The California Attorney General has issued an alert reminding companies of their continued obligation to comply with the Foreign Corrupt Practices Act (FCPA), despite the federal pause on FCPA enforcement.

As explained in the alert, the California Attorney General may pursue violations of the FCPA under California’s Unfair Competition Law (UCL). The UCL prohibits three types of business acts: those that are “unlawful, unfair or fraudulent.” Cal. Bus. & Prof. Code § 17200. The “unlawful” prong has been interpreted as capturing violations of other laws, including federal criminal laws such as the FCPA. In this way, violations of the FCPA may be actionable under California’s UCL.

Violations of the FCPA may also be prohibited under the UCL’s “unfair” and “fraudulent” prongs. Given the breadth of these prongs, it is conceivable for there to be a UCL violation predicated on the FCPA, even where all the elements of an FCPA violation have not been met. And just as federal prosecutors may charge FCPA conduct using other statutes, it is possible that the California Attorney General may pursue FCPA matters under tort theories that reach beyond the UCL.

Notably, too, the California Attorney General’s jurisdictional reach is long given the vastness of California’s economy. In general, California has jurisdiction over anyone with minimum contacts with the state; out-of-state conduct that injures a California person may qualify. Coupled with the fact that other states have similar UCL-type laws and that private plaintiffs may also bring actions, companies are well advised to remain vigilant on the FCPA front.

Accordingly, all companies are urged to reinforce their compliance procedures and controls to ensure continued adherence to the FCPA and related state laws. Indeed, few things would make a more impactful showing to a concerned regulator than evidence that a company used this time to enhance training and strengthen its culture of compliance.

Additional author: Jacqueline E. Massian; co-authors: A. Scott Bolden, Charles Hewetson, Daniel Kadar, and Anthony Todd.