Foreign Activity Operations Guide

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Foreign Corrupt Practices Act (FCPA)

The FCPA is enforced by the U.S. Department of Justice, and in the University context relates primarily to anti-bribery restrictions. The FCPA prohibits payments or gifts of "anything of value" to a foreign official for the purpose of influencing the official to give business or to obtain an improper advantage in securing or retaining business. A "foreign official" could include any employee or contractor of a foreign government. Note that individuals employed by foreign universities could be characterized as "foreign officials" under the FCPA. It is also unlawful to make a payment to a third party knowing that all or a portion of the payment will go to a "foreign official".

The FCPA contains one exception and two affirmative defenses that may apply to University business. The exception provides for a facilitating payment to a foreign official to obtain execution on a "routine governmental action." This exception typically applies to common governmental actions such as the issuance of a visa, permit or license or loading or unloading of cargo. This exception does not include any decision by a foreign official to award new business or continue business with a particular party.

The first affirmative defense under the FCPA allows for the payment or gift to occur provided that it was "lawful under the written laws and regulations of the foreign official's country". This exception is extremely restricted since most such gifts or payments are generally not permitted under local law. The second defense may be used more frequently in University business and allows for payment of "a reasonable and bona fide expenditure," such as travel and lodging expenses directly related to the promotion, explanation or demonstration of a University's services or the execution or performance of a specific contract. This would likely be applied in cases of gifts of nominal value and reasonable hospitality expenses incurred at Stanford for a foreign official. However, lavish meals and accommodations for the official and his or her family members may present a problem under the FCPA.

The FCPA is open to interpretation, based on facts and circumstances. The U.S. Attorney-General is required by law to respond to requests for specific guidance. Please contact the Office of the General Counsel if you have specific concerns regarding compliance with the FCPA. For general information, visit the United States Department of Justice web site.