On August 14, 2020, the Division of Justice (DOJ) issued its first Overseas Corrupt Practices Act (FCPA) Opinion Process Launch in six years. Within the opinion, DOJ suggested that it might not carry an enforcement motion in opposition to a U.S.-based funding adviser if the agency moved ahead with paying an advisory charge to a international funding financial institution owned by a international authorities as a result of the “FCPA doesn’t prohibit funds to international governments or international authorities instrumentalities,” and DOJ discovered no corrupt intent to affect a international official.
The advisory opinion doesn’t break new floor. Like all Opinion Process Releases, this one was restricted to the query of whether or not the fee would advantage enforcement motion beneath FCPA’s anti-bribery provisions. Funds directed to international authorities entities reasonably than particular person international officers should generate legal responsibility beneath the FCPA’s accounting provisions if inaccurately recorded, because the Oil-for-Meals Program settlements a decade in the past made clear.
Underneath 28 C.F.R. § 80.1, home issues might “acquire an opinion of the Legal professional Basic as as to if sure specified, potential – not hypothetical – conduct conforms with the Division’s current enforcement coverage concerning the antibribery supplies of the Overseas Corrupt Practices Act…” A multinational funding adviser headquartered within the U.S. submitted its opinion request to the DOJ on November 5, 2019, and supplied supplemental info at DOJ’s request between January and July 2020.
In 2017, the funding adviser sought to buy a portfolio of belongings from a international funding financial institution and engaged a international subsidiary of the identical financial institution to help with the acquisition. A international authorities is an oblique majority shareholder within the financial institution. After the profitable buy of belongings, the financial institution subsidiary that assisted with the acquisition sought $237,500 —0.5% of the worth of the portfolio acquired — as compensation for its providers. As a result of the financial institution is majority-owned by a international authorities, the purchaser sought an opinion from DOJ as as to if the fee would end in an enforcement motion beneath the FCPA.
DOJ’s willpower that the proposed charge fee wouldn’t run afoul of the FCPA was based mostly on three principal issues. First, the fee at subject is to be made to an entity, to not a international official. Second, though the financial institution is not directly owned by a international authorities, there isn’t any indication that the funding adviser intends its fee to the international funding financial institution to be diverted to corruptly affect a person official. Lastly, the international funding financial institution supplied “particular, respectable providers” to the funding adviser, and the financial institution subsidiary’s compliance officer licensed that the fee “is commensurate with the providers that [the bank] supplied and is commercially affordable.”
It stays to be seen whether or not the advisory opinion heralds a resurgence in the usage of DOJ’s Opinion Process Launch program, significantly given the nine-month wait between submission of the request on this case and launch of DOJ’s opinion.