Infrastructure projects, like those needed for Brazil’s Olympic and World Cup hosting duties, are “ground zero” for Foreign Corrupt Practices Act violations, according to Buchanan Ingersoll & Rooney Litigation Shareholder Matthew J. Feeley.
As Feeley explained in the Policy and Regulatory Report, tight schedules raise the issue of “facilitation payments” – money paid to expedite a foreign official’s routine task – which are explicitly exempted from the FCPA anti-bribery provisions.
“There’s been no opinion release that put a dollar threshold on facilitation payments,” Feeley noted, "but professional wisdom puts the threshold” at $100 (USD). Payments in excess of $100 can lead to the perception that the foreign official is being paid for more than his or her routine obligations.
Such excessive payments are an issue in the highly publicized Wal-Mart FCPA investigation. As Feeley explained, the alleged individual payments top $10,000, and cumulatively total millions.
“I don’t think there is anyway the enforcement authorities consider those to be… facilitation payments,” he said.
The Wal-Mart case and changing global regulations mean companies need to be “extremely careful” about facilitation payments, according to Feeley.
More from Feeley: Wal-Mart "facilitation payments" may be problematic.
High-profile events like the 2016 Summer Olympics and 2014 World Cup also bring with them FCPA risks related to corporate hospitality. Feeley cautioned against giving government officials event tickets.
The United States has interest in welcoming Brazil into “the big leagues of world affairs,” which adds a political backdrop to FCPA concerns.
“I don’t think the U.S. enforcement authorities are going to be very keen to bring enforcement action or initiate any investigation that might embarrass the Brazilian government,” Feeley said. “I think the U.S. will tread lightly, not in relation to Brazil in general, but in relation to these two specific events.”