In his testimony last week before the House committee investigating the FCPA, former U.S. Attorney General Michael Mukasey (left) proposed improving the procedures for federal guidance and advisory opinions. He said the current practice is inadequate and little used.
He’s right.
Since 1993, the DOJ has issued only 33 opinions, an average of about 1.8 opinions per year. The SEC doesn’t even have a process for issuing FCPA-related guidance and has never given advisory opinions.
“This near-absence of a meaningful advisory opinion process,” Mukasey told the House hearing, “represents a lost opportunity for the enforcement agencies to provide practical guidance to the business community and thereby enhance FCPA compliance.”
The FCPA is seldom litigated, so the DOJ’s Opinion Procedure Releases are a de facto substitute for judicial interpretation. They don’t have the force of law behind them (except as to requestors), but Releases are cited all the time by practitioners and compliance professionals as “official” guidance from the government.
“An active advisory opinion process and robust guidelines from the enforcement agencies would likely result in a higher level of compliance by companies subject to the FCPA,” Mukasey said.
Testifying on behalf of the U.S. Chamber of Commerce, Mukasey told Congress the overwhelming majority of businesses subject to the FCPA “seek in good faith” to ensure compliance and would be helped by “meaningful advisory opinions and guidelines from both the DOJ and the SEC.”
The Opinion Procedure Regulations appear in 28 CFR Part 80. They say, among other things, that a request must come from an issuer or domestic concern, must be in writing and must contain all details of the transaction. A DOJ opinion, the law stipulates, creates “a rebuttable presumption” that the conduct in question complies with the FCPA and with the DOJ’s current enforcement practices. 15 U.S.C. § 78dd-1(e) [Section 30A of the Securities & Exchange Act of 1934] and § 78dd-2(f).
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