USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
Hospitality, Travel, Gifts and Promotions Under domestic bribery laws, federal and state offi - cials, including elected political figures and career employees, are generally restricted in the gifts and hospitality they may receive from sources outside the government. Some officials, such as members of Congress, may be required to disclose the gifts they receive to the public. For federal employees, gifts over USD20 are generally prohibited (and they generally may not accept more than USD50 in a year from a single non-government source). Travel expenses are a separate, complicated area of law and also require an analysis of internal government ethics rules. Whether or not a government employee’s travel may be funded by a non-government source often depends on the purpose of the trip and the specific rules of the agency where they work. The FCPA does not limit foreign officials’ ability to accept gifts, hospitality, etc, but such expenses can be “things of value” that can give rise to FCPA liability. Gratuities The FCPA permits persons subject to its jurisdiction to make “facilitating or expediting payment[s]... the purpose of which is to expedite or to secure the per - formance of a routine governmental action” by a for - eign official. In practice, this exemption is read very narrowly. The domestic bribery statute does not have an equiv - alent provision. It is a separate crime to pay a “gratu - ity”, which is a facilitation payment made on account of an official act but not with an intent to influence it. Courts have held that if an official demands payment to perform a routine duty, a defendant may raise an economic coercion defence to the bribery charge. Failing to prevent bribery is not a specific offence under US law (and US law generally does not crimi - nalise failures to prevent a crime). Extortion The Foreign Extortion Prevention Act (FEPA), adopted in December 2023 and codified in 18 USC, Section 201, addresses the demand-side of bribery by mak- ing it a crime for foreign officials to solicit or accept bribes from a US citizen, company or issuer, or any -
one located within the territory of the United States, when made to obtain or retain business. Compared to the FCPA, the FEPA slightly expands the definition of “foreign official” to include “any senior political figure”, and it also specifies that the law applies to any “for - eign official or person selected to be a foreign official”. Foreign Officials The FCPA defines the term “foreign official” as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organisation, or any person act - ing in an official capacity for or on behalf of any such government or department, agency, or instrumental - ity, or for or on behalf of any such public international organisation”. The FCPA Resource Guide advises that state-owned or state-controlled companies may be “instrumen - talities”, so that their employees could be considered “foreign officials”. Many factors are relevant in deter - mining whether such a company is an “instrumental - ity”, including “the foreign state’s extent of ownership of the entity; the foreign state’s degree of control over the entity (including whether key officers and direc - tors of the entity are, or are appointed by, government officials); the foreign state’s characterisation of the entity and its employees; the purpose of the entity’s activities; the entity’s obligations and privileges under the foreign state’s law and the general perception that the entity is performing official or governmental func - tions”. In practice, criminal and civil FCPA charges often involve payments or gifts to employees at state- owned or state-controlled enterprises. Domestic Statutes 18 USC, Section 201 defines a “public official” as a “Member of Congress, Delegate, or Resident Com - missioner, either before or after such official has quali - fied, or an officer or employee or person acting for or on behalf of the United States or any department, agency or branch of Government thereof, including the District of Columbia, in any official function, under or by authority of any such department, agency, or branch of Government, or a juror”. State statutes fea - ture similar definitions.
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