A Surprising Snippet From The Recent Opinion Procedure Release
This prior post highlighted the DOJ’s recent FCPA Opinion Procedure Release (only the third FCPA opinion procedure release since 2014).
In the release, sought by a “child welfare agency based in the United States,” the DOJ stated that it did not intend to take any enforcement action based on information provided by the Requestor regarding certain expenses for two government officials from a foreign country traveling to the U.S. to visit with families that have adopted children from the Foreign Country.
While the overall conclusion of the release was hardly surprising, there was a surprising snippet from the release that could have been handled better by the DOJ.
DOJ Issues FCPA Opinion Procedure Release
The Foreign Corrupt Practices Act when enacted directed the DOJ Attorney General to establish a procedure to provide responses to specific inquiries by those subject to the FCPA concerning conformance of their conduct with the DOJ’s “present enforcement policy.”
Pursuant to the governing regulations of the so-called DOJ Opinion Procedure Release Program, only “specified, prospective—not hypothetical—conduct” is subject to a DOJ opinion. While the DOJ’s opinion has no precedential value, its opinion that contemplated conduct conforms with the FCPA is entitled to a rebuttable presumption should an FCPA enforcement action be brought as a result of the contemplated conduct.
Earlier this week, the DOJ issued this opinion procedure release (dated August 14, 2023). It is only the third FCPA opinion procedure release since 2014.
The Requestor was a “child welfare agency based in the United States.”
An Informative Read
This prior post highlighted the recent acquittal of Damodar Arapakota (founder and former chief executive of Toronto-based Imex Systems) by a Canadian judge of a charge of bribery of a foreign public official under Canada’s Corruption of Foreign Public Officials Act (CFPOA)
The actual decision by the Canadian judge (see here) makes for an interesting read in that the CFPOA (while not a carbon copy of the FCPA) does contain many of the same general elements.
While touching upon other CFPOA elements such as mens rea and the meaning of advantage or benefit under the CFPOA, the main reasons the judge found Arapakota not guilty was due to the lack of nexus between the advantage or benefit (travel expenses) given to the foreign official and the discretionary act performed by the foreign official as well as the judge’s conclusion that the discretionary act performed by the foreign official did not satisfy the CFPOA’s “obtain or retain an advantage in business” element.
The logic, reasoning and rationale of the decision are all FCPA relevant.
DOJ Announces 2020 Criminal Charges Against Individuals In Connection With Alleged Marshall Islands Bribery Scheme
Last Friday, the DOJ announced that two Marshall Island nationals (Cary Yan and Gina Zhou – pictured) arrived in the U.S. after being extradited from Thailand based on 2020 criminal charges that the individuals violated the Foreign Corrupt Practices Act (and other laws) in connection with an alleged scheme to bribe elected officials in the Republic of the Marshall Islands (RMI) in exchange for passing certain legislation.
According to the indictment, Yan and Zhou acted as officers, directors, employees, and agents of a New York City based non-governmental organization (NGO) and, while in New York City and other locations in U.S. territory, to offer and pay bribes to government officials in the RMI to pass certain legislation that would benefit the business interests of Yan, Zhou and their associates.
Herbalife Resolves $123 Million Enforcement Action – Becoming The Latest Company To Resolve A Matter In Connection With Obtaining A Direct Selling Permit In China
In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).
In the latest enforcement action involving another company in the same general industry involving the same general conduct, the DOJ and SEC recently announced (here and here) that Herbalife agreed to pay approximately $123 million to resolve a parallel DOJ and SEC enforcement action. The corporate action follows the DOJ and SEC’s November 2019 enforcement action against former Herbalife China executives Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife).