FCPA Opinion Release Provides Guidance on Payment of Travel and Other Expenses for Foreign Government Officials

BY MICHAEL VOLKOV · AUGUST 30, 2023

The Justice Department’s Opinion Release procedure has provided important guidance over the years.  The library of Opinion Release letters is well-organized and accessible to the legal and compliance community.

In its most recent Opinion Release, 23-1, DOJ affirms its prior determinations and sets forth some best practices governing payment for foreign official travel and related expenses. The focus of the Opinion Release is the FCPA’s affirmative defense covering “reasonable and bona fide expenditure[s], such as travel and lodging expenses, incurred by or on behalf of a foreign official . . . directly related to . . . the promotion, demonstration, or explanation of products or services.” 15 U.S.C. § 78dd-2(c)(2)(A).

The Requestor is an adoption service provider that is authorized to provide adoption services in a foreign country.  The Central Authority for Adoption of the foreign country informed the Requestor of a new requirement that foreign officials from the adoption authority visit some families that have adopted children from the foreign country each year to ensure the success of the adoptions.

To satisfy the new requirement, the Requestor proposed to pay for certain expense for two government officials from the foreign country for a five-day trip to Massachusetts, New York and Washington, D.C.  The two officials will be chosen by the foreign country adoption agency and will meet with families and their adopted children, as well as the Requestor’s leadership to learn more about the Requestor’s policies and procedures for adoptions.

With respect to the specific travel arrangements, the Requestor represented that:

(1) Requestor will pay directly to providers for economy class airfare, domestic lodging at a mid-range hotel, local transportation and meals (some with the adopted child’s family);

(2) Requestor will arrange and pay directly to the provider for certain recreation (e.g., visit to museum or city tour) with cost not exceeding $100 per person.  Any souvenirs provided to the foreign officials will be of nominal value;

(3) Requestor has no non-routine business under consideration by the foreign government adoption agency;

(4) Requestor will not select the specific foreign officials to travel.  The foreign country agency will select the officials to travel. No spouses or family members will accompany the foreign officials.

(5) Requestor will not pay the foreign officials any other compensation or provide any cash or stipend. Also, Requestor will not pay any additional money to the foreign government or any other entity in connection with this trip.

In approving the Requestor’s application, DOJ cited two prior Opinion Releases,  FCPA Opinion Release 11-01 and FCPA Opinion Release 12-02, which address sponsoring travel and related expenses for foreign officials.

In FCPA Opinion Release 11-01, DOJ declined to take enforcement action if the adoption services provider sponsored expenses for a trip of foreign government officials. Including international airfare, lodging, local transportation and meals.  The purpose of the trip at issue was to educate foreign officials on the services offer by an adoption services provider.  The expenses would be paid directly to vendors and no cash or other compensation would be paid to the foreign officials.

In FCPA Opinion Release 12-02, DOJ declined to take enforcement action where adoption agencies proposed to pay expenses for a trip by 18 foreign government officials, including travel, lodging, meals, local transportation and entertainment events of nominal cost involving families who had adopted children from the foreign country. The purpose of the trip was to educate the foreign officials about the services provided  by the adoption agencies and for the officials to meet with families who adopted children from the foreign country. The purpose of the trip was to educate the visiting officials  about the U.S. operations and services provided by U.S. adoption agencies.