Contact for FCPA Matters: Daniel Vick
"Corruption has corrosive effects on democratic institutions, undermining public accountability, and diverting public resources from important priorities such as health, education, and infastructure." -U.S. Department of Justice
The Foreign Corrupt Practices Act (FCPA) is US legislation that makes it illegal to provide anything of value to a foreign government official or political party in order to obtain an unfair advantage. It is also illegal to provide anything of value to a third party with knowledge that the benefit will be provided to a Foreign Official, party, or candidate.
Enforcement of the FCPA is an ongoing priority for the US Department of Justice. In 2017 alone approximately $845 million in fines and penalties were levied against multiple companies for violation of the Act. However, the DOJ is increasingly targeting individuals (rather than their employers) for such violations.
Duke University, Duke University Health System and their affiliates engage in activity around the world. As part of its commitment to ethical conduct, those whom Duke has employed or engaged to speak or act on behalf of Duke must comply with the FCPA, United Kingdom Bribery Act (UKBA), and other applicable anti-bribery and anti-corruption laws and regulations.
Please contact the Office of Export Controls if you have questions that are not answered by the Frequently Asked Questions below.
Frequently Asked Questions:
Q. Which Anti-Corruption Laws are applicable?
A. The two laws most relevant to Duke activity are the U.S. Foreign Corrupt Practices Act (“FCPA”) and the United Kingdom Bribery Act (“UKBA”). In addition, many countries and jurisdictions have also instituted their own Anti-Corruption Laws. You should become knowledgeable about any local Anti-Corruption Laws before engaging in activity with individuals or entities outside the United States (even if you remain in the United States).
Q. Whom does this apply to?
A. The FCPA applies to "domestic concerns" - any individual who is a citizen, national, or resident of the United States, or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship that is organized under the laws of the United States or its states, territories, possessions, or commonwealths or that has its principal place of business in the United States; officers, directors, employees, agents, or stockholders acting on behalf of a domestic concern are also covered.
The FCPA can also apply to foreign persons or entities that either directly or through an agent engage in any act in furtherance of a corrupt payment (or an offer, promise, or authorization to pay) while in the territory of the United States. Also, officers, directors, employees, agents, or stockholders acting on behalf of such persons or entities may be subject to the Act.
Q. Who do I call with questions?
A. The main point of contact should be the Duke University Office of Export Controls at 919-668-2711. Alternative options are Duke University Office of Audit, Risk & Compliance at 919-684-2475 or the Duke Office of Counsel at 919-684-3955.
Q. How do I report a potential violation of this policy?
A. Report actual or potential violations to your supervisor, or if you are not comfortable with reporting there, contact the Duke University Compliance & Fraud Hotline at 800-846-9793.
Q. What are common situations that might be Bribes?
A. Examples of common Bribes include:
- Unreasonable or non-bona fide payment of travel expenses
- Unreasonable gifts, entertainment, hospitality, administrative fees
- Contribution to a non-U.S. political party or candidate for non-U.S. political office
- Acceptance of cash or anything of value in excess of modest gifts and hospitality from anyone doing or seeking to do business with Duke
- Contracting with an entity owned or recommended by a Foreign Official or owned by his or her family members
- Charitable contributions to organizations owned or recommended by a Foreign Official or owned by his or her family members
- Conferring titles of honor
- Promises of admission or acceptance to Duke
Q. Who are typical Foreign Officials?
A. Typical examples of Foreign Officials include:
- Professors or employees of public universities
- Employees and contracting agents at government agencies or government-controlled entities
- Doctors in or other employees of government owned or operated medical facilities (clinics, hospitals, etc.)
- Airport employees and local customs officials at country borders or ingress points (such as train stations and airports)
- Public transit employees
- Public dignitaries
- Police officers or investigative bureau agents
Q. What are reasonable payments to Foreign Officials?
A. Examples of reasonable payments for services include, but are not limited to:
- Payments that are required by a contract with a non-U.S. government or government entity
- Reasonable and bona fide expenditures directly related to the promotion of authorized business activities or execution or performance of a contract with a non-U.S. government or government entity
Q. Must a foreign official actually accept a bribe in order for an FCPA violation to occur?
A. No. Wherever corrupt intent is present (i.e. the intent to improperly influence a foreign official), the FCPA prohibits paying, offering, or promising to pay money or anything of value (or authorizing the payment or offer). By focusing on intent, the FCPA does not require that a corrupt act actually succeed in its purpose. Nor must the foreign official actually solicit, accept, or receive the corrupt payment for the bribe payor to be liable.
Q. When do I give a third party actual or apparent authority to be an Agent for Duke?
A. Actual authority is pretty straightforward. It is given in a written document which says that a person can speak for or in the name of Duke.
Apparent authority is trickier. In the collaborative university environment, counterparts are often advancing interests common to Duke and the counterparty. In these circumstances, the counterpart can easily say or write something that might lead a third party to believe that the counterpart is speaking or acting for Duke. At times, a Duke employee may intentionally or accidentally give the counterpart the impression that this is acceptable. In certain circumstances, Duke can be liable for the improper conduct of someone who has the apparent authority to speak or act on behalf of Duke, even if that relationship is not formal or in writing.
