World Tours and the Summer Olympics: Recent Pitfalls Under the Foreign Corrupt Practices Act in the Areas of Gifts, Entertainment, and Travel
2016; The MIT Press; Volume: 21; Issue: 2 Linguagem: Inglês
ISSN
1532-303X
Autores Tópico(s)Business Law and Ethics
ResumoINTRODUCTIONThe spring of 2015 bloomed two major Foreign Corrupt Practices Act (FCPA) cases involving the areas of gifts, entertainment, and travel.1 In April 2015, the Securities and Exchange Commission (the SEC) brought forth the case of In the Matter of FLIR Systems, involving FCPA violations concerning the financing of a world tour of personal travel for government officials.2 In May 2015, the SEC filed the case of In the Matter of BHP Billiton, involving FCPA violations concerning the sponsored attendance of officials at the 2008 Summer Olympics.3 These cases affirm previous guidance by the SEC and the Department of Justice (the DOJ) that gifts, entertainment, and travel given for corrupt and improper purposes violate the FCPA.4 These cases also signify active involvement by United States regulators in pursuing violations under the FCPA for improper conduct concerning hospitality.Companies operating on an international basis need to be wary and vigilant about compliance with the FCPA in the area of hospitality. Companies need to sure that they have proper compliance policies and procedures, as well as robust internal controls in place to combat high-risk activities involving hospitality and officials. They also need to sure that such policies and procedures and internal controls are properly implemented so as to protect them from liability under the FCPA.This Article will address issues involving the hospitality area in relation to the enforcement of and compliance with the FCPA. Part I provides an outline of the FCPA, and emphasizes the affirmative defense for certain and bona fide expenditures under the statute. Part II looks at formal and informal guidance on gifts, entertainment, and travel as these subject matters relate to the FCPA. Part III discusses the recent FLIR and BHP Billiton cases. Part IV then provides what the author believes to be key takeaways from these cases and other recent FCPA cases. Finally, Part V discusses FCPA compliance measures that the author believes should be undertaken in the areas involving gifts, entertainment, and travel.I. The FCPAThe FCPA establishes civil and criminal liability for the bribery of government officials in order to obtain or retain business.5 The anti-bribery law can be divided into accounting and anti-bribery prohibitions.6A. THE GENERAL STATUTEThe FCPA accounting provisions require that domestic and companies with securities publicly traded in the United States properly report any relevant bribes.7 More specifically, the accounting provisions require that issuers, companies that have a class of securities registered with the SEC or are required to file reports with the SEC, maintain certain recordkeeping standards and internal accounting controls.8 The recordkeeping standard requires that issuers make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.9 The internal controls provision requires that issuers create a system of internal accounting controls that provide assurances that transactions are executed in accordance with management's general or specific authorization.10The FCPA anti-bribery provisions prohibit the bribing of government officials for the purpose of obtaining or retaining business, directing business to other persons, or securing any improper advantage.11 More specifically, the FCPA anti-bribery provisions prohibit:(1) any issuer, domestic concern, or any person acting within U.S. territory, or any officer, director, employee, agent, or stockholder acting on behalf of any of the foregoing;(2) from using any means or instrumentality of U.S commerce corruptly in furtherance of;(3) an offer, payment, or promise to pay, or authorization of the payment of anything of value;(4) to (a) any foreign (b) any political party or party official, (c) any candidate for political office, (d) any public international organization official, or (e) any other person while knowing that the payment or promise to pay will be given to any of the foregoing;(5) for the purpose of (a) influencing any act or decision of that person in his or her official capacity, (b) inducing that person to do or omit to do any act in violation of his lawful duty, (c) securing any improper advantage, or (d) inducing that person to use his influence with a government to affect or influence any government act or decision;(6) in order to assist such issuer, domestic concern, or person acting within U. …
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