Both the new guidance and recent remarks by officials make clear that, although the FCPA has no value threshold, the government is not interested in bringing cases over de minimis payments to foreign officials.
Things of minimal value do not invoke liability. At the American Conference Institute’s recent FCPA event in Washington, both Assistant Attorney General Lanny Breuer and Charles Duross, Justice’s FCPA chief, mentioned buying coffee for foreign officials. Breuer remarked that company employees complained of living in doubt over whether payments like this would bring exposure to liability. The guidance states explicitly that modest promotional payments, such as buying coffee or paying taxi fare for officials, or distributing t-shirts with the company logo, or picking up a modest bar tab for customers, do not violate the FCPA.
Even payments of moderate value, where appropriate, do not bring exposure to liability. The guidance lists as examples the gift of a moderately-priced crystal vase to a recently-married foreign official, or payment of expenses for business-class airfare, a hotel and reasonable entertainment for senior officials on a legitimate inspection, as appropriate payments.
What certainly does violate the FCPA is lavish or luxurious payments. A gift of a fur coat or sports car, or an all-expenses-paid trip to Las Vegas where a company has no business facilities, obviously would fit the bill.
The take-away is that the DOJ is not concerned with small potatoes. Assistant Attorney General Breuer said at the ACI Conference that the DOJ is concerned with “what matters” — what he described as bribes of consequence, that have a “fundamentally corrosive” effect on how companies do business abroad. In doing so, Breuer intends that the DOJ be both “on the right side of history” and “advancing history” towards a world free of kleptocrats.
At the end of the day, Breuer said, the DOJ wants companies to “do the right thing,” and the guidance is intended to help companies and their attorneys do that.
Mark Friedman is a 2011 NYU Law graduate and a criminal defense attorney in New York City. He is seeking to transition into FCPA compliance. He can be contacted here.