The FCPA: The New SEC and DOJ Enforcement Priority – Part IV: The Anti-Bribery Provisions
The books, records and internal control provisions discussed in the last segment of this series work together with the anti-bribery provisions, the second key segment of the FCPA. Those provisions, contained in 18 U.S.C. § 78dd-2, make it unlawful for any issuer, domestic concern or for any officer, director, employee, agent or shareholder to utilize any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to … any foreign official or any foreign political party or official thereof or to any person knowing that the payment or item of value will be given in whole or part to one of the foregoing for purpose of … influencing any act or decision . . inducing such … [person] to do or omit to do any act in violation of the lawful duty of such official … inducing such … [person] to use his influence with a foreign government or instrumentality thereof … in order to … assist … in obtaining or retaining business for or with, or directing business to, any person.
Under this section there are eight key elements to an offense:
1) Any U.S. person or entity – includes “issuers,” “domestic concerns,” officer, directors and agents;
2) Jurisdictional means;
4) Payment – anything of value including a promise to pay;
5) Foreign government official – includes any official, member of party or candidate;
6) Receipt of thing of value – knowing that all or part of the thing of value will be offered;
7) Purpose – to influence to do/omit; and
8) Obtain/retain business;
The prohibitions apply to any U.S. issuer as defined in 15 U.S.C. § 78dd-1(a). Accordingly, the anti-bribery provisions extend to any U.S. public company subject to the reporting requirements of the Securities Exchange Act, as well as their employees and foreign agents. They also apply to any domestic concern which, under 15 U.S.C. § 78dd-2(h)(10)(B), including any business with its principal place of business in the U.S. While the provisions do not apply to foreign corporations directly, there may be indirect liability if the entity acts as a conduit for proscribed payments. They do not apply, however, to the foreign official either directly or even through a conspiracy count.
Two key elements of an offense are “corruptly” and “to obtain or retain” business. Both of these elements will be discussed later in this series in connection with recent case law developments.
Not included within the prohibitions of the statute is so-called “grease” payments. The statute defines these payments as “any facilitating or expediting payment to a foreign official, political party or party official the purpose of which is to expedite or to secure the performance of routine government action by a foreign official, political party, or party official.” 15 U.S.C. § 78dd-1(b) & 2(b). Generally these are small payments for routine services as defined in 15 U.S.C. § 78dd-1(f)(3)(A). However, in U.S. v. Vistusa Corp., No. 93-253 (S.D.N.Y. 1994), 3 FCPA Rep. 699.158 (1994), the government obtained a guilty plea where the charge was based on payments made to expedite the release of the final payment required under an existing contract that had been performed.
While the anti-bribery provisions are perhaps the best known parts of the FCPA, their scope, as evidenced by the elements noted above, is not as broad as the books, records and internal control provisions. At the same time, there is a clear interplay between the anti-bribery and books, records and internal control provisions.
Next: Recent court decisions