Regulatory and compliance

US federal agencies update resource guide on foreign corruption practices

Published on 10th Aug 2020

The definition of "foreign official” and clarification of criminal violations of accounting provisions are among the updates in a new edition of the guide to US global anti-corruption law and practices

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The US Department of Justice (DOJ) and the Securities and Exchange Commission's (SEC) have released the second edition of the Resource Guide to the US Foreign Corrupt Practices Act with a series of updates to reflect developments since its first publication eight years ago.

The latest edition contains a detailed compilation of information and analysis linked to the Foreign Corrupt Practices Act (FCPA), including the statutory requirements of the Act, and incorporates hypothetical and practical examples based on more recent enforcement actions.

Enforcement developments

The new edition, released on 3 July 2020, offers updated insight into the enforcement policies and practices of the DOJ and SEC, and reflects FCPA-related updates and developments since it was first released in November 2012. The core of the guide remains unchanged.

The updates include:

  • The definition of “foreign official” incorporates recent case law on the term “instrumentality” for purposes of identifying “foreign officials” under the anti-bribery provisions.
  • The hallmarks of an effective compliance programme are clarified and a new hallmark has been added covering "Investigation, Analysis, and Remediation of Misconduct".
  • The section on merger and acquisitions and corporate-successor liability is reinforced, with the inclusion of recent examples on DOJ enforcement actions and practical advice to companies on due diligence and disclosure obligations.
  • Criminal violations of accounting provisions and the DOJ's position on the limitations period for FCPA violations are further clarified. The guide states that a criminal violation requires a "knowing and wilful failure to comply with the FCPA’s books and records or internal controls provisions". For the violations of the FCPA accounting provisions, a limitation period is increased from five to six years.
  • Specific references are included to several policies that are applicable to the FCPA and have been adopted by the DOJ and SEC since 2012. These include the policy on coordination of corporate resolution penalties (also known as the "anti-piling on" policy), the FCPA corporate enforcement policy, and the selection of monitors in criminal division matters and the evaluation of corporate compliance programmes.

The second edition also provides detailed information about the statutory requirements, as well as insight into DOJ and SEC practices, thorough a range of hypotheticals, examples of enforcement actions and declinations, and summaries of applicable case law.

Osborne Clarke comment

The guide states that it "is non-binding, informal, and summary in nature" and does not constitute a rule or regulation. However, the resource remains one of the most useful reference guides and resources for practitioners and corporations.

Although Osborne Clarke does not advise on US law, should you require assistance in relation to this issue or any other US legal issue, we are able to refer you to firms in the US, with whom we have a close working relationship.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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