FCPA opinion tackles government-authorized payments

The opinion procedure release by the DOJ, dated Oct. 25, addressed the request of a U.S.-based provider of training events and logistical support. The company contacted the DOJ regarding a contract it had with a U.S. government agency to provide logistical support for foreign government personnel attending training events established for and utilized by multiple U.S. government entities.

The logistical support included stipends for the foreign officials intended to pay for meals not served during the event, along with driving mileage costs for certain participants.

The company provided the DOJ with the following information:

• The U.S. government agency it had the contract with advised the payments were authorized under the Foreign Assistance Act of 1961 (Sections 129 and 636, specifically);
• The payment amounts—ranging between $8 to $40 per day—were determined and approved by the U.S. government. The stipends were paid to a U.S. government officer, who then subsequently distributed the payments to the foreign officials;
• The company maintained accounting records to document the payments and provided all documentation to the U.S. government agency;
• The contract was awarded to the company through a competitive selection process operated by the U.S. government; and
• The company was unaware which foreign officials would receive payments when it bid on the contract.

The DOJ determined it would not bring an enforcement action under the anti-bribery provisions of the FCPA, based on the current facts of the case provided.

“[T]he proposed expenditures reflect no corrupt intent of requestor—which is demonstrated, in part, by the agency’s belief that the Foreign Assistance Act authorizes the at-issue payments to foreign officials,” the DOJ said. “Moreover, the payments themselves do not appear to be for the purpose of assisting requestor in obtaining and retaining business. To the contrary, based on the specific facts presented here, any payments to foreign officials are both called-for and ultimately delivered by agencies and/or personnel of the United States government.”

FCPA opinion procedures are designed for U.S. companies to get the attorney general’s judgment on whether certain conduct is in line with the DOJ’s enforcement policy regarding the FCPA. The opinions have no binding application to any party other than the requestor and only to the extent the disclosure of facts and circumstances in its request and supplements is accurate and complete.

The DOJ in August issued an opinion on a separate case that addressed when the agency would determine expenses paid on behalf of a foreign official to be deemed “reasonable and bona fide.”