ANTIBRIBERY LAWS

The Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. companies from making payments to foreign government officials for the purpose of influencing their actions.  An exception to the FCPA's broad prohibition permits minor payments to expedite or facilitate “routine governmental action.” 

Under the antibribery provisions of the FCPA, issuers of securities (“issuers”) registered pursuant to the Securities and Exchange Act of 1934 (“the 1934 Act”) and other “domestic concerns”, or officers, directors, employees and agents acting on their behalf, are prohibited giving money or other things of value to a foreign official, candidate for foreign political office, foreign political party or an official thereof for the purpose of:

influencing any act or decision of such official, candidate or party in his or its official capacity, inducing such official, candidate or party “to do or omit to do” any act in violation of his or its lawful duty, or

inducing such official, candidate, or party to use his or its influence with a foreign government or instrumentality to affect or influence any governmental act or decision in order to assist the donor in obtaining or retaining business or directing business to any person.

Companies doing business overseas should be alert for situations that have a high potential for violations of the FCPA such as:

· Money or property passed through a consultant to a public official, political candidate, or political party official to obtain or influence certain government actions.

· Use of consultants who are connected with the governments or political parties of the countries in which the corporation is doing business.

· Gifts or gratuities to government officials, political candidates, or political party officials or their families in such countries.

· Extravagant entertaining of government officials, political candidates, or political party officials or their families in such countries.

· Indirect payments to government officials, political candidates, or political party officials or their families in such countries.

· Use of company facilities by government officials, political candidates, or political party officials.

ANTIBOYCOTT LAW

The U.S. antiboycott laws restrict a U.S. company's ability to comply with international boycotts imposed by foreign governments.  The essence of these provisions is to prohibit any U.S. person, firm, or related entity from participating in or furthering a boycott not sanctioned under U.S. law.  The primary target of these provisions is the Arab boycott of Israel, but the restrictions apply to any “unlawful” boycott.

The Export Administration Act requires U.S. companies to report any boycott requests they receive even though they refuse to participate in or cooperate with these requests.  The term “request” under the Export Administration Act is broadly defined to include any request, whether written or oral and from either a boycotting or non-boycotting country entity, to take any action having the effect of furthering or supporting a restrictive trade practice or boycott against a country friendly to the U.S.  A “request” may include a solicitation, directive, legend, or instruction that asks for information or asks that a U.S. person take or refrain from taking a particular action.  U.S. firms should be wary of:

· Requests not to do business with a boycotted country, with companies, nationals or residents of such country, with other entities doing business with such country, with so-called “blacklisted” firms or persons, or with any person or company if you suspect the request is related to the boycott of such country (for example, Arab boycott of Israel);

· Requests to do business only with approved firms or persons (for example, those on a so-called “whitelist”);

· Requests to do business with specified firms or persons, such as potential contractors or subcontractors, which you have reason to believe have been selected by boycotting countries or entities in such countries for boycotting reasons;

· Requests to discriminate against U.S. persons on the basis of race, religion, sex, or national origin;

· Requests in which the words “Israel”, “Hebrew”, “Jewish”, or other words indicative of ancestry, nationality, or national origin are used, as well as questions about parentage;

· Requests to furnish information regarding race, religion, sex, or national origin;

· Requests to furnish information about anyone's past, present or future business relationships with a boycotted country, with companies, nationals, or residents of such country, or with blacklisted persons, as well as requests to furnish information about anyone's association with charitable or fraternal organizations supporting a boycotted country;

· Insistence upon contract clauses making applicable, or requiring compliance with, local laws or regulations; and

· Requests to supply a negative certificate or origin of goods (for example, “not produced in Israel”).

deKieffer & Horgan, PLLC’s attorneys have extensive experience in assisting U.S. clients doing business abroad in complying with these stringent requirements of U.S. law. 

deKieffer & Horgan, PLLC prepared the materials on this web site for informational purposes. The transmission and display of the information contained at, or accessed through, this web site is not intended to create, and receipt or viewing of it does not constitute, an attorney-client relationship. Since we are not providing legal advice through this web site, you should not act upon any information you might receive from it without seeking professional counsel.  The materials on this web site are intended, but not guaranteed, to reflect current legal developments and the current state of the law. We do not, however, represent, warrant, or guarantee they will be complete, accurate, or up to date when you view them.