Handcuffs If Your Hand is Out: New Anti-Corruption Law Finally Criminalizes the Solicitation of Bribes By Foreign Officials
In a long overdue move to fill a perceived gap in U.S. law, this year’s National Defense Authorization Act included a new law that will finally criminalize the solicitation of bribes by foreign officials. The Foreign Extortion Prevention Act (“FEPA”) amends the federal domestic bribery statute1 to criminalize the act by foreign officials who seek or receive anything of value from U.S. parties in exchange for an official act or other business advantage. Previously, foreign bribery only criminalized the “supply side” of international corruption, prohibiting the offering and attempted payment of bribes, but the new law now explicitly criminalizes the demand side of foreign bribery, as well.
The legislation — long sought by members of Congress and anti-corruption advocates — explicitly allows federal prosecutors to target not only those who pay bribes to governments abroad, but also foreign perpetrators who demand or receive such payments. Moreover, the penalty includes a maximum sentence of imprisonment of up to 15 years, which is three times the penalty for payment of a bribe under the Foreign Corrupt Practices Act (“FCPA”). The penalty also includes a fine of up to $250,000, or triple the monetary value of the bribe.
FEPA notably fills a perceived gap within the world’s oldest foreign bribery statute: the FCPA. Enacted in 1977, the FCPA criminalizes the “supply” side of foreign bribery offenses, penalizing individuals and companies who offer, authorize, or pay bribes to foreign government officials. But Congress, concerned of the “inherent jurisdictional, enforcement, and diplomatic difficulties” in prosecuting foreign actors, chose to not include foreign officials within the FCPA’s reach,2 and instead deferred to foreign governments to press charges against criminals within their borders. While this void has not prevented U.S. prosecutors from pursuing foreign actors responsible for bribery schemes, it has forced them to seeks other federal offenses as underlying charges, such as money laundering, wire fraud, and mail fraud, as a means of MacGyvering around the FCPA’s limitations. Implementing FEPA closes that gap, and provides the Justice Department with a more direct and appropriate means of charging foreign officials for soliciting bribes.
The implementation of FEPA also fulfills a strategic objective within the five pillars erected within the White House’s United States Strategy on Countering Corruption: to “update the tools available to hold corrupt actors accountable at home and abroad.”3 As previously reported, the Biden-Harris administration has emphasized robustly and vigorously enforcing corporate crime statutes4 as well as combatting corruption around the globe.5 FEPA’s enaction is consistent with this approach, and adds another tool to the quiver of criminal charges that prosecutors can employ to combat foreign bribery — not to mention other penalties, such as Magnitsky Act sanctions or civil penalties under the Foreign Agents Registration Act.
The passage of FEPA is the latest in the continued expansion of U.S. law enforcement to combat corruption worldwide. The law confers explicit “extraterritorial [f]ederal jurisdiction” over foreign officials who demand or receive bribes, and this, coupled with increased efforts by the Department of Justice and Securities and Exchange Commission to expand and deepen relationships with foreign authorities, should result in increased enforcement efforts to combat foreign bribery and corruption in the years to come.
1See 18 U.S.C. § 201 et seq.
2United States v. Castle, 925 F.2d 831, 835 (5th Cir. 1991) (quoting Congressional legislative history sources).
3United States Strategy on Countering Corruption (Dec. 2021) at 12.
4Fry Wernick, Palmina Fava, Zach Terwilliger, and Rebecca Fike, White Collar Enforcement Gains Momentum as COVID Restrictions Ease: What You Need to Know, V&E Regulatory Roundup (May 26, 2022).
5Rebecca Fike and Elizabeth Matthews, Echoes from the ABA White Collar Crime Conference 2022 in San Francisco, V&E Regulatory Roundup (March 10, 2022).
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.