For attorneys and international attorneys providing advice to NGOs and non-profit organizations, it is important to understand that under the FCPA mere status as an NGO or a non-profit does not exempt an entity from being subject to the FCPA’s anti-bribery provisions. NGOs and non-profits fall into the category of “domestic concerns” subject to the anti-bribery provisions.
No legal basis exists for distinguishing between a traditional commercial enterprise and an NGO or a non-profit in determining what qualifies as a “domestic concern.” No “carve out,” “safe harbor,” or other express exception exists, nor does an exception exist for an NGO or a non-profit that is strictly charitable in nature. The definition of what constitutes a “domestic concern” is broad. A “domestic concern” includes “any corporation, partnership, association, joint stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of State of the United States or a territory, possession, or commonwealth of the United States.”
Though not binding as precedent, in a relatively recent Opinion Procedure Release, the U.S. Department of Justice explicitly found a non-profit organization to be a “domestic concern” subject to the terms of the FCPA’s anti-bribery provisions. It involved “a non-profit, U.S.-based microfinance institution . . . whose mission is to provide loans and other basic financial services to the world’s lowest-income entrepreneurs.” The microfinance institution received grants and investments from the “United States government, other governmental . . . aid agencies and development banks, nongovernmental organizations . . . and private investors.”
See Elena Helmer and Stuart H. Deming, Non-Governmental Organizations: Anticorruption Compliance Challenges and Risks, 45 INT’L LAW. 597 (Summer 2011). 15 U.S.C. § 78dd-2(h)(1). Id.
Id. § 78-2(h)(1)(B).FCPA Review, 10-02 Op. Dep’t of Justice (2010). In two other opinion procedure releases, the DOJ implicitly found the non-profit entities to be domestic concerns subject to the FCPA. See FCPA Review, 08-03 Op. Dep’t of Justice (2008); FCPA Review, 96-01 Op. Dep’t of Justice (1996). In the more release, the entity seeking the opinion was found to be a domestic concern. 08-03 Op. Dep’t of Justice. But no reference was made to it being a non-profit. See id. Yet it is a matter of public record that the entity is a nonprofit organization. The older opinion procedure release made no express finding that the entity seeking the opinion was a domestic concern. See 96-01 Op. Dep’t of Justice. However, only issuers and domestic concerns are eligible to obtain an opinion pursuant to the opinion procedure release. 28 C.F.R. § 80.1 (1992). 10-02 Op. Dep’t of Justice (2010). Id.