The Resource Guide to the U.S. Foreign Corrupt Practices Act was published by the Department of Justice and the U.S. Securities and Exchange Commission in November 2012. The Guide, the merits of which have been widely debated on the FCPA Blog, is now the subject of extensive discussion in the second edition of the Cambridge University Press Commentary on the OECD Convention on Bribery.
This is the only Commentary of the text. It was released in February 2014, six years after its first edition edited by Mark Pieth, Lucinda Low and Peter Cullen.*
A new chapter entitled A Resource Guide To The US Foreign Corrupt Practices Act; The US Government’s Perspective On Enforcing The FCPA by Philip Urofsky and Hee Won (Marina) Moon analyzes the positions that the DOJ and the SEC have expressed through the Guide and recent enforcement actions.
The new material reviews the Guide’s interpretation of the various statutory provisions of the FCPA and examines the compliance policies and programs espoused by the Guide. By commenting on the Guide’s own commentary of the FCPA statute, the authors provide law practitioners, company lawyers and academic researchers with a precious new resource.
The chapter also describes the different ways the U.S. government may resolve a purported violation of the FCPA and analyzes the insight the Guide provides as to how those resolution outcomes may be selected. In doing this, Urofsky and Moon set out the principles of enforcement and compliance recommendations.
They don’t debate the merits of including a compliance defense within the FCPA statute, however, a debate which continues to spill a considerable amount of ink.
Finally, under the heading “Resolutions,” Urofsky and Moon discuss the different forms of settlements and the role of monitors.
Only two corporations have taken the government to trial in the thirty-six year history of the FCPA and both ultimately prevailed. All of the remaining 100+ corporations charged with having violated the FCPA have settled, either by entering guilty pleas or civil settlements or, since 2004, by agreeing to non-judicial resolutions such as Deferred Prosecution Agreements (DPA) and Non-Prosecution Agreements (NPAs).
The authors express disappointment that, with the exception of declination decisions, the DOJ and SEC have failed to meaningfully elaborate on the factors underlying their enforcement resolution decisions. Urofsky and Moon say, moreover, that the Guide’s attempt to provide more detail about the settlement process, particularly with respect to declinations, has done little to illuminate the government’s enforcement policy.
As evidence, the authors first cite the case of Biomet, a medical products distributor that settled the DOJ’s claims through a deferred prosecution agreement in 2012. The authors criticize the lack of contrast between the factors used in the deferred prosecution context and the declination context.
Second, in a move that has arguably caused further confusion, the authors talk about the DOJ decision to end Pride International’s DPA one year early, to reward the company for “good behavior” in its compliance efforts. This marked the first time the DOJ terminated a DPA before its term, but the DOJ’s motion to dismiss didn’t provide meaningful clues as to why Pride was singled out for special treatment.
This new survey of FCPA enforcement practice deserves noting by other countries because it reiterates the robust approach of the United States, from which OECD Contracting States can surely learn, while also showing that cooperation by companies pays dividends as they can thereby settle claims.
Specifically, in this context of mutual learning or “cross-fertilization” in enforcement matters, it is notable that the UK Serious Fraud Office has adopted DPAs as a matter of policy. It appears however that there has not been one used in practice yet.
It is essential for European and other enforcers to keep track of U.S. enforcement and court decisions on the FCPA. The Commentary should help them do so. Indeed, in the words of Angel Guirria, Secretary-General of the OECD, the Commentary is, “an exhaustive review of the authoritative work undertaken by the Conference of States Parties to the Convention (The OECD Working Group on Bribery) in its country evaluation reports. It highlights the great achievements made to date but also identifies what remains to be done.”
* Mark Pieth, Professor of Criminal Law at Basel University, was Chairman of the OECD Working Group on Bribery in International Business Transactions from 1990 until 2013. Lucinda Low is a partner in the Washington, D.C., office of Steptoe & Johnson LLP, where she heads the firm’s anti-corruption practice. Peter Cullen is employed at the European Court of Justice, Luxembourg. The Second edition is edited by Mark Pieth, Lucinda Low and Nicola Bonucci. Nicola Bonucci is the OECD Director for Legal Affairs and the coordinator for accession.