Prior to the 2012 FCPA Guidance, the DOJ issued two 2007 Opinion Releases which offered guidance to companies considering whether, and if so how, to incur travel and lodging expenses for government officials. Both Opinion Releases laid out the specific representations made to the DOJ, which led to them to approve the travel to the U.S. by foreign governmental officials. These facts provided strong guidance to any company which seeks to bring such governmental officials to the U.S. for a legitimate business purpose. In Opinion Release 07-01, the company was desired to cover the domestic expenses for a trip to the U.S. for a six-person delegation of the government of an Asian country for an educational and promotional tour of one of the requestor’s U.S. operations sites. In 07-02, the Company desired to pay certain domestic expenses for a trip within the U.S. by approximately six junior to mid-level officials of a foreign government for an educational program at the Requestor’s US headquarters, prior to the delegates attendance at an annual six-week long internship program for foreign insurance regulators sponsored by the National Association of Insurance Commissioners (NAIC).
When Walmart Inc., Hewlett-Packard Company (HP) or GSK are in the news for alleged FCPA violations, it provides you a good reminder to review your compliance program. Not only from your compliance procedures perspective, but to test to determine if the policies and procedures are being followed or if there are issues which you might need to look at more closely.
Three key takeaways:
- Travel for foreign officials continues to plague companies for compliance violations.
- The key is being reasonable in your costs.
- Always remember to record travel expenses correctly based upon documented costs.