DOJ and SEC Update FCPA Resource Guide for First Time Since 2012

The U.S. Department of Justice’s (“DOJ”) Criminal Division and the U.S. Securities and Exchange Commission (“SEC”) recently released the second edition of A Resource Guide to the U.S. Foreign Corrupt Practices Act (“Resource Guide”). First published in November 2012, the Resource Guide provides detailed information about the DOJ and SEC’s interpretation of the Foreign Corrupt Practices Act (“FCPA”) and their enforcement of it. The Resource Guide is an instructive tool for in-house counsel and compliance and audit departments to understand the government’s view and enforcement of the FCPA.

The recent changes to the Resource Guide reflect the changing legal landscape, including decisions from the U.S. Supreme Court and other courts. In particular, the Resource Guide has updated its guidance on the applicability of the statute to foreign “agents” in light of the Second Circuit’s decision in United States v. Hoskins. The Resource Guide also discusses disgorgement and references the Supreme Court’s holdings in Kokesh v. SEC, which held that civil disgorgement is subject to a five-year statute of limitations, and SEC v. Liu, which held that disgorgement is permissible when it does not exceed a wrongdoer’s net profits and is distributed to victims.

The Resource Guide was also updated to reflect significant DOJ policy changes since 2012. The changes reflect the DOJ’s consideration of the maturation of a company’s corporate compliance efforts. A program that improves by responding to lapses and new risks with appropriate enhancements will be given more favorable treatment. In addition, the updated guidance demonstrates the agencies’ increased attention to robust accounting controls and commitment to bringing enforcement actions for internal controls violations even in the absence of foreign bribery offenses, a shift in policy since the 2012 publication of the original edition.

The Resource Guide specifically references several noteworthy DOJ policies, such as the FCPA Corporate Enforcement Policy, which provides transparency regarding the credit a company will receive for self-reporting and fully cooperating with DOJ, and the Evaluation of Corporate Compliance Program, which provides guidance to prosecutors in evaluating the effectiveness of a company’s compliance program. In addition, the Resource Guide provides clarity regarding corporate successor liability under the FCPA, recognizing that, in certain instances, robust pre-acquisition due diligence is not feasible and explaining that the DOJ and SEC will consider the thoroughness of integration efforts, due diligence, and voluntary disclosure in deciding whether to take action against a successor company for conduct that occurred at the predecessor company.

Although it is non-binding and informal, the Resource Guide is an important one-stop resource for companies and practitioners on FCPA-related matters. Nonetheless, companies facing potential FCPA issues should rely on experienced counsel to help them navigate these complex issues. If you have any questions, please do not hesitate to contact any member of Ice Miller’s White Collar Defense & Investigations Group for assistance.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. It speaks only to guidance available as of May 13, 2020. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.