Why FCPA Opinion Procedure Releases Are Broken and How to Fix Them

A couple months ago there was a rare sighting in the world of the Foreign Corrupt Practices Act (FCPA): a Department of Justice (DOJ) opinion procedure release. If you have no clue what an opinion procedure release is, don’t feel bad – if you aren’t an FCPA specialist, there’s a good chance you’ve never heard of them. Under 15 U.S.C. § 78dd-1(e), the DOJ is required to establish a procedure to provide advisory opinions to companies on whether contemplated conduct would conform with FCPA requirements. Regulations promulgated under this provision established “opinion procedure releases” – non-binding, public guidance opinions that provide companies with an indication of how the DOJ would treat a particular action. The releases are quite rare, however. Only 38 have been issued since 1993, and only four have been issued since 2012.

It’s probably fair to say that opinion procedure releases aren’t serving the purpose Congress originally intended for them. Congress presumably recognized that because the FCPA’s provisions are vague and consequences of violation can be severe, businesses require a way of ensuring that their contemplated conduct is within legal bounds. These concerns are even more pressing in 2014 as they were when the FCPA was passed in 1977, given that the DOJ and SEC are attempting to expand the FCPA’s reach through creative legal arguments, and multinational companies expanding into emerging markets that present new cultural and legal challenges. Companies constantly complain about legal uncertainty under the FCPA, yet the statutory mechanism designed to alleviate this problem is hardly used. Why? Continue reading