March 30, 2015 | Industry Insights

Facilitation Payments Still Permitted Under FCPA

Share This:

“Facilitation payments” made to customs officers are common in some parts of the world, and, strictly speaking, they don’t violate the U.S. Foreign Corrupt Practices Act (FCPA). But there are complications. The Securities and Exchange Commission published guidance on the issue that states, “The FCPA does not apply to any ‘facilitating or expediting payment,’ the purpose of which is to expedite or secure the performance of a ‘routine governmental action.’” That includes common payments to ordinary officials in foreign countries to complete an action that was bound to be completed in the first place.

That said, the SEC admonishes companies participating in facilitation payments to “have appropriate internal controls and compliance procedures designed to provide that such payments satisfy the exception for routine governmental action and are properly approved and documented in the issuer’s books and records.”

Although, updated guidance from the SEC and the Department of Justice issued in November 2012 continues the exception for facilitation payments, the two agencies have used the settlement process through which most FCPA cases are resolved (instead of litigation) to narrow the scope of approved payments, Mondaq notes in a commentary. Specifically, Mondaq says that enforcement is having a greater role in determining the scope of the law than courts through non-prosecution agreements between the agencies and defendants. Cases have included debt collection (SEC v. Summers) and scheduling and performance of required inspections (United States v. Westinghouse Air Brake Technologies).

It’s also critical to know foreign countries’ anti-bribery laws, which in some cases are stricter than the FCPA.

Even if cases don’t go to court, there can be substantial legal fees involved. Does your commercial insurance policy adequately cover your business for arbitration expenses? And have you reviewed your bookkeeping procedures to ensure any payments you do make to foreign officials are documented properly and fully?

At Roanoke Trade, you will find not only insurance to meet your cargo and shipping needs, you will also find experts on international trade and risk management who can help you review your financial protection to make sure you are undertaking the best risk practices and securing the most appropriate insurance possible.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE (800-762-6653).

Sources: SEC, MONDAQ

Share This:

Related


Thank You to Karen Groff

We have important news to share with you. Karen Groff, President of Roanoke Insurance Group, has decided to leave the organization. Although our hearts are heavy with this news, we respect her decision and wish her all the best in her future endeavors. Karen played an integral role in Roanoke’s success over the past 30 […]

Corporate Communiqué, Industry Insights

2024 NCBFAA Scholarship & Application Announcement

Roanoke Insurance Group is delighted to once again sponsor  a $5,000 scholarship to students intending to join the trade industry. The National Customs Broker and Forwarder Association of America (NCBFAA) offers this $5,000 scholarship award yearly and will be presented to the winner at the NCBFAA annual conference in April 2024. The topic for this […]

Events, Industry Insights

How to Protect Your Company from Nuclear Bodily Injury Verdicts

The liability landscape for the trade and transportation industry is changing. Carrier accidents on the road resulting in bodily injury and property damage (BIPD) claims pose a real financial threat to brokers, forwarders, and other transportation intermediaries. Recently, the number of large trucks involved in fatal crashes and the resulting jury awards have skyrocketed. Inconsistent […]

Industry Insights, Transportation

Sign up for our latest articles and events.

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.

Contact

If you have any questions or need help, feel free to contact with our team.

800-762-6653

US CORPORATE HEADQUARTERS

1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


CANADA CORPORATE HEADQUARTERS

390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2024 Roanoke Insurance Group Inc. A Munich Re company

Better Business Bureau logoCoverholder at Lloyd's logo