Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act

Next month, corporate hospitality tents and suites will spring up all over London, and eager corporate hosts will escort willing clients, some of whom may well be government officials, to sporting events, dinners, and concerts associated with the London Olympics.  Are all of these corporations flirting with liability under the U.S. Foreign Corrupt Practices Act (FCPA)?  If the purpose of providing this travel, lodging and entertainment for the clients – which at today’s published prices in London almost certainly qualifies as “anything of value” – is not to “assist in obtaining or retaining business” then why do it?  And if it is to “assist in obtaining or retaining business,” how can it not be a violation of the FCPA?  The answer quite clearly is that the FCPA does not prohibit marketing to clients, and even lavish entertainment may qualify as legitimate marketing.  The trick, of course, is to ensure that marketing intended to build connections, make potential clients feel good about you and demonstrate that your company is a good business partner, both for quality and relationship, does not cross that sometimes imperceptible line between marketing and bribery.  As described in this article, navigating this boundary takes some thought, but it does not have to be difficult or over-lawyered.  Instead, some clear and transparent rules and procedures should be sufficient to protect the corporation and its employees – and its clients – from crossing the line.  In a guest article, Philip Urofsky, a Partner at Shearman & Sterling LLP, provides a comprehensive discussion of gifts and entertainment provisions under the FCPA, discusses relevant enforcement actions and DOJ opinions then describes ten specific strategies for paying for government clients to attend the upcoming London Olympics or other sporting events without violating the FCPA.

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