Clarifying Amendments to the Foreign Extortion Prevention Act
In December 2023, US Congress passed a landmark anti-bribery law: the Foreign Extortion Prevention Act (FEPA). FEPA was designed to supplement the Foreign Corrupt Practices Act (FCPA) and expand liability to foreign government officials who solicit or accept bribes from US companies. Previously, only companies and individuals who “supplied” the foreign bribery (i.e. offered, promised, authorized, or paid bribes) to government officials were charged under the FCPA. Now, foreign government officials on the ”demand” side of the bribery, who solicit, seek, agree to receive, or accept bribes from a US company or individual, or any person while in US territory in exchange for or in connection with obtaining or retaining business, are liable under FEPA. Significantly, FEPA also expanded the definition of “foreign official” and criminalized bribery of persons or companies located in the United States or with a sufficient nexus to the United States.
More information on the implications of FEPA on anti-corruption compliance programs can be found in our previous alert here.
On July 20, President Joe Biden signed the Foreign Extortion Prevention Technical Corrections Act (FEPTCA), which amends FEPA to better align with the FCPA’s language and clarify its jurisdictional reach. The amendments also move the offense from the domestic bribery statute under 18 U.S.C. § 201 to a new offense under 18 U.S.C. § 1352 titled “Demands by Foreign Officials for Bribes.”
The recent amendments narrowed the scope of “foreign officials” who may be subject to the statute. In the original language of FEPA, the term “foreign official” included: (1) any official employee of a foreign government, or any department, agency, or instrumentality thereof; (2) any senior foreign political figure; (3) any official or employee of a public international organization; (4) any person acting in an official capacity for or on behalf of a government department, agency, instrumentality, or public international organization; or (5) any person acting in an unofficial capacity for or on behalf of a government, department, agency, instrumentality, or a public international organization. Now, amendments to FEPA removed reference to persons “acting in unofficial capacity” and added language including persons selected for, but not yet appointed to, positions as a foreign official, as well as persons acting on behalf of a foreign official. Importantly, Congress kept FEPA’s reference to “senior foreign political figure,” which is broader than what the FCPA covers. This includes current or former senior officials of government, major foreign political parties, senior executives of a foreign government-owned commercial enterprise, and people widely and publicly known to be close associates of a senior foreign political figure, among others.
FEPA’s jurisdictional prong was also updated to prevent foreign officials from demanding, seeking, receiving, or accepting bribes from any officer, director, employee, or agent of an issuer of US securities or a domestic concern, not just from the issuer or concern itself. Now, the United States will have jurisdiction when an agent of a foreign official takes action within the United States to further a bribery scheme.
As we noted in our earlier article, it is crucial for companies to regularly evaluate and evolve their compliance programs. Even with the updates, FEPA’s definition of a foreign official still encompasses a more extensive set of individuals, including “any senior foreign political figure.” Companies that interact with foreign officials — especially through third parties — should examine their due diligence procedures to ensure they understand potential risks in their business operations and interactions. Relatedly, companies should implement internal reporting mechanisms that can effectively detect and elevate potential FEPA and FCPA concerns to qualified in-house personnel.
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