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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

The Facilitating Payments Exception is a Narrow Gate

There are strict requirements for Facilitating Payments — the one exception written into the FCPA. Among other things, the payment must be for “routine governmental action . . . which is ordinarily and commonly performed by a foreign official.” See 15 U.S.C. §§78dd-1 (b) and (f) (3) [Section 30A of the Securities & Exchange Act of 1934].

The clear implication is that the exception will not apply if there was no legitimate routine governmental action pending and for which the payment or any part of it was made. A governmental action obtained or sought to be obtained by subornation of the official’s duty probably is not an action “ordinarily and commonly performed by a foreign official” and therefore is outside the scope of the exception.

For example, paying a customs clerk to schedule an inspection of goods already in the customs queue may be permissible. But paying a customs clerk to jump the queue, or paying for positive inspection results, may be outside the exception.

The question is whether the payment relates purely to “routine governmental action . . . which is ordinarily and commonly performed by a foreign official.”

Any time an official is asked to do something more – something beyond the scope of his or her normal discretion, the Facilitating Payments exception is unlikely to apply.

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