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

American companies, U.S. issuers, and persons in the United States have long been barred from bribing foreign officials under the Foreign Corrupt Practices Act (FCPA).  But until December 2023, no U.S. law directly penalized those foreign officials for soliciting or taking bribes.  With the enactment of the Foreign Extortion Prevention Act (FEPA), buried deep within last year’s National Defense Authorization Act, the United States now targets the “demand” side of foreign bribery.  While the FEPA seeks to neatly complement the FCPA, the implementation of this law could prove messy.

The FEPA amends the federal anti-bribery statute (to be codified at 18 U.S.C. § 201). It targets any “foreign official” who “corruptly demand[s], seek[s], receive[s], accept[s], or agree[s] to receive or accept, directly or indirectly, anything of value” from domestic (that is, U.S.) concerns, U.S. issuers, or persons in U.S. territory, in return for “being influenced in the performance of any official act,” “being induced to do or omit to do any act in violation of the[ir] official duty,” or otherwise “conferring any improper advantage” in a business context.  Readers familiar with the FCPA will recognize these elements.  On closer inspection, though, the FEPA is a different animal entirely.

Most notably, the FEPA defines “foreign official” much more expansively than the FCPA, reaching any “official or employee of a foreign government or any department, agency, or instrumentality thereof”; anyone “selected to be” a foreign official; any “senior foreign political figure”; anyone acting in an official or unofficial capacity for a foreign government etc.; and any official, employee, or agent of a public international organization such as the United Nations.

The inclusion of any person acting in an unofficial capacity for a foreign government etc. makes the FEPA’s definition of “foreign official” especially sweeping.  The law does not define when a person acts in an “unofficial” capacity for a foreign government, so this provision could be a flashpoint for litigation.  Squire Patton Boggs’ Tom Firestone, who helped draft the law, notes that the provision “is designed to cover so-called grey cardinals and others who, while lacking an official position, can nevertheless influence government decision making.”  Family members of foreign officials may be covered by this provision as well.

Foreign officials are, obviously, foreign.  How, then, does a U.S. law apply to them?  Liability under the FEPA is triggered when a foreign official within the meaning of the law “make[s] use of the mails or any means or instrumentality of interstate commerce” to solicit or receive a bribe from a domestic concern, a U.S. issuer, or a person in U.S. territory.  This language provides a colorable territorial basis for the law’s application to foreign nationals who extort people and businesses in America.  The law’s title suggests that its extraterritorial application might also be justified on the basis of passive personality jurisdiction (i.e., protecting U.S. nationals from extortion).  FEPA’s drafters also contend the law represents a valid exercise of universal jurisdiction, arguing for emerging jus cogens against bribery.  In any event, the law contains a clear statement that Congress intended for it to apply extraterritorially and Congress is free to ignore the customary international law of prescriptive jurisdiction when it so chooses.

In some cases, prosecutions under the FEPA may run headlong into the doctrine of foreign official immunity.  Under customary international law, foreign heads of state and other senior foreign officials are immune from criminal prosecution.  Meanwhile, under Article 31 of the Vienna Convention on Diplomatic Relations, foreign diplomats also enjoy immunity from criminal prosecution.  These figures—admittedly, only a few of the foreign officials covered by the FEPA—may not be prosecuted under the law.  Interestingly, the FEPA, unlike the FCPA, does not contemplate an affirmative defense when a foreign state’s local law permits bribe-soliciting or -taking. When foreign officials are not immune, therefore, they cannot look to their home states’ laws to avoid liability.

Workaday diplomatic concerns may also constrain the FEPA’s implementation.  Successful prosecutions may result in up to 15 year’s imprisonment, along with fines of up to $250,000 or “[three] times the monetary equivalent of the thing of value.”  America’s allies may not take kindly to the prosecution of their officials under the FEPA.  And U.S. antagonists would surely scoff at the prosecution of their officials under the law.  Much of the evidence needed to bring a prosecution under the FEPA would exist abroad, moreover, and countries might be unwilling to turn it over to the Justice Department to facilitate prosecutions of their officials.

These same countries might be similarly unwilling to turn over indicted officials themselves.  Because the U.S. government does not prosecute in absentia, non-extradition would frustrate the FEPA’s enforcement.  However, as Firestone argues, even without extradition, a FEPA indictment could nevertheless “jail” a foreign official in his or her home country by limiting his or her ability to travel.

Finally, countries might be less willing to cooperate with FCPA investigations now that these investigations have the potential to transform into FEPA cases.

The many questions surrounding the FEPA (only some of which have been raised here) will begin to be answered with the first prosecutions under the law. Justice Department officials have confirmed that they intend to put the FEPA to use.  The DOJ is aware of the challenges the law poses: its Justice Manual acknowledges that the FEPA “will raise complex enforcement problems abroad as well as difficult issues of jurisdiction and statutory construction.”  Fifty years, several amendments, and a handful of circuit court cases have not fully clarified the scope of the FCPA.  The incipient FEPA regime seems likely to remain in similar flux for years to come.