Q. Are there special concerns with Advisory Arrangements?
A. Advisory Arrangements, such as those under which Duke is paid for providing its educational expertise or exploring an operations partnership, are a common scenario where agency concerns should be considered more carefully. The preferred method to manage this risk, when it exists, is having a written and signed document which disclaims this authority. If the intent is to provide such authority, Due Diligence steps are required.
Q. What are examples of third parties that are not considered Agents for the purposes of this policy?
A. Examples of third parties that are not considered Agents include:
- U.S.-based third parties engaged to provide goods or services to Duke or to act on Duke’s behalf solely within the United States; and
- U.S. based or non-U.S. based third parties engaged to provide routine office goods, equipment, or services (e.g., janitorial services, hotel accommodations, restaurant meals) to Duke where
- such goods, equipment, or services are available to the public at the same market terms, conditions and prices being agreed to by Duke;
- the Duke personnel requesting such goods, equipment, or services has no knowledge or reason to suspect that the vendor is owned by a Foreign Official, was recommended by a Foreign Official, or in which a Foreign Official has a beneficial interest; and
- such Duke personnel has no intent to influence a Foreign Official with the procurement of the goods, equipment, or services.
Q. What are the limits for meals?
A. Meal expenditures must be modest and reasonable. As a guideline, reasonable expenditures would generally not exceed three times the published U.S. Government Services Administration rates for domestic meals or two times the published U.S. State Department rate for international meals. To find the GSA and State Department rates for meals, use the links below to first find the appropriate M&IE rate (Meals and Incidental Expenses) and then the breakout of the M&IE rate by meal:
|Domestic (GSA)||M&IE Rate||Per meal allocation|
|International (State Dept.)||M&IE Rate||Per meal allocation|
You must obtain prior written approval from the Duke University Office of Export Controls before providing meals more than 4 times per year to the same Foreign Official.
Q. What does Due Diligence include?
A. At a minimum, due diligence should include gathering information to determine the actual and beneficial owners and key employees of an Agent which is an entity; the Agent’s relationships with Foreign Officials; whether an individual Agent or its actual or beneficial owners or key employees of an entity Agent are current or former Foreign Officials or appear on relevant government watch lists; and whether there are any compliance “red flags” that require additional investigation. In addition, due diligence should include checking the Agent’s references and verifying its qualifications.
Q. When conducting Due Diligence on potential Agents, what government watch lists should be checked for the names of the actual or beneficial owners of the Agent and its key personnel?
A. The Office of Export Controls and Anti-Corruption Compliance can assist with this screening. This office can be contacted by email to firstname.lastname@example.org with the names of any government officials, instrumentalities, or organizations thereof. The lists reviewed should include:
- U.S. Department of Commerce Bureau of Industry and Security Denied Persons List
- U.S. Department of Commerce Bureau of Industry and Security Unverified List
- U.S. Department of the Treasury Specially Designated Nationals List
- U.S. Department of State Directorate of Defense Trade Controls List of Statutorily Debarred Parties
- United Nations Security Council List of Individuals, Groups, Undertakings, and Other Entities associated with Al-Qaida
- European Union Consolidated list of persons, groups and entities subject to EU financial sanctions
- U.K. Financial Sanctions: Consolidated List of Targets
Q. When conducting Due Diligence on potential Agents, what are “red flags”?
A. “Red flags” are compliance issues that must be addressed before proceeding with a transaction. Red flags are very fact-specific, and they are not necessarily violations of the FCPA, but they do require additional investigation and analysis. “Red flags” include:
- Agent is an employee of a public (state-owned or -controlled) hospital or university
- Agent has a close relationship with or is related to a Foreign Official
- Agent was recommended by a Foreign Official or a Foreign Official’s relative
- Agent is politically active
- High level of perceived corruption in the country where Agent would work (See Global Corruption Perception Index)
- Agent has a reputation for unethical or suspicious business practices or evidence of past violations of local law or policy
- Agent appears to lack qualifications or resources to perform
- Agent is unwilling to enter into written agreement
- Agent refuses to certify that it will comply with applicable Anti-Corruption Laws
- Agent demands fees in cash
- Agent demands discounts, rebates, or commissions higher than the typical market rate
- Agent provides incomplete or inaccurate information
- Agent requests payment be made to third party or in a different country
Q. What limitations exist on how Duke can pay Agents?
A. No payment to any Agent shall be made or delivered (1) in cash (other than documented petty cash disbursements); (2) with corporate checks payable to “cash,” “bearer,” or third-party designees; or (3) to an individual, entity, or account outside the recipient’s country of residency.
Q. What anti-corruption provisions should be included in contracts with Agents?
A. Duke should always execute a written contract with an Agent, approved by the appropriate Duke personnel. The contract should include anti-corruption representations and the Agent’s agreement to comply with applicable anti-corruption laws, audit rights, and the right to terminate the contract as a result of a breach applicable anti-corruption laws or Duke’s anti-corruption policy.
Q. When may Duke provide travel to Foreign Officials?
A. Duke may provide travel to Foreign Officials only if that travel is directly related to the promotion, demonstration, or explanation of Duke’s business or related to Duke’s execution or performance of a contract with a non-U.S. government or agency.
Q. What type of travel may Duke provide to Foreign Officials?
A. All travel must comply with Duke’s travel policy. Duke may not provide a class of travel to Foreign Officials other than the class of travel that would be available to Duke employees under the same circumstances.