A Look At The FCPA’s Facilitation Payments Exception
The FCPA’s legislative history teaches that in passing the FCPA Congress intended to capture only a narrow category of payments and chose not to capture so-called facilitating payments given the difficult and complex business conditions encountered in many foreign countries.
Congressional leaders spearheading enactment of the FCPA were clear as to the scope of the law they envisioned.
For instance, Senator Church stated:
Domestic Bribery Alleged In Connection With Fire Department Inspections
Unlike the FCPA’s anti-bribery provisions, 18 USC 666 (Theft or bribery concerning programs receiving Federal funds) does not contain an express facilitation payment exception which exempts conduct to “expedite or secure the performance of a routine governmental action” defined to include “obtaining permits, licenses, or other official documents.”
Even though the FCPA contains such a provision, and even though Congress explained in the legislative history that the FCPA would not reach “payments made to secure permits, licenses, or the expeditious performance of similar duties of an essentially ministerial or clerical nature which must of necessity by performed in any event,” many FCPA enforcement actions in the modern era of enforcement do indeed involve licenses, permits, and the like.
A recent domestic bribery enforcement action – invoking 18 USC 666 – concerns similar conduct.
A Reminder Why Congress Chose To Exempt Facilitating Payments From The Reach Of The FCPA’s Anti-Bribery Provisions
The State Department recently released Investment Climate Statements for Dominican Republic and Bosnia and Herzegovina.
Information in the statements provide a nice reminder why Congress chose to exempt facilitation payments from the reach of the FCPA’s anti-bribery provisions and how many of the same conditions motivating Congress to exempt facilitation payments from the FCPA nearly 50 years ago are still present today.
The Dominican Republic statement notes:
Interesting Issues To Ponder
Several notable Foreign Corrupt Practices Act enforcement actions have involved conduct in Haiti including U.S. v. Kay and U.S. v. Esquenazi.
The Esquenazi enforcement action concerned the telecommunications sector in Haiti.
Reading the news with “FCPA goggles” on is – for me – an occupational hazard of sorts.
So it was with a recent Wall Street Journal article titled “Amid Haiti’s Mayhem, Phones Keep Working.”
Dear FCPA Blog: Please Stop Spreading FCPA Misinformation
Call me old-fashioned, but when you voluntarily run a website devoted to a specific law (and have numerous paid advertisers with blinking and flashing ads placed on your website) you ought to have a basic obligation to get things right about that specific law. This includes being knowledgeable about the rather limited case law that exists regarding specific topics relevant to the specific law that is the focus of your website.
Nevertheless, the FCPA Blog is at it again with its FCPA misinformation.
This post, about the FCPA’s facilitation payment exception, states: “The burden of proof is always on the one asserting the exception as a defense.”
This is false.