USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
The FCPA does not limit foreign officials’ ability to accept gifts, hospitality, etc, but such expens - es can be “things of value” that can give rise to FCPA liability. Gratuities The FCPA permits persons subject to its juris - diction to make “facilitating or expediting payment[s]... the purpose of which is to expe - dite or to secure the performance of a routine governmental action” by a foreign official. In practice, this exemption is read very narrowly. The domestic bribery statute does not have an equivalent provision. It is a separate crime to pay a “gratuity”, 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 rou - tine 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 criminalise failures to prevent a crime). Extortion The Foreign Extortion Prevention Act (FEPA), adopted in December 2023 and codified at 18 U.S.C. Section 201, addresses the demand-side of bribery by making it a crime for foreign offi - cials to solicit or accept bribes from a US citi - zen, company or issuer, or anyone located within the territory of the United States, when made to obtain or retain business. FEPA’s definition of “foreign official” is similarly as broad as FCPA’s definition. 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 acting in an official capacity for or on behalf of any such government or depart - ment, agency, or instrumentality, or for or on behalf of any such public international organi - sation”. The FCPA Resource Guide advises that state- owned or state-controlled companies may be “instrumentalities”, so that their employees could be considered “foreign officials”. Many factors are relevant in determining whether such a com - pany is an “instrumentality”, including “the for - eign state’s extent of ownership of the entity; the foreign state’s degree of control over the entity (including whether key officers and directors 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 functions”. In practice, criminal and civil FCPA charges often involve payments or gifts to employees at state- owned or state-controlled enterprises. Domestic Statutes 18 U.S.C. Section 201 defines a “public official” as a “Member of Congress, Delegate, or Resi - dent Commissioner, either before or after such official has qualified, 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 feature similar definitions.
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