As Mike Koehler noted yesterday, the DOJ has issued its first Opinion Procedure Release of 2012.
The release is dated September 18 but didn’t appear on the DOJ’s website until this week.
The Requestor in Release 12-01 is an American lobbying firm wanting to represent the embassy of a foreign country in the U.S. The Requestor said it needed open an office in the foreign country and its partner there would include ‘a member of the royal family of the Foreign Country . . ., although he holds no position in the government.’
The DOJ said,
The [Justice] Department concludes that the Royal Family Member does not presently qualify as a foreign official. Although no reported decisions or any of the Department’s previous opinion releases have answered precisely the question at issue here—whether a member of the particular Foreign Country’s royal family is per se a “foreign official” for purposes of the FCPA—an earlier FCPA Opinion Release and district court decisions lend support to our conclusion that, in this context, and at this time, the Royal Family Member is not a foreign official for purposes of the FCPA.
The earlier opinion was Release 10-03 (September 1, 2010), available as a pdf here.
The DOJ also used the release to summarize its (and at least one district court’s) opinion about who’s a government official.
It said ‘decisions addressing whether a state-owned entity may be an “instrumentality” of a foreign government are also instructive for identifying the characteristics of a “foreign official” under the FCPA. In these cases, courts applied a fact-based analysis that focused on several factors, such as those articulated in United States v. Carson, et al., No. 09-cr-00077 (C.D. Cal. 2011):
• The foreign state’s characterization of the entity and its employees;
• The foreign state’s degree of control over the entity;
• The purpose of the entity’s activities;
• The entity’s obligations and privileges under the foreign state’s law, including whether the entity exercises exclusive or controlling power to administer its designated functions;
• The circumstances surrounding the entity’s creation; and
• The foreign state’s extent of ownership of the entity, including the level of financial support by the state (e.g., subsidies, special tax treatment, and loans).’
While the DOJ didn’t explicitly rely upon the Carson test in its analysis, it noted that the Requestor and the company it was partnering with in the foreign country incorporated FCPA-specific safeguards in their proposed business arrangement, and that the foreign country’s local law would not prohibit the embassy from engaging the Requestor directly.
DOJ Opinion Release 12-01 (September 18, 2012) can be download here (pdf).
Saskia F. Zandieh, a senior associate at Miller Chevalier in Washington, D.C., contributed to this post. Her practice focuses on corporate compliance and white collar defense, primarily involving the FCPA. She’s a native French speaker and is also fluent in Spanish. She can be contacted here.