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In brief

The DOJ and the SEC recently published a Second Edition of their joint Resource Guide to the US Foreign Corrupt Practices Act. While the Second Edition does not promulgate any new law or policy, it is a useful refresher for practitioners on the significant FCPA cases and developments in the past eight years since the first edition was published. The Resource Guide once again provides a current and comprehensive overview of the core US enforcement agencies’ views on the statute for companies and practitioners. This article highlights key changes in the Second Edition of the Resource Guide.


In depth

On July 3, 2020, the United States Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) published a Second Edition of their joint Resource Guide to the  US Foreign Corrupt Practices Act (the “Resource Guide”). After a busy eight years in FCPA enforcement since the First Edition was released in 2012, the Resource Guide was due an update.

While the Second Edition does not promulgate any new law or policy, it is a useful refresher for practitioners on the significant FCPA cases and developments in the past eight years. With this update, the Resource Guide once again provides a current and comprehensive overview of the core US enforcement agencies’ views on the statute for companies and practitioners.

However, one critical development seen in the last eight years – the explosion of multinational anti-corruption enforcement – means that the Resource Guide is no longer the only resource that multinational companies must consult in attempting to understand the complexities of today’s international anti-corruption compliance and enforcement environment. Because of this development, it is now just as important to understand foreign enforcement trends and the expectations of foreign regulators many of which have also published their own guidelines or requirements.1


The stated purpose of the Resource Guide is to act as a “compilation of information and analysis regarding the Foreign Corrupt Practices Act (FCPA) and related enforcement.” The Resource Guide is a rather unusual document, as it is produced by the FCPA’s enforcers to give guidance to those who are subject to the statute on how to comply, avoid enforcement, or mitigate the consequences when before the authorities.2 As such, when first released in 2012, the Resource Guide quickly became an important go-to resource for companies and FCPA practitioners seeking to understand the FCPA and its enforcement.

One reason that the Resource Guide was considered so useful was its integration of the many sources of law, practice, and policy that are relevant to understanding the FCPA’s application and enforcement. These sources include: i) negotiated resolutions with DOJ and SEC by way of deferred or non-prosecution agreements (“DPAs” and “NPAs”), civil settlements and criminal plea agreements; ii) a limited number of court cases setting formal precedent on FCPA interpretation; and iii) DOJ and SEC enforcement policies, published guidance and practice.

Since the Resource Guide was first released, key developments have come in each of these areas. By 2020, the First Edition of the Resource Guide no longer represented a complete compilation of the DOJ and SEC’s FCPA-related analysis and enforcement, and therefore an update was warranted.


The Second Edition retains the purpose and structure (and much of the same content) as its predecessor. Key developments in each of the areas contributing to FCPA jurisprudence have now been included.

Settled Corporate Cases

The Second Edition makes use of many of the key FCPA resolutions of recent years to illustrate the agencies’ interpretation of the FCPA’s provisions. Since almost all corporate FCPA cases are resolved between the DOJ and SEC and defendant companies without recourse to the courts, these settlements, while not binding precedent, signal the views of the DOJ and SEC on the jurisdiction of and conduct prohibited by the FCPA. They have come to be perceived as something of a DOJ/SEC created common law. Thus, they are important in better understanding enforcement priorities and how similar cases may be approached in the future. New, or updated, case examples have been given to illustrate the following points, among others:

  • the wide range of items that may be considered “things of value” and thereby constitute a bribe payment (including gifts, travel, school tuition, and internships for officials’ family members among other things);
  • particularly with respect to gifts, hospitality and entertainment, the Second Edition contains a number of examples which illustrate that substantial or lavish activities (as opposed to reasonable, modest and prudent ones) are more likely to be considered improper and subject to scrutiny by DOJ and SEC. Examples given include: a $12,000 birthday trip for a government decision maker from Mexico that included visits to wineries and dinners; $10,000 spent on dinners, drinks, and entertainment for a government official; a trip to Italy for eight Iraqi government officials that consisted primarily of sightseeing and included $1,000 in “pocket money” for each official; and a trip to Paris for a government official and his wife that consisted primarily of touring activities via a chauffeur-driven vehicle;
  • anticorruption issues associated with the engagement of (and inadequate control over) third parties, particularly in government-facing, sales or business development roles, a key risk that drives the most FCPA cases, as reflected in the several new examples provided;
  • the mens rea requirement for a criminal violation of the FCPA’s Accounting Provisions; and
  • FCPA risk in mergers and acquisitions.

Several of the new examples come from the DOJ’s more recent practice of making public those instances where it formally declines to prosecute companies but nevertheless requires disgorgement of profits gained from illegal conduct. This practice stems from the FCPA Corporate Enforcement Policy (discussed in further detail below).

