The Guidance One Year Later

The Guidance One Year Later

 This article was reprinted with permission from FCPA Professor

One year ago today, the DOJ and SEC released FCPA Guidance.  (See here for the Guidance and here for the Guidance press conference).

To say that the Guidance was long-awaited is an understatement.

In 1988, Congress encouraged the DOJ to issue FCPA guidance, but the DOJ concluded that “no guidelines are necessary.”  In 2002, the OECD – in the context of its Phase 2 report of U.S. enforcement efforts of the OECD Anti-Bribery Convention - encouraged U.S. enforcement agencies to issue guidance.  No dice.  Again, in 2010 the OECD – this time in the context of its Phase 3 report of U.S. enforcement efforts of the OECD Convention – encouraged U.S. enforcement agencies to issue guidance.  Again, no dice.  It was only after the FCPA reform movement was picking up steam in mid to late 2011 when the DOJ declared that FCPA guidance would be coming.  It took a year to actually release the Guidance and its release in November 2012 soon after the presidential election and during a lame duck Congress at least raises an inference that the Guidance and its timing was in part political.

Everyone, (or so it seemed) made their Guidance opinions known.  (See this prior post which collects dozens of opinions from law firms, individuals, and others regarding the Guidance).  The consensus was that the Guidance offered little in terms of actual new substance and that FCPA reform remains a viable issue.

My own thoughts were captured in this article “Grading the Foreign Corrupt Practices Act Guidance.”  Among other things, the article discussed how the Guidance was an advocacy piece and not a well-balanced portrayal of the FCPA as it is replete with selective information, half-truths, and, worse, information that is demonstratively false.  Indeed, as highlighted in this prior post, in the Guidance the enforcement agencies literally rewrote the statute!

In the Guidance, and in connection with its release, the enforcement agencies actually made some sensible statements (see here for the prior post) such as:

  • the enforcement agencies are “focused on bribes of consequence – ones that have a fundamentally corrosive effect on the way companies do business abroad.”
  • enforcement efforts are focused on “payments of real and substantial value that clearly represent an unambiguous intent to bribe a foreign official to obtain or retain business”
  • enforcement agencies are “interested in companies spending compliance dollars in the most sensible way” and that the Guidance can help companies as to where they can “minimize investment and where they can maximize it.”

Indeed one of the more useful aspects of the Guidance is that it can be used as a measuring stick for future enforcement activity (see here for the prior post).

Since the Guidance, there have been eight corporate FCPA enforcement actions.  Several of these enforcement actions – Ralph Lauren, Phillips, Stryker, and Allianz - raise the issue of whether the enforcement agencies are indeed acting consistent with their own Guidance, let alone the FCPA statue itself.

In short, a year has passed since the Guidance and not much has changed.

It would seem that the only thing that has changed is that the principal spokespersons / authors of the Guidance are now part of FCPA Inc.  (See here, here and here).

Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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