Practices Act (FCPA).

Requestor explained that in October 2021 Requestor’s vessel was traveling to a foreign country (Country B) to undergo maintenance.  Prior to arrival, Requestor’s shipping agent informed the vessel’s captain that all Country B ports were occupied and that the vessel should anchor in international waters until there was a vacancy at Country B’s ports.  However, the shipping agent provided the captain with incorrect anchoring coordinates, causing the captain to inadvertently anchor the vessel in Country A’s waters.  

Country A’s navy intercepted the vessel, detained the captain, confiscated the vessel’s logbook and the crew’s documents, and ordered the vessel and crew to remain stationary.  An incident report from Country A’s navy states that the vessel was in violation of various laws and treaties.  Country A’s navy brought the captain to a prison onshore.  During his detention, the captain—who was suffering from serious medical conditions that were “significantly exacerbated” by his detention—was not questioned or provided any documentation authorizing his arrest.  Shortly after his detention, Third-Party Intermediary approached Requestor and demanded a payment in exchange for releasing the captain and permitting the vessel and its crew to leave Country A’s waters.  Requestor retained an agent (Requestor Agent) with which it had previously worked (and on which it had conducted due diligence) to interact with Third-Party Intermediary.  Requestor Agent sought to obtain a formal basis for the payment from Third-Party Intermediary (e.g., documentation setting out charges or a fine amount), but Third-Party Intermediary repeatedly rejected these requests and instead asserted that, if Requestor did not make a $175,000 cash payment, the captain and crew would be detained for a longer period and the vessel would be seized.  Requestor also unsuccessfully sought assistance from other U.S. government agencies.  Prior to making the payment, Requestor sought an opinion from the DOJ that doing so would not trigger an enforcement action.  

Given the urgency of the request, the DOJ provided a preliminary opinion on October 20, 2021—stating that it did “not presently intend to take an enforcement action under the FCPA’s anti-bribery provisions in response to the contemplated payment”—and then subsequently issued the full OPR on January 21, 2022.  In the January 21, 2022 OPR, the DOJ explained that the facts as presented would not trigger an enforcement action under the FCPA’s anti-bribery provisions because Requestor would not be making the payment (i) “corruptly” or (ii) to “obtain or retain business.”  

As to why the payment would not be made “corruptly,” the DOJ explained that: 

Under the FCPA, “[a] person acts corruptly if he acts voluntarily and intentionally, with an improper motive of accomplishing either an unlawful result or a lawful result by some unlawful method or means. The term ‘corruptly’ is intended to connote that the offer, payment, and promise was intended to influence an official to misuse his official position.” United States v. Kozeny, 667 F.3d 122, 135 (2d Cir. 2011). Conversely, “an individual who is forced to make payment on threat of injury or death would not be liable under the FCPA. Federal criminal law provides that actions taken under duress do not ordinarily constitute crimes.” United States v. Kozeny, 582 F. Supp. 2d 535, 540 n.31 (S.D.N.Y. 2008)

Relying on this analysis, the DOJ explained that because “the primary reason for the payment was to avoid imminent and potentially serious harm to the captain and the crew of the Requestor vessel,” this payment would not be made with corrupt intent.

As to why the payment would not be made to “obtain or retain business,” the DOJ explained that Requestor (i) had no ongoing or anticipated business with Country A, (ii) precipitated this entire situation by mistake by inadvertently entering County A’s waters, and (iii) only considered making this payment after it had reached out to various U.S. government agencies in a failed attempt to resolve this situation.  

The DOJ explained that under these specific facts the payment lacked corrupt intent and did “not appear to [have] a sufficient business purpose associated with” it.   Finally, the DOJ distinguished the instant scenario, which concerned a substantial threat to life and health, from situations involving threats of severe economic or financial consequences, and made clear that those scenarios “may well give rise to liability under the FCPA.”

DOJ Opinion Procedure Release - January 21, 2022

 
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