Bribery is at the core of every FCPA violation, and the form of it is diverse, but generally it is the corrupt payment of money or anything of value to a foreign official in order to obtain or retain business. While the U.S. government has taken a somewhat expansive view of this definition, U.S. courts have interpreted it based on a multitude of factors.
There are exceptions under the FCPA in the form of two affirmative defenses – “the local law defense” and “the reasonable and bona fide expeditures defense” — and one exemption to the FCPA, which is for facilitating payments. The two affirmative defenses are rather straightforward, though rarely viable each for their own reaons.
The local law defense essentially makes a bribe legal if it is expressly permitted by local country laws. Given that few countries create statutory authority for the bribing of their officials, this is a defense that is largely moot. The bona fide expenditures defense places the burden on the defendant to prove that the expenditures were “reasonable and bona fide” for the travel expenses of a foreign official conducting business with the company. The sheer magnitude of many FCPA violations precludes justifying them as anything approximating “reasonable and bona fide”.
Facilitating payments are very much as they sound, labeled as such to distinguish them from corrupt payments. The DOJ’s Guide to the FCPA makes it clear that “Labeling a bribe as a ‘facilitating payment’ in a company’s books and records does not make it one.” So, while conceptually the idea that facilitating payments are an exemption from the FCPA is very much true, the DOJ calls facilitating payments a “narrow exception” that “applies only when a payment is made to further ‘routine government action’ that involves non-discretionary acts.”
The FCPA is a complex law that is very simple at its core, which is that bribery is a bad thing and shouldn’t be tolerated by global corporations. Whistleblower Justice Network has an international team of FCPA experts fully-versed in the varied issues that arise related to the Foreign Corrupt Practices Act. WJN works alongside our clients, with our compensation being 100% success-based, to guide them through every aspect of how to report FCPA violations to the SEC Whistleblower Program.
If you have significant information about FCPA violations, Whistleblower Justice Network can help you become a successful whistleblower under the SEC Whistleblower Program. Our clients benefit from our expertise, extensive relationships and 20+ years of combined experience as whistleblowers. Contact us today for your free, 100% confidential consultation.