Specifically, the legislation addresses two primary areas for businesses: accounting transparency requirements as per the Securities Exchange Act of 1934, and the bribery of foreign officials. While some provisions are no-brainers, others have left companies scratching their heads, as the lines can often become gray in certain circumstances.
A number of trade groups, as well as the Chamber of Commerce, together wrote a letter recently to law enforcement officials, including the DOJ and SEC, demanding guidance in certain areas regarding the law
The demand comes following the recent request of two Democratic senators of the U.S. Justice Department to give more information about how the law is enforced, so in essence companies required to abide by the law know what to expect.
In 2010, the government collected almost $2 billion in fines from almost two dozen companies, per the FCPA blog.
The companies want answers, not only to avoid fines, but to foster the increase of business.
The companies' demands in its letter, basically, to ‘show them the way' regarding specific situations. For example, how should the law be interpreted in a situation in which an employee at a company controlled by a sovereign wealth fund is considered a “foreign official”?
Per the law, bribes to employees of any “instrumentality” of a foreign government are prohibited; however, that word is not clearly defined, per the letter.
The letter also questions in what situations should flight costs for a business trip be covered, and what types of donations to charities, made in connection to a foreign governments, could be considered a bribe? Companies also want to know, when is it liable for past actions by another company it acquires, even if it performed due diligence regarding that company?
The letter states, in part, per the February 21st
reuters.com article, “U.S. corporations beg clarity on anti-bribery law”: “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.”
Doing business has, with the rest of the world, become increasingly more global. As such, companies are rightfully looking to the government for guidance on the interpretation of the FCPA. The next logical question becomes, should it be updated?
While many have campaigned for changes, the DOJ, at least for the moment, says no. However, there are plans to soon provide information and guidance in the form of the “Lay Person's Guide to the FCPA”.
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