The Securities and Exchange Commission said yesterday that it will accept the Justice Department's clearance of proposed transactions that might be covered by the Foreign Corrupt Practices Act bribery provision.
Corporations that receive Justice Department assurances that their proposed transactions do not violate the law can rest easy, assured that the SEC will not prosecute them for the same transactions, the SEC said.
Exporting companies and their attorneys had sought guidance about whether proposed transactions would be prohibited by the 1977 act from both the Justice Department and the SEC. In March, the Justice Department said it would lend that assistance, which the SEC has continued to deny.
But what the commission did yesterday in some respects allows the companies to do one-stop-shopping for advance clearance of transactions until May 31, 1981, when the Justice Department will review its procedures.
The SEC said yesterday that while it adheres to its earlier decision not to participate in reviewing transactions under the Foreign Corrupt Practices Act, "as a matter of prosecutorial discreation" it will take no civil enforcement action against those corporations that have received assurances that they will not be prosecuted for criminal violations.
The act makes it a crime for an officer, director or employe of a U.S. corporation to pay or offer to pay a bribe to a foreign official, political party or candidate in exchange for influence. It was enacted in a climate of concern about the ethics of America business after more than 600 companies disclosed to the SEC that they had made hundreds of millions of dollars of "questionable payments" to customers and officials abroad.
In February, the SEC requested comments on the impact and operation of the antibribery provisions of the Securities Exchange Act, responding to published reports that "uncertainty" over the bribery prohibitons was having a negative effect on the willingness or ability of public companies to engage in foreign commerce, the SEC said yesterday.
The SEC noted that it received very little response to that request -- only 14 comments -- and noted that the lightness of the response appeared inconsistent with the expressed concern.
The commission added, however, that it recognized "that concerns may exist with respect to the bribery prohibitions but that affected persons may be unwilling, despite the provision made for confidential submissins, to provide for confidential submissions, to provide for the commission with the kind of information that is needed to determine what action, if any, might be appropirate in response to those concerns."
Besides the SEC and the Justice Department, which are both monitoring the impact of the anitbribery provisions of the Foreign corrupt Practices Act, the General Accounting Office is conducting a study of that act.
All those efforts may provide a better base for assesing the act within approximately a year and make it easier to determine whether it creates uncertainties that are a serious burden for business, the SEC said yesterday.