The Foreign Corrupt Practices Act (FCPA) advisory opinion procedure allows domestic companies and companies listing securities on a U.S. national exchange to request an opinion from the U.S. Department of Justice (DOJ) on "whether certain specified, prospective—not hypothetical—conduct conforms with [the FCPA's] antibribery provisions." 28 C.F.R. 80.1. A "Requestor" that obtains an opinion condoning the prospective conduct is entitled to a rebuttable presumption that the conduct is in compliance with the FCPA. 15 U.S.C. §78dd-2(f). On Aug. 14, 2020, the DOJ issued an FCPA opinion (the Opinion) to an unnamed multinational investment advisory firm. It was the first FCPA advisory opinion issued in six years, and its release raised eyebrows in the legal and international business communities. The Opinion shed some light on circumstances in which the DOJ would consider a payment to a foreign-government-owned company to be a violation of the FCPA. While the Opinion may have been helpful to the requesting company, its usefulness to other companies is severely limited for a variety of reasons. More generally, using the FCPA advisory opinion procedure remains impractical and potentially even unwise in many circumstances.

The Aug. 14, 2020 Opinion

The Opinion itself concerned a domestic company that bought assets from a subsidiary of a foreign bank and was assisted in that transaction by a different subsidiary of the same foreign bank. A majority of shares of the foreign bank was owned by a foreign government. The domestic company requested an opinion as to whether payment to the assisting subsidiary for its role in facilitating the transaction would violate the FCPA.

Answering in the negative, the DOJ noted that the payment was to be made not to a government official, but to the subsidiary company for specific, legitimate services. One important takeaway from the Opinion is its focus on the distinction between payment to an individual and to an entity. Companies should have this distinction in mind in carrying out overseas transactions, and should take steps to ensure potentially questionable payments are made at the corporate level and that the payment will not thereafter be diverted to any individual. For example, in the Opinion, the DOJ noted that the payee foreign bank had certified to the Requestor that the funds would be used only for the benefit of the subsidiary office for general corporate purposes and would not be forwarded to any individual.