In its first FCPA Opinion Procedure Release of 2011, the DOJ confirmed what should be obvious — that the promotional expenses affirmative defense can be used to pay travel expenses of government officials who are being shown a company’s products.
Search Results for: label/Promotional Expenses
The affirmative defense for promotional expenses has always been a riddle, which explains why it appears so often among the Justice Department’s Opinion Procedure Releases, including both Releases so far this year. Congress added it to the U.S. Foreign Corrupt Practices Act in 1988, to allow businesses to pay travel expenses of foreign officials. […]
By Thomas Fox I want to thank Kyle Sheahen for his recent post and paper arguing that the promotional expenses defense under the FCPA is illusory. His work has stimulated a useful debate. From a perspective different than previous commenters (here), I’d like to state the case for the value of the defense. Generally, […]
When Kyle Sheahen wrote in this space about how useless the FCPA’s two affirmative defenses are, he kicked up a storm, especially about promotional expenses. Some readers agreed and others didn’t (here and here). Here’s Kyle’s reply: Dear FCPA Blog, My thanks to everyone who responded with posts and comments. As Tom Fox thoughtfully […]
In its second Opinion Procedure Release of 2007, the Department of Justice again looked at promotional expenses. An affirmative defense in the U.S. Foreign Corrupt Practices Act allows payment or reimbursement of expenses of foreign officials that are directly related to “the promotion, demonstration, or explanation of products or services.” 15 U.S.C. §§ 78dd-1(c)(2)(A) […]
In its first Opinion Procedure Release of 2007, the Department of Justice said it would take no action against a requestor proposing to cover some expenses for a U.S. trip by six officials of an Asian government. The DOJ based its opinion on the requestor’s representations, consistent with the FCPA’s promotional expenses affirmative defense, […]
It Misused Affirmative Defense For Promotional Expenses Lucent Technologies Inc. settled U.S. Foreign Corrupt Practices Act charges with the Department of Justice and the Securities and Exchange Commission for $2.5 million. The settlement includes a $1 million criminal fine and $1.5 million in civil penalties. Lucent’s violations involved promotional expenses for Chinese government officials. […]
[…] reimburse them. But because most media outlets in the PRC are state-owned, the journalists are “foreign officials” under the Foreign Corrupt Practices Act. That means paying their expenses might violate the FCPA. Facing this dilemma, foreign companies either don’t pay the journalists anything and pass up domestic press coverage for their events in China, […]
When it comes to global bribery laws and FCPA compliance, travel and entertainment expenses and the reimbursement process are enormously meaningful in many ways. So how can you make sure that your risk, compliance, and audit departments are properly tracking these processes and effectively mitigating risk?