The next area for policies is extortion payments, which are completely exempted out of the FCPA. Extortion payments are made for any action which threatens or demands payment for life, liberty, or health. These should be exempted out from your facilitation payments and your compliance program through specific language. You need to do this for a variety of reasons. First and foremost, your employees must understand that the company will support them if they are in any way threatened with harm, with arrest, physical detention or their health/safety is threatened.  As a compliance professional, you need to make sure employees understand they need to do whatever they must to get themselves out of such a situation.

Some of the situations your employees might face are along the lines of the following:

  • Employees are stopped by police, military or paramilitary personnel, or militia (uniformed or not) at designated or other checkpoints or other places and a payment is demanded as a condition of passage of persons or property;
  • Employees are threatened with arrest or detainment; or
  • Employees are asked by persons claiming to be security personnel, immigration control, or health inspectors to pay for an allegedly required inoculation or other similar procedure.

I once had a situation where an employee was threatened with receiving a vaccination for yellow fever when they were departing a west African country. The employee paid some $85 to get out of that situation. I instructed him to submit it as a travel expense, writing out in a four sentence paragraph the event, attached to his expense report. The documentation proved that payment was not a facilitation payment. It was clearly an extortion payment.

The key though is that it be properly documented. But more than simply the documentation is that you must specifically list extortion payments in your books and records so you will in compliance with the books and records requirement of the FCPA to accurately record your expenses. You need to train your employees specifically on the actions to take both when they are put in the situation and what to do when they return to their office. In your policy state that if there is a threat to health safety or liberty, it is not a facilitation payment but an extortion payment. Make sure that they understand what their rights are and what their obligations are to report it when they come back to the corporate office or their office. Always remember, an extortion payment is not a FCPA violation.

Three Key Takeaways

  1. Extortion payments are not illegal under the FCPA?
  2. Was the action an extortion or some other type of situation?
  3. Document Document Documents your extortion payments both the financial component and a description of the underlying events.

This month’s sponsor is the Doing Compliance Master Class. In 2018, I am partnering with Jonathan Marks and Marcum LLC to put on training. Look for dates of one of the top compliance related training going forward.