What you don’t know can certainly hurt you, or more likely your client. In addition to the logistical, financial and other challenges of producing a film abroad, the major film studios now have to contend with another challenge: industry-wide enforcement of the Federal Corrupt Practices Act (FCPA), which began in 2012 and is focusing on the major studios: Disney, Sony Pictures, Twentieth Century Fox, DreamWorks, Warner Bros., Paramount and Universal Studios.
The purpose behind the FCPA is to prevent bribes or other remuneration given to foreign officials. Both the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) can enforce the FCPA. The SEC enforces civil penalties, and the DOJ provides criminal enforcement.
If you are thinking that preventing bribery is a noble purpose and if a film studio does business above-board there would be no chance of running afoul of the FCPA. You would indeed be wrong. The issue is that in most foreign countries, there are local customs requiring some types of payments to expedite permits, licenses and other approvals. If a filmmaker wants to produce a film in a foreign jurisdiction, many times it is impracticable or even impossible to do so without greasing some hands along the way.
As production counsel, it is your job to advise your client of what payments or other perks may violate the FCPA bribery provisions as well as its accounting provisions. Failure to do so may result in both civil and criminal penalties not only for the film production company but also for the officers, directors, shareholders and other owners of the company.
For more information, see “Lights, Camera, and FCPA Actions: The Problem of Foreign Corrupt Practices by Hollywood”, Danielle Siegel, NYSBA Entertainment, Arts & Sports Law Journal, Fall 2016, Vol. 27, No. 3.