WASHINGTON, Feb 21 (Reuters) - U.S. corporations asked
the government to explain what it considers a bribe of a foreign
official, saying the lack of clarity has had a chilling effect
on business.
The Chamber of Commerce and dozens of other trade groups
wrote a letter Tuesday to law enforcement officials laying out
the guidance they want regarding the Foreign Corrupt Practices Act, which bars such bribes.
The letter comes days after two Democratic senators urged
the U.S. Justice Department to provide information about how it
enforces the law to offer more "predictability" to companies
subject to it.
The U.S. government has stepped up its enforcement of the
FCPA, extracting $1.8 billion in sanctions from 23 companies in
2010, according to an industry blog, the FCPA Blog.
However, the government has also experienced some recent
setbacks in court on FCPA cases and has also promised to update
its guidance on the law.
In its letter, the chamber and other groups ask for bright
lines that companies should stay within for specific scenarios.
They ask, for example, whether there are instances when an
employee at a company controlled by a sovereign wealth fund is
considered a "foreign official".
The law prohibits bribes to employees of any
"instrumentality" of a foreign government, but fails to clearly
define that word, the letter said.
They also want to know in what instances covering flight
costs on a business trip, or making donations to charities
connected to foreign governments could be considered a bribe.
And they asked under what circumstances a company is liable
for past actions by another company it acquires, even if it did
its due diligence on that corporation.
"The threat of successor liability even if a thorough
investigation is undertaken prior to a transaction has had a
significant chilling effect on mergers and acquisitions," the
groups said in their letter to the Justice Department and the
Securities and Exchange Commission.
Law enforcement officials are pursuing several high-profile
investigations, including one into whether Avon Products used
bribes to win the first-ever license given by China to a Western
company to sell products door-to-door.
The SEC is also looking into Wynn Resorts' $135 million donation to the University of Macau and its gaming licenses in
the Chinese gambling hub.
However, the department has recently been on the defensive
after setbacks in some high-profile FCPA cases at trial.
Earlier on Tuesday, the DOJ moved to dismiss charges against
more than a dozen defendants in one of its biggest bribery cases
in the military equipment business, after prosecutors were
unable to convince two juries that what the executives did was
illegal.
NEW GUIDANCE COMING
In the past year the U.S. Chamber of Commerce has led a
campaign to amend the 1970s-era law, and several senators have
expressed support for legislative changes.
The Justice Department has said it would not support any
legislation to change the law, but Lanny Breuer, who heads the
department's criminal division, promised in a November speech
the agency would soon offer "detailed new guidance" on the
criminal and civil enforcement provisions of the law.
In addition to the guidance, expected in the form of updates
to a document called the "Lay Person's Guide to the FCPA," the
groups asked the agencies to publish information about those
cases it decides not to prosecute.
The Justice Department is considering releasing that
information, people familiar with the matter said.
(Reporting By Aruna Viswanatha)
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