From time to time, an issue appears in the news which demonstrates how some conflate the Foreign Corrupt Practices Act (the actual statute) and how the FCPA is enforced by the DOJ / SEC.
For instance, as highlighted here, Louis Sola (the newly appointed head of the Federal Maritime Commission) recently commented how China has an unfair advantage at the Panama Canal compared with U.S. companies. Among other things, Sola noted that corruption remains the biggest problem in Panama and he stated:
“I believe the Chinese have a better ability to discuss a lot of these things with their Panamanian counterparts than the United States do. What I mean by that is U.S. companies are hindered drastically by the Foreign Corruption Practice Act. So if the lights go out and I have to call somebody at 12 o’clock at night to come over and turn on my terminal; I cannot buy that person pizza under the Foreign Corrupt Practice Act. We definitely have to ease some of our regulations so that we’re able to able to compete internationally.”
In recent years, has there been corporate FCPA enforcement actions which have included allegations or findings about nominal things of value such as beer, wine, flowers, and cigarettes?
Yes and one can view these “add-on allegations” (in other words it was not the only conduct at issue in the enforcement action) in two ways: (1) the DOJ/SEC were practicing their typing skills by including these allegations in the enforcement action; or (2) the DOJ/SEC included these allegations in the enforcement action to send a message to the corporate community about things of value that should be on the FCPA radar.
However, the notion that providing a pizza to a port official at midnight “to come over and turn on my terminal” is a violation of the FCPA’s anti-bribery provisions is far-fetched.
Yes, pizza is a thing of value and a port official would likely be considered a foreign official under the FCPA.
However, is there corrupt intent in this simplistic scenario. In other words, is there an evil motive or purpose (as Congress explained in the FCPA’s legislative history)?
Is the thing of value provided to a foreign official to:
(i) “influenc[e] any act or decision of such foreign official in his official capacity, (ii) induc[e] such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) secur[e] any improper advantage; or
(ii) induc[e] such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,
in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person?
The exception applies to any “facilitating or expediting payment to a foreign official … the purpose of which is to expedite or to secure the performance of a routine governmental action” with routine governmental action defined to mean “an action which is ordinarily and commonly performed by a foreign official” including “providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products or commodities from deterioration; or actions of a similar nature.”
