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Food For Thought

Given the enforcement agencies’ interpretations of the FCPA, a wide variety of seemingly routine interactions with “foreign officials” are subject to FCPA scrutiny.

For instance, in February, Tyson Foods, one of the world’s largest processors of chicken and other food items, agreed to resolve an FCPA enforcement action focused on payments to Mexican veterinarians responsible for certifying product for export. As noted in this prior post, the enforcement action involved both a DOJ and SEC component and the total settlement amount was approximately $5.2 million – a figure in addition to the pre-enforcement action and post-enforcement action fees and expenses.

The Tyson Foods enforcement action was an example of yet another recent Foreign Corrupt Practices Act enforcement action dealing with licenses, permits, certifications, and the like.

On January 4, 2011, President Obama signed the Food Safety Modernization Act (“FSMA”) (here for more information).

In a recent piece published by Law360 (“Growing Risk: FCPA Exposure For Foreign Food Food Cos. – March 16, 2011), Foley & Lardner attorneys Lisa Noller (here) and Carmen Couden (here) state that new provisions in the FSMA “unintentionally create foreign bribery risks for foreign importers of food.”

The FCPA risk, the authors note, is all about foreign certifications. The FSMA will require importers of food to have a certification issued by “an agency or a representative of the government of the country from which the article of food at issue originated” that the “article of food complies with applicable requirements” under the FSMA.

As further noted by the authors, “food is often a commodity that cannot wait for clearances – if it does not ship immediately, it spoils and the value is destroyed.”

This dynamic would seem to increase the motivation a low-ranking, poorly paid “foreign official” has to make an improper, extortionate payment related to food certification.

A facilitating payment exempted from the FCPA (at least per the FCPA’s terms – enforcement is separate question) or prosecutable bribe payment?

What type of journey did your banana, scallop – create your own dish – take on its way to the U.S.?

Interesting food for thought.

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