Regal May Be Legal: DOJ Says A Royal Family Member Is Not Necessarily A 'Foreign Official' Under The FCPA

The U.S. Department of Justice (DOJ) recently provided valuable guidance regarding whether members of royal families qualify as "foreign officials" under the U.S. Foreign Corrupt Practices Act (FCPA). In its first FCPA advisory opinion issued in 2012, DOJ concluded that the royal family member described in the request for opinion "does not presently qualify as a foreign official." See Opinion Procedure Release 12-01 (Sept. 18, 2012).1

DOJ's decision here is somewhat surprising in light of DOJ's consistent attempts in recent years to broaden the scope of who is a "foreign official" under the FCPA. For example, as we previously reported, DOJ issued a 2010 advisory opinion that expanded the definition of "foreign official" to potentially include even private individuals who act on behalf of foreign governments. In stark contrast, DOJ stated in its most recent opinion that a "person's mere membership in the royal family . . . by itself, does not automatically qualify that person as a 'foreign official.'" DOJ was quick to point out, however, that the analysis "requires a fact-intensive, case-by-case determination" based on several different factors.

Companies operating in countries with large ruling families, for example in the Middle East or Asia, have long grappled with the question of whether members of those ruling families would be considered "foreign officials" under the FCPA, resulting in increased compliance risk for companies that do business with them. DOJ's most recent opinion, though made with the heavy caveat that it is based on only the specific facts and circumstances presented by the requestor, demonstrates that DOJ does not consider every royal family member as a foreign official and provides much-needed guidance for companies about doing business with members of ruling families.

The opinion was requested by a lobbying firm that intended to hire a consulting company to assist the firm in obtaining business from a foreign country's embassy to the United States. One of the three partners of the consulting company was a member of the royal family of the country that the embassy represents. DOJ concluded that the member of the royal family was not a foreign official principally because he would not directly or indirectly represent that he was acting on behalf of the royal family or in his capacity as a member of the royal family. In addition, the royal family member:

had no official or unofficial title in the foreign country; had no...