This article was jointly authored by Alexander J. Cotoia, Regulatory Compliance Manager at The Volkov Law Group, and Daniela Melendez, Associate at The Volkov Law Group. Alexander and Daniela may be reached at their respective email addresses of acotoia@volkovlaw.com and dmelendez@volkovlaw.com.
On December 14, 2023, Congress passed the Foreign Extortion Prevention Act (“FEPA”) in an effort to address certain deficiencies inherent in the current iteration of the Foreign Corrupt Practices Act (“FCPA”), as part of the 2024 National Defense Authorization Act (“NDAA”). The chief aim of FEPA is to tackle the problem of foreign bribery from the “demand-side” of the proverbial corruption equation.
While the FCPA ubiquitously criminalizes “supply-side” misconduct by penalizing those who offer, promise, authorize, or pay a bribe to foreign government officials, no federal statute currently exists that would permit federal prosecutors to hold those who request and/or receive a bribe accountable for their misdeeds. FEPA rectifies this glaring incongruity by amending the domestic bribery statute, 18 U.S.C. § 201, to add “foreign officials” as a class of persons to whom existing federal bribery prohibitions apply. FEPA thus makes it illegal for any foreign official to “corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value” from any U.S. issuer or domestic concern, or from any person while in the territory of the United States, where the foreign official: (a) is being influenced in the performance of an official act; (b) is being induced to do, or omit to do, any act in violation of his or her official duty; or (c) is being conferred with any improper advantage in connection with obtaining or retaining business. Foreign officials convicted of an offense under FEPA face the possibility of up to fifteen years imprisonment and fines of $250,000, or up to three times the amount of the bribe received, or both.
In keeping with the FCPA’s expansive reach, the definition of “foreign official” under FEPA is intentionally broad. It expressly includes any official or employee of a foreign government, or any department, agency, or instrumentality thereof, as well as “senior foreign political figure[s]” as defined in 31 CFR § 1010.605, and any employees, and official and unofficial representatives of public international organizations.
FEPA is widely expected to complement existing FCPA enforcement efforts, which in recent years have stagnated, likely owing to the emphasis placed by the Biden Administration on sanctions enforcement in light of ongoing diplomatic tensions with both the Russian Federation and the People’s Republic of China; an activity that Deputy Attorney General Lisa Monaco has dubbed as the “new FCPA.” By subjecting foreign officials to U.S. jurisdiction, FEPA also aligns with recent DOJ efforts to hold more individuals accountable for their criminal acts, rather than just the organizations on whose behalf those individuals act. In the end, the passage of FEPA should send a strong signal to the business community that while FCPA activity may be diminished, foreign bribery remains a key enforcement priority for the Congress. Accordingly, resources and personnel should continue to be allocated to the task of anti-bribery and corruption compliance.
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