Foreign Corrupt Practices Act (FCPA)

The FCPA prohibits offering to pay, paying, promising to pay, or authorizing payments of money or "anything of value" to a "foreign official" to influence the foreign official's actions or decisions or to secure an improper advantage in order to obtain or retain business. The FCPA carries civil and criminal penalties and is enforced by the Department of Justice.

The FCPA applies to all "domestic concerns" which includes VUMC and its employees. The FCPA also holds any U.S. Organization accountable for those working on VUMC's behalf, which could include agents, independent contractors, consultants, or vendors. This includes both agents working domestically and abroad on VUMC's behalf.

VUMC operates globally through its research, academic, and clinical enterprises.

For anyone at VUMC working with foreign collaborators or in foreign countries, the FCPA directly applies to your activities when:

• Your research collaborators in a foreign country are employed by or associated with government universities or hospitals,
• You have contact with government officials,
• Your work requires local governmental approval,
• You are attempting to navigate foreign country import/export requirements, and
• You are negotiating international contracts or transactions with foreign officials.

The term "foreign official" is defined broadly under the FCPA. A foreign official is an officer or employee of a foreign government (including its departments, agencies, or instrumentalities), or of a public international organization. It also includes individuals acting on behalf of a foreign government (including its departments, agencies, or instrumentalities) or on behalf of an public international organization.

Importantly, foreign officials include any employees of applicable governments or organizations, regardless of their rank.

For example, a foreign official could include:

• Faculty and administrators of a university funded, administered, or overseen by a foreign state or government.
• Faculty, administrators, and healthcare professionals at a government-controlled hospital.
• Employees at organizations, agencies, or public bodies controlled by a foreign government. This would include research funding agencies such as UK Research and Innovation (UKRI), as well as non-research organizations controlled by a foreign government, including national museums.
• Employees of a research institute controlled by a foreign government.
• Advisors or agents of foreign governments, officials, or departments, such as attorneys, accountants, financial advisors, brokers, or independent contractors.
• Employees of public international organizations such as the UN, the World Bank, or OECD.

The concept of "anything of value" is also broadly interpreted under the FCPA. In many ways, the definition mirrors the U.S. Anti-Kickback Statute (AKS) that may be more familiar to many VUMC leaders. Under both FCPA and AKS, "anything of value" includes cash, cash equivalents, gift cards, non-cash gifts, loans, entertainment expenses, travel, meals, employment opportunities, scholarships or educational programs, uncompensated uses of the Organization's facilities, and charitable donations. There is no monetary threshold under the FCPA.

It may be common to provide small gifts of appreciation to international collaborators in research or clinical care. The FCPA allows such gifts to collaborators who are government officials when they apply to gifts or other items of value if they are provided for an improper purpose. Gifts provided to research collaborators or foreign officials should not be extraordinary and should be motivated solely to express appreciation, respect, or gratitude. No gifts under the FCPA - and VUMC's Code of Conduct - should be contingent on any return favor, made to influence decision-making, or create even the appearance of an unethical exchange. Gifts should never be provided in the form of cash. All gifts made with VUMC funds must be completely and accurately recorded as gifts in VUMC's general ledger.

Payments for bona fide goods and services provided by foreign sources are permissible. For example, researchers may need to compensate consultants in foreign countries for legitimate services performed, issue sub-awards to institutions, or compensate research subjects for their participation in a study (see VUMC Finance Policy - Documentation and Reporting Requirements for Research Compensation to Participants).

Yes, when meeting important exceptions. The FCPA allows payments made to a foreign official for the purpose of expediting or securing the performance of a routine government action by the foreign official. These types of payments are narrowly construed, and anyone at VUMC should avoid making facilitation payments to the greatest extent possible. Facilitation payments may violate the anti-bribery laws of the foreign jurisdiction where the researcher is working. It is not permissible to make a payment in order to influence approval or obtain a favorable decision by a foreign official.

The most important thing to avoid FCPA risk is to follow VUMC's policies and Code of Conduct. These key documents provide the essential framework for not just complying with the law but also meeting VUMC's high ethical standards.

However, no policy can fully cover every possible scenario. The other crucial step to avoid FCPA risk is to engage VUMC experts when planning any new international project or transaction. Getting questions and proposal specifics vetted beforehand will ensure VUMC proceeds compliantly and ethically in our important international collaborations.

When engaging with third parties to act on VUMC's behalf in foreign countries, the applicable researchers or business owners should conduct thorough due diligence on the proposed agent(s) to determine whether they also qualify as a government official under FCPA and if their business practices and reputation meet legal and high reputational standards. The nature of this due diligence will depend on the countries involved and the agent's intended role. It is essential to involve legal assistance and document this thorough agent review.