In FCPA Opinion Procedure Release No. 10-03 issued Wednesday, the Requestor — a U.S. limited partnership — is working with a foreign government on “an innovative natural resources project with a novel approach,” and needs help dealing with that government.
The consultant it retained — a U.S. partnership and its U.S. owner — is registered as an agent of the foreign government under the Foreign Agents Registration Act, 22 U.S.C. § 61. The consultant “has extensive contacts in the business community and the government in the foreign country, has previously and currently holds contracts to represent the foreign government and act on its behalf, including performing marketing on behalf of the Ministry of Finance, and lobbying efforts in the United States.”
While working for the Requestor, the consultant won’t be doing any lobbying for the foreign government. And those employees of the consultant still working for the foreign government will be walled off from the Requestor’s business. In addition to other controls, the consultant won’t have authority to make any decisions on behalf of the foreign government in connection with the Requestor’s business. Under local law, according to an opinion the Requestor received, the consultant and its employees aren’t officials of the foreign government, and the consultant can legally contract with the Requestor while continuing its other work with the foreign government.
Because the consultant is an agent of the foreign government, and sometimes acts on its behalf, the consultant and its employees could be “foreign officials” for purposes of the FCPA. But in this case, the DOJ said, “the consultant and its owner are not acting on behalf of the foreign government and therefore are not foreign officials.”
By walling off the consultant’s employees, fully disclosing the relationships to the relevant parties, making sure the relationships are permitted under local law, and putting in place the various contractual obligations to limit the consultant’s work for the foreign government, the DOJ was satisfied “the consultant is not a foreign official as defined by the FCPA, 15 U.S.C. § 78dd-2, and the Department would not take enforcement action based solely on payments to the consultant.”
In the opinion, the DOJ continued its helpful practice begun earlier this year of listing prior releases that may be relevant. It cited:
• Release 80-02 (Oct. 29, 1980), concerning an employee of a foreign subsidiary of a U.S. corporation who planned to run for political office;
• Release 82-02 (Feb. 18, 1982), about paying a “finder’s fee” to a Nigerian citizen employed in Nigeria’s foreign consulate;
• Release 86-01 (July 18, 1986), about employing foreign members of parliament; and
• Release 94-01 (May 13, 1994), about hiring a foreign official to provide consulting assistance.
FCPA Opinion Procedure Release No. 10-03 (September 1, 2010) can be downloaded here.
All other Releases can be downloaded here.