Foreign Corrupt Practices Act
You need help locating and preparing office and lab space in country Z related to the implementation of a sponsored project. In the course of a conversation with a colleague from that country, she recommends you hire the “B Company”. Is there any risk in such a simple and common scenario? Consider these questions.
- Does your colleague qualify as a foreign official? She may if she works for a state-owned institution or company, if she serves as an advisor to a ministry, government agency, or government official, is a member of a government panel, or otherwise qualifies under the FCPA’s definition of foreign official.
- Do you have any business (existing, pending or planned) in country Y over which your colleague may have influence or decision? For example, will you need a government license or permit and does this colleague have any influence over whether that license or permit is granted?
- Who is the vendor? Is it substantially owned or controlled by your colleague or another foreign official? Is it qualified to perform the service?
It is important to know the answers to these questions before acting on the recommendation. If your colleague does qualify as a foreign official, is in a position to exert influence in your favor with respect to a business opportunity in that country, and/or can be shown to benefit by your hiring of that vendor, the scenario qualifies as a possible violation of the FCPA.
Review the section on managing risk, which includes tips on conducting due diligence before engaging a vendor, agent, or partner. If you have questions or concerns about a transaction with a non-U.S. party, contact the Office of the General Counsel for guidance.