Approach to Enforcement of the FCPA’s Accounting Provisions

In addition, the Second Edition acknowledges that a company’s internal accounting controls are not “synonymous” with its compliance program and, while it said there are components of both that overlap, it did not specify what those are. Accordingly, the Second Edition has tacitly acknowledged that having an insufficient compliance program is not necessarily a violation of the FCPA’s books and records and internal accounting controls provisions. The lesson here is: when assessing liability under the accounting provisions, it is critical to revert to the statutory elements of the internal accounting controls provisions in order to determine whether a compliance program shortcoming is a violation of law. This update also goes hand-in-hand with other guidance in the Second Edition noting that where the DOJ and SEC cannot prove a violation of Section 30A, for whatever reason, these agencies “look to the nature and seriousness of the conduct in determining whether to pursue an enforcement action” for violations of the accounting provisions, which suggests that the SEC and DOJ will remain focused on accounting provisions violations that involve large or systematic improper payments, and will be less aggressive in pursuing accounting provisions violations involving smaller or technical accounting provisions shortcomings.

Limited Number of Precedential Court Cases 

The limited judicial precedent in the last eight years has come from cases involving individual defendants, who, with their liberty at stake, are often more willing to take cases to trial than are companies, for whom the risk of an indictment is usually sufficient to induce settlement. The binding, precedential nature of issues so decided by a court elevates the importance of these decisions. The cases incorporated in the Second Edition include:

US v. Esquenazi3

In Esquenazi, the defendants appealed their convictions for conspiracy to violate the FCPA (among other offenses), arguing that the employees of Haiti Telecom whom they were convicted of bribing were not public officials, and the company was not a state instrumentality. The Eleventh Circuit disagreed, and provided guidance that a state instrumentality is “an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own.”
The Court went on to provide non-exhaustive lists of factors to determine whether a government “controls” an entity, considering: i) the foreign government’s formal designation of the entity; ii) whether the government has a majority interest in the entity; iii) the government’s ability to hire and fire the entity’s principals; iv) the extent to which the entity’s profits, if any, go directly to the government, and in the case that the entity does not break even, the extent to which the government subsidizes the entity; and v) the length of time these indications of control have existed. And a non-exhaustive lists of factors to determine whether an entity performs a function that the government “treats as its own”, considering: i) whether the entity has a monopoly over the function it exists to carry out; ii) whether the government subsidizes the costs associated with the entity providing services; ii) whether the entity provides services to the public at large in the foreign country; and iv) whether the public and the government of that foreign country generally perceive the entity to be performing a governmental function.

US v. Hoskins4

In Hoskins the defendant was a senior executive of a subsidiary of French company and had allegedly approved payments to “consultants” retained to bribe Indonesian officials. He was a British national and was not working for a  US company, nor present in the  US during the alleged violation. Nevertheless, the prosecution charged him with conspiring to violate, or aiding or abetting the violation of, the FCPA, together with another individual who was more clearly subject to FCPA jurisdiction. The Second Circuit rejected the government’s position that Hoskins was subject to the jurisdiction of the FCPA.

In summarizing the case in the Resource Guide, the DOJ states that “at least in the Second Circuit” an individual can be criminally liable under the FCPA only if that individual’s conduct and role fall into one of the specifically enumerated categories listed in the FCPA’s Anti-Bribery provisions, namely: (1) an “issuer,” or any officer, director, employee, or agent thereof (regardless of their nationality); (2) any US domestic concern (US domestic corporation or entity) or US citizen, whether inside or outside of the United States or any officer, director, employee, or agent thereof (regardless of their nationality); and (3) any other person or entity that takes an act in furtherance of a corrupt payment while in the territory of the United States.

The Resource Guide goes on to state that the reasoning in Hoskins was rejected by the District Court for the Northern District of Illinois in  US v. Firtash5 in 2019. Given the DOJ’s choice to highlight the split in interpretation in the Resource Guide, it is fair to say that the DOJ does not regard Hoskins as settled law and may be eager for another opportunity to reassert these jurisdictional arguments for inchoate offences.

Indeed, after the Second Circuit decision the DOJ continued to pursue Hoskins for FCPA violations under an agency theory. Agency depends on the existence of three elements: (i) the manifestation by the principal that the agent shall act for him; (ii) the agent’s acceptance of the undertaking; and (iii) the understanding of the parties that the principal is to be in control of the undertaking.6 In November 2019, a jury returned a guilty verdict against Hoskins for FCPA violations. But in February 2020, the Court acquitted Hoskins on the FCPA counts, concluding that prosecutors failed to prove beyond a reasonable doubt that Hoskins was an agent of the relevant US entity.7

Further, the Second Edition states unequivocally that Hoskins does not limit the DOJ or SEC’s ability to bring conspiracy or aiding and abetting charges under the FCPA’s accounting provisions, since those provisions apply to “any person” (not limited to someone who falls within the categories of people enumerated by the anti-bribery provisions.)

