By Erin Geiger Smith
Nov 16 (Reuters) - Guidance provided this week by U.S.
officials on the Foreign Corrupt Practices Act will help
in-house attorneys predict government reactions in certain
situations that arise abroad, but it would be more useful if it
were binding, said the corporate counsels' largest advocacy
The FCPA prohibits U.S.-linked companies from bribing
officials of foreign governments. Companies and advocacy groups
have long felt that there are discrepancies in the law and had
questions about how it was applied, concerns the Justice
Department and the Securities and Exchange Commission issued the
guidelines to address. (Reuters reported on the issuing of the guidelines on Wednesday.)
In May, the Association of Corporate Counsel organized a
meeting between 19 in-house lawyers and top officials from the
Justice Department and SEC to discuss what companies would like
to see in the guidelines. Following that meeting, the in-house
lawyers provided the government with hypothetical situations
that would help answer questions the lawyers had about the
application of the FCPA. Though the government recrafted some of
the situations, the lawyers' contributions were apparent, said
Amar Sarwal, the chief legal strategist of the corporate counsel
The hypothetical scenarios in the guidelines included
addressing whether taking a foreign official out for drinks or
making a small payment to a director in a foreign country would
violate the FCPA.
Sarwal also praised the discussions of cases where the
government declined to prosecute companies following an
investigation. Evaluating those examples will help in-house
counsel understand what activities and responses are favored by
the Justice Department and the SEC and assure corporations that
the government isn't expecting "a one size fits all compliance
regime," Sarwal said.
The guidance showed, he said, that the government wants to
see that the company evaluated specific transactions and did
what they could reasonably do under the circumstances.
"The hardest thing for in-house counsel is to follow
case-by-case prosecutions and figure out and divine what the
rules may be. It's a lot easier when the guidance is made
proactive," Sarwal said.
On the other hand, there is not a tremendous amount of new
material and the guidance is non-binding. "That is a source of
frustration," he said.
Follow us on Twitter @ReutersLegal | Like us on Facebook