Guidance Roundup for Week ending November 16, 2012

Guidance Roundup for Week ending November 16, 2012

This article was reprinted with permission from FCPA Professor

This post provides a roundup of commentary (law firm, individuals, and civil society organizations) relating to this week's FCPA guidance issued by the DOJ and SEC.  See here for my previous statement.

As detailed below, the consensus among those who have publicly stated a position on the guidance appears to be that the guidance offers little in terms of actual new substance and that FCPA reform issues remain.  It appears that the only contrary publicly stated position is a press release from a variety of civil society organizations.

Debevoise & Plimpton

"[T]he Guidance is an important and valuable resource for companies and their legal and compliance advisors in developing effective compliance programs and preventing violations of the FCPA. However, as a non-binding compilation of the views of the U.S. enforcement agencies, the Guidance leaves tremendous latitude for prosecutorial discretion in enforcement decisions and is no substitute for greater clarity in the statutory language of the FCPA. We expect that the perspectives offered by the DOJ and the SEC, like the FCPA itself, will now be subject to considerable debate and interpretation."

Perkins Coie

"The Guide collects DOJ's and SEC's prior opinions and releases and provides helpful clarifications and hypothetical case studies for corporate counsel. The Guide, however, is just that-a guide-and is not binding on courts or even the agencies themselves."  [Among the authors of the Perkins piece is Markus Funk, co-chair of the ABA Global Anti-Corruption Task Force who previously formally presented a proposed Resolution, supported by the current and incoming Chairs of the ABA Criminal Justice Section, regarding FCPA reform (see here for the prior post)].

Duane Morris

"In large measure, DOJ and the SEC re-enforce previous guidance regarding how they exercise their prosecutorial discretion. [...] While the Guide helps clarify many issues regarding how DOJ and the SEC exercise their prosecutorial discretion, the Guide does not necessarily make FCPA compliance any easier."


"Ultimately, the guidance appears valuable primarily as a convenient and practical compilation of previously available reports, prosecution guidelines, policy manuals, agency opinions, and judicial decisions. It remains to be seen whether a push for legislative reform of the FCPA will continue in the next Congress."

Foley Hoag

"Although much of the guidance walks through established DOJ and SEC positions and practices, the Guide does, through the use of real-world examples and detailed hypotheticals, provide more concrete direction than was previously available."

Ropes & Gray

"The Resource Guide does not represent a shift in the government's FCPA policy so much as it gives unprecedented insight into where the government is likely to focus its expanding enforcement efforts in the coming years."


"Such guidance from the government is always welcome. It sharpens the enforcement focus and is a strong indicator of enforcement trends. While the Guide is unprecedented in both its length and detail, it does not provide clear-cut answers to many of the questions regarding the FCPA."

Manatt, Phelps & Phillip

"The most useful thing about the Guide may be that it collects the thinking of the agencies, along with descriptions of their past practices, in one place.  It does offer some specific guidance in a few of the areas that have been of concern to companies and their counsel and provides some helpful descriptions of hypothetical situations that would, would not, or might constitute violations of the FCPA, but it also leaves the status quo intact in many ways."

Chamber of Commerce

"While guidance by definition can never provide the same certainty as an affirmative statute, we're hopeful that this document will help companies seeking to comply with the law in good faith and prosecutors charged with enforcing it.  The business community will continue to engage with the DOJ and the SEC as they enforce the statute consistent with today's guidance."

Civil Society Organization's Press Release

[Global Witness, Global Financial Integrity, Open Society Foundation, International Compliance Accountability Roundtable, Earthrights International]

"Civil  society groups contend that the new Guidance renders moot calls from  the U.S. Chamber of Commerce's Institute for Legal Reform, for broad  amendments to the FCPA that would weaken key anti-bribery applications.   "The Guidance thoroughly addresses aspects of the law that the U.S.  Chamber has described as vague and difficult to translate into everyday  business practice," said Heather Lowe, Legal Counsel & Director of  Government Affairs at Global Financial Integrity.  "In light of the  content of the Guidance, we can't see any basis for the Chamber's  attacks on the FCPA to continue."

Jan Hanzlik (Venable- defense counsel in the DOJ's recent failed prosecution of Lindsey Manufacturing and its executives)

"The new Guidance amounts to much sound and fury, signifying very little.  Instead of responding to widespread concerns about the Act's lack of clarity, the Guidance for the most part simply reiterates positions taken by the DOJ and SEC in past enforcement actions.  DOJ now cites as settled law its own interpretations of the Act and the "principles" developed over the years through deferred prosecution agreements.  If the objective was to pull together the principles of prosecution and enforcement proceedings in one place, the Guidance succeeds.  But it's doubtful US companies and individuals trying to understand the consequences of their actions when doing business abroad will find much real guidance here."

Rita Glavin (Seward & Kissel - former Assistant Attorney General DOJ) in a Law360 article.

"This is going to be the definitive resource on the FCPA, but there's nothing in here that's a surprise."

Peter Henning (Professor, Wayne State University Law School and author of the White Collar Crime Watch on the New York Times)

"Now that the resource guide has arrived - providing only limited insight into what constitutes a violation or what might be a mitigating defense - I expect to see a reinvigorated effort to change the statute and provide brighter lines for companies doing business abroad."

Ryan McConnell (Baker & McKenzie - former DOJ prosecutor) in a Corporate Counsel article.

"The intended audience appears to be experienced FCPA practitioners (not a lay person), but the guidance omits much of the practical advice sought by readers to address FCPA compliance risk. Few companies that have given any consideration to the FCPA are struggling with such issues as whether a $10,000 dinner or a trip to Paris for a government official and spouse are appropriate under the FCPA, as addressed in the new guidance. What about having a government official attend the 2014 World Cup? The UK Bribery Act guidance squarely addresses this issue in just a third of the pages. As noted by the WSJ, a close review of a few of the footnotes raises questions about the reliance on enforcement actions to establish FCPA guidance. For instance, the guidance notes that, "the FCPA covers corrupt payments to low-ranking employees and high-level officials alike." Some practitioners believe that this issue is still awaiting resolution by the U.S. Court of Appeals for the Eleventh Circuit (U.S. v. Esquenazi), which is currently considering whether payments made to employees of the Haitian state-owned telecom qualify as payments to "foreign officials." The guidance also relies on non-pattern jury instructions that "a number of courts have approved" and, in one instance, on the DOJ's own opposition motion. The guidance says that these sources are authoritative because the decisions "are consistent with the acceptance by district courts around the country of over 35 guilty pleas by individuals." Notably missing from the DOJ's collection of sources are cases where the DOJ's FCPA enforcement efforts have fallen flat."

Steven Tyrrell  (Weil, Gotshal, former chief of the DOJ fraud section) in a Wall Street Journal article.  The guidance "does little to fill in the gray areas" and it is "more of a scrapbook of past DOJ and SEC successes than a guide book for companies who care about playing by the rules."

Erich Schwartz (Skadden, former Assistant Director SEC Division of Enforcement) in a Compliance Week article.

"This voluminous Resource Guide is clearly a substantial effort to organize the government's thinking on a variety of issues that are important in understanding how to comply with the FCPA. It is not, however, a clear roadmap for compliance.  The guide largely avoids announcing new policy."

Paul Pelletier (Mintz Levin - former Principal Deputy Chief in the DOJ's Fraud Section) in a Corporate Counsel article.

"There's nothing Earth-shattering here, but it's a great one-stop shopping manual for both practitioners and compliance officers."

In addition, see here from Wall Street Journal (Corruption Currents) (a collection of views) and  here from Trustlaw (a collection of views)

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

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