FCPA Opinion Procedure Release 07-02

FCPA Opinion Procedure Release 07-02 comes from a U.S. insurance company regarding the payment of expenses for foreign government officials coming to the U.S. for an educational program. The DOJ found the promotional expenses to fall within the promotional expenses affirmative defense of being reasonable under the circumstances and relate to the promotion, demonstration or explanation of the the product or service (15 U.S.C. § 78dd-2(c)(2)(A)).

The Requestor represented:

  • The Requestor will not pay any expenses related to the foreign officials’ travel to or from the United States, or their participation in the NAIC internship program.
  • The Requestor has no non-routine business under consideration by the relevant foreign government agency.
  • The Requestor’s routine business before the relevant foreign government agency consists primarily of reporting of operational statistics, reviewing the qualifications of additional agents, and onsite inspections of operations. Such routine business is guided by administrative rules with identified standards.
  • The Requestor’s only work with other entities within the foreign government consists of collaboration on insurance-related research, studies, and training.
  • The Requestor will not select the particular officials who will travel. That decision will be made solely by the foreign government.
  • The Requestor will host only the designated officials, and not their spouses or family members.
  • The Requestor intends to pay all costs directly to the providers; in the event that an expense requires reimbursement, the Requestor will only do so, up to a modest daily minimum, upon presentation of a written receipt.
  • Any souvenirs that the Requestor gives the visiting officials would reflect Requestor’s business and/or logo and would be of nominal value, e.g., shirts or tote bags.
  • Apart from the expenses identified above, the Requestor will not compensate the foreign government or the officials for their visit, nor will it fund, organize, or host any other entertainment, side trips, or leisure activities for the officials, or provide the officials with any stipend or spending money.
  • The training visit will be for a six-day period (five days of training plus travel time), and costs and expenses will be only those necessary and reasonable to educate the visiting officials about the operation of a U.S. company in the Requestor’s industry.
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