Another FCPA Opinion Procedure Release on Corporate Hospitality

The Department of Justice released the latest Opinion Procedure Release on the Foreign Corrupt Practices Act. The releases are great tool to help you figure out if a proposed corporate action could lead to an enforcement action. Anyone with an interest in the FCPA looks to the existing body of opinion releases as a way to help understand the DOJ’s interpretation of the law and what corporate actions are acceptable, which are risky and which are forbidden.

This opinion request came from an adoption agency. So maybe there is an interesting twist to their corporate behavior that could offer an interesting new perspective on the FCPA.

Unfortunately FCPA Opinion Procedure Release 11-01 (.pdf) covers no new ground. In fact the fact pattern is nearly identical to those presented in the FCPA Opinion Procedure Release 2007-01 and 2007-02.

At best the release once again lays out best practices for corporate hospitality:

  • Let the government agency pick who will come.
  • No spouses or family members on the trip
  • Pay costs directly to providers
  • No cash to the government officials
  • Souvenirs should be of nominal value and/or have the corporate logo
  • Don’t fund side trips or leisure activities
  • Focus the function on educating the visiting officials about the operations and services of your company

These best practices were in the old opinion releases. Howard Sklar scratched his head over why the requestor went through the trouble and expense of getting this opinion release.  I share the same thoughts. The fact pattern was not a close call. Anyone who could spell FCPA should have been able to find the releases. The DOJ has all of the FCPA Opinion Procedure Releases published on their FCPA website.

Maybe it was the nature of the requestor: and international adoption agency. I would guess that the government officials are from either Russia or China, two countries with an international reputation for bribery and corruption.

From what I’ve heard from some friends, there are often numerous shakedowns and cash requests made on the adoptive parents during the international adoption process.  Obviously, the parents are in an emotionally fragile state when heading overseas to adopt. They are likely in a country that is unfamiliar to them, lost in a fog of foreign languages. Could some of those “gifts” be bribes and could some of the recipients be foreign officials? Sure.

There have been big headlines about FCPA enforcement actions in the US and the coming rise of enforcement under the UK Bribery Act. The adoption agency should be concerned that its activities could be in violation of these laws.

International adoption agencies also have a larger moral question to consider. To the extent they are making payment or encouraging the adoptive parents to make payments, their activities start to look more like baby buying. If the activity is more wholesale, you end up looking like a baby farmer. I think more people are concerned with that moral question, than the legal question of bribery.

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  1. Adoption and the FCPA – Compliance Building - November 1, 2012

    […] sounds familiar because the Department of Justice dealt with very similar issues last year in Release 11-01. This year’s request sounds like there will be a bit more entertainment involved, but nothing […]