Foreign Corrupt Practices Act

• Author: Stuart H Deming; Truman K Butler; Vivian Robinson
• Pages: 3-42

Through the FCPA, the US Congress sought to deter foreign corrupt prac-

tices—specically the offer or payment of anything of value to FPOs in

connection with business activities—through two principal mechanisms:

the anti-bribery provisions and the accounting and record-keeping provi-

sions. The two sets of provisions are conceptually different from each other.

The former is proscriptive in orientation, and the latter is prescriptive. Their

scope and application are also different.

Essential to any analysis of a situation that may involve an FCPA vio-

lation is the consideration of whether the anti-bribery provisions or the

accounting and record-keeping provisions, or both, may be involved. A

certain set of facts may suggest a violation of the anti-bribery provisions

yet may not suggest a violation of the accounting and record-keeping pro-

visions. Each set of provisions must be considered separately. At the same

time, neither provision should be considered alone. They were intended to

work in tandem and thereby complement one another.

A. The Anti-Bribery Provisions

The anti-bribery provisions prohibit improper inducements to FPOs. An

improper inducement is any promise, offer or payment of anything of value

if the person making the promise, offer or payment knows that a portion

will be used for the purpose of inuencing the conduct of an FPO.

3

Chapter 2

Foreign Corrupt Practices Act

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1. Scope and Application

While the FCPA applies directly to certain categories of individuals and

entities, the ways in which an individual or entity can be indirectly subject

to liability under the FCPA are almost endless. For this reason, regardless

of whether an individual or entity is directly subject to the anti-bribery

provisions of the FCPA, any individual or entity engaged in international

business must assume that he or she, or it, may be subject to the anti-bribery

provisions of the FCPA.

a. Any Person

The anti-bribery provisions apply to both individuals and entities as long

as they are issuers, domestic concerns or they cause an act in furtherance of

an improper inducement to take place within the territory of the US. The

only other consideration is whether an individual or entity is a US person.

(1) US Person

To be a ‘US person’, an individual must be a US citizen or national. For an

entity, a US person is an entity organised under the laws of the US, which

includes the laws of any state, territory, possession, commonwealth or any

subdivision of each. Based solely on an individual’s or entity’s status as a

US person, it makes no difference whether his, her or its involvement has

absolutely no connection to the US. The anti-bribery provisions apply to

that individual or entity regardless of geographic location or relationship

to the US.

(2) All Other Individuals or Entities

For any individual or entity that is not a US person, in order for the anti-

bribery provisions to apply, the individual or entity must use the mails or

means or instrumentality of interstate or foreign commerce of the US in

furtherance of an improper inducement. Given widespread use of telecom-

munications, the internet, air travel, and other forms of communication as

well as modes of making payments, it will be a relatively rare situation where

some form of means or instrumentality of interstate or foreign commerce

of the US is not used in furtherance of an improper inducement.

THE FCPA AND UK B RIBERY ACT4

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b. Accomplices

Regardless of whether an individual or entity is subject to the anti-bribery

provisions, an individual or entity can become liable as an accomplice to

a violation of the anti-bribery provisions. This can occur when an entity

or individual acts as an aider or abettor or as a conspirator to a violation.

(1) Aiders and Abettors

An aider and abettor can be subject to a statutory violation even if that

individual or entity cannot be charged directly with violating the statute.

Nor is the prosecution of an aider and abettor barred when the principal

has been acquitted. To be liable as an aider and abettor, an individual or

entity must act with intent that the offence be committed.

An individual or entity need not actually violate the anti-bribery provi-

sions. It is the conduct on the part of an individual or entity to assist another

party’s violation that may serve as the basis for liability as an accomplice.

Moreover, an individual or entity not directly subject to the anti-bribery

provisions may be exposed to liability as an aider and abettor of an indi-

vidual or entity subject to the anti-bribery provisions.

(2) Conspirators

Except generally for FPOs, persons not otherwise liable under the anti-

bribery provisions may, depending upon the circumstances, be prosecuted

for conspiring to violate their provisions. A conspiracy is established when

two or more persons combine or agree to violate a federal statute. If one

member acts in furtherance of the conspiracy before the other indicates

withdrawal from the conspiracy, both can be held criminally liable for hav-

ing entered into the conspiracy.

When a conspiracy to violate the anti-bribery provisions is involved, no

improper inducement needs to be offered or made. It is the agreement to

violate the anti-bribery provisions that serves as the basis for the criminal

charge. The only additional requirement is that there be an overt act by

one of the co-conspirators in furtherance of the conspiracy to violate the

anti-bribery provisions. Rather insignicant activity can meet this addi-

tional requirement.

5Foreign Corrupt Practices Ac t

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