Four Key Takeaways From DOJ Advisory Opinion Clarifying Extortion Exception to FCPA

In a rare Foreign Corruption Practices Act advisory opinion, the Department of Justice recently clarified that a payment made by a U.S. company to a foreign country through a third-party intermediary in response to an extortionary demand does not necessarily violate the statute.  While the specifics of this situation are unique, both the details of DOJ’s opinion and the way in which DOJ handled the request may be instructive for compliance officers, in-house counsel, and the FCPA bar.

The facts according to DOJ are as follows.  In October 2021, a maritime vessel owned by a U.S. company inadvertently sailed into the territorial waters of Country A while in the process of anchoring outside a port in Country B.  Apparently, the vessel’s captain had received incorrect anchoring coordinates which led to the error.  Upon the vessel’s entry in Country A’s waters, it was intercepted by a Country A naval vessel and was directed to a port in Country A where the captain was taken ashore and jailed.  Compounding the situation was the fact that the captain was, at the time, suffering from serious medical conditions that were exacerbated by the circumstances and created a significant risk to his well-being.

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