FCPA Opinion Procedure Releases – An Oft-Forgotten Resource

This article was republished with permission from FCPAméricas Blog, for which Matteson Ellis is founder, editor and regular contributor.

At the end of 2013, the DOJ issued its only Opinion Procedure Release of the year. A law firm partner used the opinion process to ask whether he or she would violate the FCPA by paying the medical expenses of the daughter of a foreign official of a country that his firm represented. The official’s daughter had a severe medical condition that could not be treated in her own country.

The request specified that payments would be made directly to the hospital and that both the lawyer and the official had disclosed the payments to their respective employers. The foreign official also had no past, present or future role in the selection of the law firm by the country for legal matters. Based on these and other factors, the DOJ responded that the payment would not constitute an FCPA violation since it lacked corrupt intent.

Opinion Procedure Releases

The DOJ provides guidance like this through an official mechanism, pursuant to 28 C.F.R. Part 80, by which companies and individuals can seek guidance on whether or not a contemplated action would violate the FCPA. Since 1993, the DOJ has issued 37 opinion procedure releases, indexed in specific categories. It issued similar guidance under a different process prior to 1993.

The opinions are limited in their applicability. They apply only to the parties included in the request. And they are not binding – they merely create a rebuttable presumption about the status of the conduct under the FCPA. Nonetheless, the opinions do provide helpful insights into how officials analyze specific factual scenarios.

How useful are opinion procedure releases?

There are pros and cons to seeking guidance through this process. On one hand, opinions provide a significant degree of certainty for the requesting party, even though they are not binding. For instance, if the lawyer who received the 2013 guidance follows the guidance provided, it is hard to imagine that the DOJ would investigate. Moreover, the DOJ would be hard-pressed to allege corrupt intent to establish an anti-bribery violation under the FCPA. And if the opinion procedure release had said the activity would violate the FCPA, the process would have helped the lawyer avoid a potentially burdensome and costly FCPA investigation.

But critics of the process state that it can take time. Under the regulations, the DOJ has 30 days after receiving complete information about the request to issue its opinion. If it determines it needs more information after the initial submission, it can respond within 30 days with the request, thereby delaying the process. For example, the request for the 2013 opinion was submitted on October 15th and the opinion was not issued until more than two months later. In some circumstances, this back and forth can make the guidance moot by the time it is received – consider the effect of a delay if the official’s sick daughter had to receive the procedure urgently.

Opinions also put the requestor at the mercy of the DOJ – as a colleague of mine puts it, opinion releases are a way of “throwing yourself on the sword” of the DOJ. Specifically, the opinion procedure release does not allow the requestor to plead a case as he might in court, and the DOJ is likely to take a conservative stance. On the other hand, relatively few FCPA cases go to court, and the relatively unfettered discretion of enforcement agencies would still be at play in an FCPA settlement.

When should you seek an opinion?

This is not an easy question to answer. But it is helpful to consider the following: is the issue a gray area, and would the DOJ think it is gray, too? Do you have the time to wait for an answer? Are you particularly sensitive to the reputational risks associated with an investigation? Would you be willing to defend the action in court?

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