On December 22, 2023, President Biden signed into law the Foreign Extortion Prevention Act (FEPA) as part of the National Defense Authorization Act for Fiscal Year 2024. The FEPA will add an important new tool for the US to combat overseas bribery.  A compliment to the Foreign Corrupt Practices Act (FCPA) (which prohibits the bribing of foreign officials), the FEPA seeks to combat the “other side” of foreign bribery by criminalizing the demand or receipt of bribes by foreign officials.  US and international companies, as well as foreign officials, should be mindful of these developments.

The FEPA Allows the United States to Prosecute Foreign Officials Who Solicit or Receive Bribes

While the FCPA criminalizes the payment of bribes, the FEPA criminalizes the demand or receipt of bribes.  Specifically, the FEPA makes it “unlawful for any foreign official . . . to corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value personally or for any other person or nongovernmental entity, by making use of the mails or any means or instrumentality of interstate commerce, from any person . . . while in the territory of the United States, from an issuer . . . , or from a domestic concern,” if the demand or acceptance is done “in return for— (A) being influenced in the performance of any official act; (B) being induced to do or omit to do any act in violation of the official duty of such foreign official or person; or (C) conferring any improper advantage, in connection with obtaining or retaining business for or with, or directing business to, any person.”[1]

The FEPA broadly defines the term “foreign official,” to include “any official or employee of a foreign government or any department, agency, or instrumentality thereof,” “any senior foreign political figure,”[2] “any official or employee of a public international organization,” and persons acting in either an official or unofficial capacity for or on behalf of “a government, department, agency, or instrumentality . . . [or] a public international organization . . . .”  This scope, like that of the FCPA, is broad enough to cover some persons who would not conventionally be viewed as “government officials”; for example, where institutions such as health-care facilities are State-owned, local hospital or medical clinic procurement staff may constitute “foreign officials” as the FEPA defines the term.

Violations of the FEPA may result in a fine of no more than $250,000 (or three times the monetary equivalent of the thing of value), up to fifteen years imprisonment, or both.  Offenses under the FEPA are “subject to extraterritorial Federal jurisdiction.”

Companies whose activities concern the United States should be mindful of the FEPA when interacting with non-US public officials and should also ensure that their internal compliance programs accurately reflect this new development in anti-corruption efforts.

 

[1] The text of the FEPA can be found in Section 5101 of H.R. 2670, which is available at: https://www.congress.gov/118/bills/hr2670/BILLS-118hr2670enr.pdf .

[2] The term “senior foreign political figure” is defined by reference to 31 C.F.R. § 1010.605, which defines “senior foreign political figure” to include current or former senior officials in branches of foreign government, senior officials of major political parties, and senior executives of foreign-government owned commercial enterprises, as well as, among other things, immediate family members and close associates of such persons.  31 C.F.R. § 1010.605(p).

 

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