DOJ and SEC Jointly Release New Guide to the FCPA

Jan 2013

In November 2012, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) jointly released A Resource Guide to the U.S. Foreign Corrupt Practices Act, which provides a detailed analysis of the Foreign Corrupt Practices Act (FCPA) and provides guidance on the DOJ’s and SEC’s approach to enforcement of the act. Much of the guide is a synthesis of previous decisions and releases from the DOJ and the SEC. The guide summarizes the major provisions of the FCPA and other anti-corruption laws, including the anti-bribery and accounting provisions of the FCPA; provides information on the various consequences an individual or a company can face for an FCPA violation; and describes the various resolutions the SEC or the DOJ may reach when investigating a possible FCPA violation.

The longest chapter in the guide, “Guiding Principles of Enforcement,” discusses what both the DOJ and SEC review when considering investigating a possible FCPA violation or bringing FCPA charges. Like the rest of the guide, this chapter is synthesis of previous pronouncements by the DOJ and SEC, including U.S. Attorney’s Manual, the U.S. Sentencing Guidelines, and the SEC’s Seaboard Report on enforcement proceeding against companies. The chapter also reiterates that both the DOJ and the SEC look favorably at individuals and companies who voluntarily report violations and who cooperate with the authorities.

“Guiding Principles of Enforcement” also includes a detailed description of what the government considers an effective corporate-compliance program. According to the guide, the three basic questions the DOJ or the SEC asks when considering whether a company has an effective compliance programs are whether the program is well designed, whether the program is applied in good faith, and if it works. The presence of the following elements indicates an effective FCPA compliance program:

  • There is commitment from senior management and a clearly articulated policy against corruption.
  • The program applies to and is available to all employees.
  • The program addresses foreign corruption.
  • The program is well-supervised.
  • The program has risk-assessment techniques.
  • The company offers its employees training and advice regarding the program.
  • The program has incentives and disciplinary measures for all employees.
  • The program calls for thorough due diligence when dealing with third party agents, including knowledge of their business and reputation and an evaluation of the need for using a third-party agent in a foreign country.
  • The program allows employees to confidentially report violations.
  • The program includes internal investigations.
  • The program allows for periodic testing and review of its policies.

The guide was co-written by the Criminal Division of the DOJ and the Enforcement Division of the SEC.