Kokesh v. SEC8

The Second Edition also discussed a key update on the issue of SEC disgorgement orders, which are regularly sought by the SEC in FCPA cases and have traditionally been a source of contentious discussion between the parties to a settlement, particularly as it relates to the period of time over which the SEC may obtain disgorgement and the calculation of the disgorgement amount. Kokesh v. SEC dealt with the “period of time question.” In Kokesh, the SEC sought, and the district court granted, disgorgement of all profits generated by the defendant. However, in 2017, the Supreme Court ruled that disgorgement orders sought by the SEC in federal court were a “penalty” subject to the five year statute of limitations under 28 USC. § 2462. This represents a significant limitation on the SEC in seeking disgorgement in FCPA cases and acts as a strong incentive for the SEC to move quickly in order to secure meaningful disgorgement. Kokesh did not address the “calculation” question and also cast into some doubt whether the SEC was authorized at all to seek disgorgement orders in federal court enforcement proceedings.

However, just before the Second Edition was issued, the Supreme Court issued its ruling in Liu v. SEC9,  which spoke to these issues. Primarily, Liu upheld the SEC’s ability to seek disgorgement in federal court as an equitable remedy. However, the Supreme Court held that such orders must be limited to the defendant’s net profits, and legitimate expenses must be deduced from that gross amount. The Supreme Court declined to provide any meaningful guidance on what expenses are appropriate to be offset, as well as under what conditions the SEC may not return the disgorgement proceeds to harmed investors, likely setting up litigation on these issues for years to come.

DOJ/SEC Policy

Much of the DOJ and SEC’s approach to prosecuting FCPA cases is driven by internal policy, procedure and guidance given to prosecutors. Most prominent in this regard is the DOJ’s Justice Manual (formerly known as the US Attorneys’ Manual).10  Although in recent years DOJ has moved to incorporate more of its policy into the Justice Manual itself, the Department continues to issue stand-alone policy documents, memoranda, and guidance outside of that format.

FCPA Corporate Enforcement Policy

A major development that has been incorporated into the Second Edition is the DOJ’s FCPA Corporate Enforcement Policy (“CEP”). 11 The CEP was introduced as the FCPA “Pilot Program” in April 2016 and was formalized and incorporated into the Justice Manual in November 2017.

The CEP states that a company is entitled to a presumption that the DOJ will, absent aggravating circumstances, decline to prosecute an FCPA violation if the company voluntarily discloses the misconduct, fully cooperates, timely and appropriately remediates any problems, and disgorges profits. Where a declination is not deemed appropriate, the DOJ may still offer a declination or recommend 50% off the low end of the  US Sentencing Guidelines if the company has disclosed and cooperates. And where the company does not voluntarily self-disclose, but nevertheless fully cooperates and remediates, the Department will recommend to a sentencing court up to a 25% reduction off of the low end of the  US Sentencing Guidelines.

The CEP attempts to provide some certainty for companies self-disclosing potential FCPA violations and thereby incentivize them to come forward with allegations of misconduct.

Compliance Program Evaluation Guidelines

The DOJ made only modest additions to the Resource Guide section on assessing compliance programs. In recent years the DOJ has formalized its expectations in this area in the separate and more comprehensive Guidance on Evaluating Corporate Compliance Programs,12  which is intended to assist prosecutors in assessing compliance programs at each stage of their consideration of charging and resolving any corporate criminal case. For the Second Edition of the Resource Guide, the DOJ highlights that a company’s compliance program factors into the resolution of corporate criminal matters in three places: (i) the form of resolution or prosecution; (ii) the monetary penalty; and (iii) the compliance obligations to be included in any resolution. The Second Edition also maintains the robust section on hallmarks of effective compliance programs, which continues to provide guidance on what the DOJ and SEC expect from corporate compliance programs.

Monitor Selection / Benczkowski Memo

The Second Edition now provides further guidance on when a corporate monitor will be appropriately imposed in resolving FCPA cases from the memorandum issued by former Assistant Attorney General Brian Benczkowski on October 11, 2018, entitled Selection of Monitors in Criminal Division Matters (the “Benczkowski Memo”).13 The Benczkowski Memo established new standards for the DOJ in determining whether a monitor is needed in individual cases and, if so, agreeing on the terms of a monitor’s selection and engagement.

