USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
duct may fall under the scope of a statute that does, such as the Travel Act or some charges under 18 USC, Section 371. For example, a court has ruled that a defendant who allegedly accepted a bribe in Paris vio - lated the Travel Act, regardless of whether or not 18 USC, Section 201 applied extraterritorially. Moreover, statutes involving domestic bribery – that is, bribes paid to US officials – are likely to have a US nexus. Authorities are more likely to rely on a US nexus for jurisdictional arguments than a potentially complex extraterritoriality theory. US Nexus Even US laws that do not have extraterritorial effect may apply in cases involving foreign conduct if certain US connections exist, including emails sent through a US server, telephone calls placed to or from the United States, or US dollar-denominated transactions clear - ing through US correspondent bank accounts. 3.3 Corporate Liability Under general principles of US law: • corporations may be held criminally liable, includ - ing for violations of the FCPA or domestic bribery statutes; • individuals and corporations may be held liable for the same offence; and • successor entities may be held liable for offences by the target entity prior to the merger or acquisi - tion. Corporate Liability Under the doctrine of respondeat superior, a corpo - ration may be held criminally liable for the acts of its employees, agents, officers, etc, provided that: • those acts were undertaken within the scope of their employment (even if such actions were against corporate policy – ie, the corporation is not absolved just because it has a compliance programme that states not to commit specified offences); and • they were intended, at least in part, to benefit the corporation.
Corporate prosecutions are more common for FCPA violations than domestic bribery, but both are pos - sible. High-level directors, officers, etc, need not be involved for corporate criminal liability to apply. Any employee or third-party contractor can incur liability on behalf of a corporation. Finally, a subsidiary’s criminal conduct may be imputed to its parent corporation, if the subsidiary is the parent’s agent. To make this determination, US authorities evaluate whether or not the parent controls the subsidiary, including through knowing about and/ or directing the subsidiary’s actions. Parallel Individual and Corporate Liability While no individual need be convicted in order for a company to face liability, DOJ policy emphasises indi - vidual accountability. Authorities often look favourably on co-operating companies that identify key individu - als involved in misconduct, and may consider such efforts when assessing a company’s co-operation (and any related reduction in penalties). Successor Liability When one company merges with or acquires another, the successor generally assumes the predecessor’s liabilities under US law, including criminal liabilities. Prosecutors and regulators, however, sometimes decline to act against companies that conducted comprehensive pre-acquisition due diligence and voluntarily disclosed and remediated any potentially problematic conduct identified during the diligence. The DOJ has held successor companies liable for the acts of predecessor companies following mergers and acquisitions when the misconduct continued after the transaction. Authorities may still take action against the predecessor (if they would have had jurisdiction over it), but the FCPA Resource Guide emphasises the value in a company with a robust compliance pro - gramme acquiring a company without one.
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