In December 2023, President Biden signed the new Foreign Extortion Prevention Act (FEPA), closing a gap in the Foreign Corrupt Practices Act (FCPA) by criminalizing the "demand side" of foreign bribery. While the FCPA prohibits offering or paying bribes to foreign government officials, the FEPA made it illegal for foreign officials to solicit or accept bribes from U.S. entities or individuals. Less than a year after its enactment, Congress has quietly passed significant amendments to the new law, with the stated goal of removing "inconsistencies between the language of the FCPA and the FEPA [b]ecause these statutes are intended to be complementary, with parts of them addressing the same problem." See 170 Cong. Rec. H4656-02, H4657.
While the amendments to the FEPA are categorized as "technical," they make significant changes to the scope of the law. The amendments shift the FEPA from Title 18 of the U.S. Code, Chapter 11 "Bribery, Graft, and Conflicts of Interest," to Chapter 63, "Mail Fraud and Other Fraud Offenses" and adjust certain key definitions. The changes generally make the FEPA more consistent with the FCPA in three areas: 1) jurisdictional reach; 2) the definition of "foreign official"; and 3) the Act's definition of a quid pro quo.
Extraterritoriality
The FEPA amendments clarify the limits of the law's extraterritorial application and bring it in line with the FCPA. The FEPA applies when a foreign official seeks or receives a bribe from U.S. "issuers" and "domestic concerns" (which include any U.S. individuals, companies or entities organized under the laws of the U.S.). Before the amendments, the FEPA reached any bribe that occurred while the requestee or payor was in the U.S. The amendments clarify that the foreign official requesting or receiving the bribe must be in the U.S. if the bribe is not solicited from a U.S. payor. This means that if a foreign government official located abroad demands a bribe from a foreign payor while the payor is in the U.S., that conduct will no longer be covered by the FEPA.
Definition of Foreign Official
As originally enacted, the FEPA defined "foreign official" to include "any person acting in an unofficial capacity for or on behalf of" a government or public international organization. Though not entirely clear when this could be applied, one could imagine this definition including family members of foreign government officials or others tangentially related to a foreign government. This language has been removed so that the FEPA more closely tracks the FCPA, which defines a foreign official as "any officer or employee of a foreign government . . . or any person acting in an official capacity for or on behalf of any such government."
However, the revisions do appear to broaden the definition of "foreign official" in one respect. The FEPA now includes those not yet occupying their official role (like a president-elect) or persons acting on behalf of the foreign official not yet occupying their official role (like an agent or advisor).
Purpose of the Improper Payment
As initially enacted, the FEPA criminalized payments "in return for–being influenced in the performance of any official act." The amendments make it illegal to "us[e] the influence of the foreign official . . . to affect or influence any act or decision of that government or instrumentality." On its face, the phrasing does not seem markedly different, but "any act or decision" is arguably broader than "official act" and will give prosecutors more flexibility.
The continued attention to the FEPA and Congress's efforts to fine tune the Act are yet another indication of this Administration's focus on combatting international corruption and white collar crime. U.S. companies doing business abroad should review their compliance policies covering relations with foreign government officials, travel, entertainment, and gifts to ensure they properly address the risks of DOJ enforcement. The DOJ continues to emphasize and encourage voluntary self-disclosure.1 Given this evolving legal landscape, it is more important than ever that company policies make clear what constitutes a potential violation. Following through on those policies and robustly investigating and remediating any issues under the FEPA or the FCPA is essential.
Footnotes
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