The Second Edition of the Resource Guide references this guidance, stating that prosecutors will assess the potential benefits of employing a monitor as well as the associated cost and impact on the operations of a corporation. The key issue, as stated in the Second Edition, is that a monitor will likely not be necessary where a corporation’s compliance program and controls are demonstrated to be effective and appropriately resourced at the time of resolution.

International Enforcement and Cooperation

Some of the most significant developments occurring in anti-corruption enforcement in the past eight years have occurred outside of the US The rate of enforcement by other regulators has increased dramatically, with cases brought by these regulators either on their own or in cooperation with the US Significant cases have been brought by authorities in Brazil, France, the Netherlands, Switzerland, and the U.K. to name a few. Of course, matters originating outside the  US involving  US companies or issuers often lead to parallel  US enforcement.

This trend is reflected in the Second Edition, which references the US Government’s policy on coordination of corporate resolution penalties, issued in 2018 and since incorporated into the Justice Manual (also referred to as “no piling on”).14 The Justice Manual instructs prosecutors to “endeavor, as appropriate, to coordinate with and consider the amount of fines, penalties, and/or forfeiture paid to other federal, state, local, or foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.” A key observation is that cooperative investigations have increased dramatically in the past five years. Of the 11 cases touted in the Second Edition as examples of cooperation with foreign authorities, 10 of them settled in the past five years and seven of them in the past three years. We further note that in seven of the top ten all time global anti-corruption resolutions, a majority of the fines, penalties and disgorgement paid by the defendant went to non- US governments. Moreover, six of these seven cases were entered into since 2016, further demonstrating the increasingly important role played by non- US regulators and law enforcement.

The Second Edition also indicates that the DOJ is increasing its cooperation with key US economic and financial control agencies, in particular the IRS, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network. FCPA resolutions have reflected the involvement of an even wider array of executive-branch agencies, as well as non- US regulators and law enforcement in investigations conducted by the DOJ and SEC.


The Second Edition breaks no new ground, but it does update this useful first point of reference and ensures that it remains the most comprehensively available compendium of DOJ and SEC thinking on FCPA interpretation and enforcement.

Anti-corruption enforcement has, however, become much more of a global endeavor, and reliance only on the Resource Guide in considering anti-corruption compliance program development and defense strategy will no longer be sufficient to protect companies from the many other potentially applicable laws with extraterritorial reach and their increasingly active prosecutors around the globe.

1 See for example guidance issued by the UK Ministry of Justice on the UK Bribery Act 2010 (; by the Brazilian Office of the Comptroller General on the Brazil Clean Companies Act (; and by the French Anticorruption Agency on the Sapin II statute (

2 The FCPA statute itself, as amended in 1988, anticipated that the Attorney General might deem it appropriate to issue guidelines for companies in complying with the Department of Justice’s FCPA enforcement policy (15 USC. § 78dd-1(d))

3 752 F.3d 912 (11th Cir. 2014).

4 902 F.3d 69 (2d Cir. 2018).

5 392 F. Supp. 3d 872 (N.D. Ill. 2019).

6 3:12-cr-99238-JBA, 2020 WL 914302, at *6-7 (D. Conn. Feb. 26, 2020).

7 Id.

8 137 S. Ct. 1635 (2017).

9 591 US ___ (2020).

10 See

11 See

12 See

13 See



Geoff Martin is a Senior Associate at Baker McKenzie's Litigation and Government Enforcement practice group in Washington, DC. Geoff started his career in Baker McKenzie's London office in 2007 and moved to Washington DC in 2012. Geoff represents clients in matters before the federal government arising out of anti-corruption, trade sanctions, fraud, anti-money laundering, national security, and related enforcement actions. He also represents clients in civil and criminal matters in federal court. Geoff has extensive experience conducting internal investigations relating to such matters around the world.


Lyndon Allin is a senior associate in Baker McKenzie's Washington, DC, office. He previously practiced law with international firms in London and Washington, and before law school spent several years in Moscow managing the European operations of an international law firm. Prior to joining the Firm, Lyndon worked as a senior adviser with Crisis Management Initiative, a private diplomacy and peacebuilding NGO, focusing on conflicts in the South Caucasus. Before that, he was seconded by the US State Department to the Organization for Security and Cooperation in Europe (OSCE), where he served as the senior political officer at the Mission to Moldova, covering the Transnistrian conflict settlement process. As a rapid responder, he helped establish the OSCE Special Monitoring Mission to Ukraine and participated in negotiations in Donetsk Oblast in 2014 which resulted in the release of 21 hostages.