On October 25, 2023, the Department of Justice issued a written opinion, pursuant to the Foreign Corrupt Practices Act (“FCPA”) opinion procedure, in response to a request from a U.S. government contractor. The October 25 opinion concerned whether certain payments the contractor was proposing to make to foreign officials to cover their meals and travel were legal under the FCPA’s anti-bribery provisions. The Department concluded that the payments would not violate those provisions. 

While, based on the facts laid out in the opinion, this conclusion was unsurprising, particularly given the fact that a U.S. government agency would be acting as an intermediary between the contractor and the foreign officials, the opinion nonetheless highlights several good practices in anti-bribery compliance, particularly in the area of “meals, gifts, and entertainment.” These practices included the fact that the contractor determined its policies around making these payments before it knew the names of, or other information concerning, the foreign officials at issue; the fact that the payment amounts corresponded to pre-existing per diem rates (indeed, corresponding to rates used by the U.S. government); and the fact that the contractor planned to keep accounting records to document the payments, its costs and associated cash transactions.

 

The FCPA opinion procedure allows issuers and certain other companies with sufficient ties to the US (known as “domestic concerns” under the FCPA) to obtain an advisory opinion from DOJ as to whether certain specified, prospective–not hypothetical–conduct conforms with the Department's present enforcement policy regarding the FCPA’s anti-bribery provisions. The anti-bribery provisions generally prohibit giving any thing of value to foreign officials to corruptly influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. An FCPA opinion has no binding application to anyone other than the requesting party, and the requesting party can rely on the opinion only to the extent that it has accurately and completely disclosed all relevant facts and circumstances to DOJ.  

In the October 25 opinion, DOJ stated that the government contractor had obtained a task order pursuant to a contract with the U.S. government agency. The task order required the contractor to establish training events in which the contractor, among other things, provided stipend payments to foreign officials to pay for meals not required to be served during the event and driving mileage costs. 

In finding that these proposed payments would not violate the FCPA, the October 25 opinion noted that:

• The stipends were authorized by a particular United States law: the Foreign Assistance Act of 1961, which demonstrated a lack of corrupt intent behind the payments.
  
  
• The contractor will not pay any funds to foreign officials directly but will instead provide currency only to the relevant U.S. Officer, who will then remit the amounts to the foreign officials directly, which, according to DOJ, helped to show the payments were not being made for the purpose “obtaining [or] retaining business.”
  
  
• All stipend payment amounts have been approved, or have been determined and set, by the U.S. Government.  The amounts to be paid are either (i) calculated in relation to the Department of State's Meals and Incidental Expenses (“M&IE”) rates, or (ii) otherwise dictated by the U.S. Embassy in a particular country, based on that country's internal per diem rate.
  
  
• The contractor’s proposed (and U.S. Government-accepted) stipend payments were relatively nominal, between $8 and $40 per day, depending on the location of the training event.
  
  
• The contractor maintains accounting records to document the payments, its costs, and any associated cash transactions, and the contractor provides all documentation and invoices currency payment amounts to the Agency.
  
  
• The contractor received its task order, which calls for the at-issue payments, via a competitive selection process operated by the U.S. Government.  Further, the contractor was not made aware of the names or other information of any foreign officials when it determined the approach and pricing for its task order proposal.     

Again, under the facts and circumstances, DOJ’s conclusion that the payments were permitted is unsurprising, but the opinion is useful because of the best practices it highlights.  It also is the second time in 2023 that an FCPA advisory opinion was issued within two months of the initial request being submitted, which is important timing where the query must be prospective and not hypothetical behavior to qualify under the Opinion Procedure Regulations. 

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