The U.S. Takes the Fight Against Bribery to Foreign Officials—Take Two

Last December, Congress quietly enacted a landmark law—the Foreign Extortion Prevention Act (FEPA)—which threatens foreign officials with jail time if they solicit or take bribes from American companies, foreign companies listed on exchanges in the United States, or any person present in the United States. On July 30, 2024, Congress discreetly amended the statute… before it was enforced against a single foreign official.

The title of Foreign Extortion Prevention Technical Corrections Act understates the far-reaching character of the amendments. With the stroke of a pen, the FEPA is now a substantively different statute, reaching fewer foreign officials but a greater range of corrupt behavior.

Notably, the “old” FEPA defined “foreign officials” expansively to include even persons “acting in an unofficial capacity” for foreign governments or public international organizations. This definition was intended to cover so-called “gray cardinals”: surrogates for foreign officials who do not themselves hold office. Under the “new” FEPA, gray cardinals can fly free—sort of. The 2024 amendments delete the “acting in an unofficial capacity” language from the definition of foreign officials. However, they also introduce liability for foreign officials when anyone “acting on [their] behalf” (including, presumably, gray cardinals) solicits or takes bribes while physically in the United States. Thus, the “new” FEPA is at its most expansive when it is at its least extraterritorial—that is, when it concerns conduct occurring in the US.

The 2024 amendments also pare back the FEPA’s extraterritorial reach in a small but significant way. Previously, the statute reached foreign officials anywhere if they solicited or took bribes from three categories of payors—American companies, U.S. issuers (i.e., foreign companies listed on U.S. exchanges), or anybody (else) in the United States—provided that, in so doing, they used “the mails or any means or instrumentality of interstate commerce.” The “new” FEPA continues to apply to foreign officials who solicit or take bribes from American companies or U.S. issuers, regardless of where in the world these foreign officials may be. With regard to the third category of payors, though, it only prescribes liability when foreign officials (or, as discussed, those “acting on [their] behalf”) solicit or take bribes while physically in the United States.

In theory, the “old” FEPA would have subjected, say, an official in Azerbaijan seeking a bribe from a Zimbabwean payor to U.S. jurisdiction if the latter happened to visit the United States. No longer. Azerbaijani bribees could only be prosecuted today if they, not the Zimbabwean payors, were stateside.

Note that, in this scenario, the Zimbabwean’s payor’s whereabouts do not matter. This is consistent with the rule in the “new” FEPA. The 2024 amendments eliminate any requirement that the payor be in the United States. If outside the United States, the payor might even escape liability under the Foreign Corrupt Practices Act (FCPA). Foreign persons are not subject to the FCPA unless they take steps toward paying a bribe while physically in the United States. (American companies, citizens, and other domestic concerns are always subject to the FCPA, even while abroad.)

This new discrepancy between the FCPA’s coverage and the FEPA’s comes as a surprise, given that a desire to harmonize the two measures was said to have motivated the 2024 amendments. The “old” FEPA covered the other side of every bribe to which FCPA liability attached.

In other respects, the 2024 amendments do align the FEPA with the FCPA. For one thing, they broaden the statutory definition of a bribe to accord with the FCPA. Now, a foreign official incurs liability for soliciting or taking money in return for, inter alia, “using the[ir] influence … to affect or influence any act or decision of [their] government or instrumentality.” For another, the FEPA now resides in a separate section of the U.S. Code from the domestic bribery statute. Therefore, McDonnell v. United States, 579 U.S. 550 (2016), which narrowed the definition of a bribe under the domestic bribery statute, no longer pertains to the FEPA.

With these changes, the FEPA may finally be applied in the real world. In an August 2024 speech, a senior Justice Department official announced that U.S. prosecutors “plan to vigorously enforce” the law “now that the President signed a bill … that will make it easier for us to proceed with successful prosecutions.”