To close out the FCPA year, on December 31 the telecom equipment maker UTStarcom Inc. agreed to pay the Justice Department $1.5 million in criminal fines and pay the SEC an additional $1.5 in penalties to resolve Foreign Corrupt Practices Act violations in China and Thailand. Other FCPA penalties were agreed to by the company. The UTStarcom matter provides an opportunity to review the application of the FCPA to gifts and business entertainment expenditures to foreign officials. While gift and business entertainment is an area open to vagueness under the FCPA as there are no clear guidelines in the FCPA itself or the legislative history, the conduct of UTStarcom goes far beyond anything that has been previously approved or discussed in any DOJ Release Opinions. While prohibiting payment of any money or thing of value to foreign officials to obtain or retain business, the FCPA arguably permits incurring certain expenses on behalf of these same officials.