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Bill Seeks To Capture The Demand Side Of Foreign Bribery Through Amendment To 18 USC 201

The Foreign Corrupt Practices Act only captures one participant in a bribery scheme (the so-called supply side) in what is nearly always a two participant scheme. For more on this dynamic, see this recent FCPA Flash podcast episode [1] with Tom Firestone (Baker & McKenzie) for how the demand side of bribery can be best addressed from a legal and policy perspective.

This bill titled “Foreign Extortion Prevention Act” [2] recently introduced in the House by Representatives Sheila Jackson Lee (D- TX), John Curtis (R-UT), Tom Malinowski (D- NJ), and Richard Hudson (R-NC) seeks to “prohibit a foreign official from demanding a bribe.”

The bill seeks to prohibit such conduct – not through amending the FCPA – but through amending 18 USC 201 (the domestic bribery statute).

Set forth below is the existing text of 18 USC 201 with additional language from the “Foreign Extortion Prevention Act” included in red.

(a) For the purpose of this section

(1) the term “public official” means Member of Congress, Delegate, or Resident 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, [3] 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;

(2) the term “person who has been selected to be a public official means any person who has been nominated or appointed to be a public official, [3] or has been officially informed that such person will be so nominated or appointed; and

(3) the term “official act” means any decision or action on any question, matter, cause, suit, proceeding or controversy, which may at any time be pending, or which may by law be brought before any public official, in such official’s official capacity, or in such official’s place of trust or profit.

(4) The term ‘foreign official’ means any officer or employee—

(A) of a foreign government or any department, agency, or instrumentality thereof;

(B) of a public international organization; or

(C) any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.

(5) The term ‘public international organization’ means –

(A) an organization that is designated by Executive Order pursuant to section 1 of the International Organizations Immunities Act (22 U.S.C. 288); or

(B) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register’’

(b) Whoever—

(1) directly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official or any person who has been selected to be a public official to give anything of value to any other person or entity, with intent –

(A) to influence any official act; or

(B) to influence such public official or person who has been selected to be a public official to commit or aid in committing, or collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or

(C) to induce such public official or such person who has been selected to be a public official to do or omit to do any act in violation of the lawful duty of such official or person;

(2) being a public official or person selected to be a public official, directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for:

(A) being influenced in the performance of any official act;

(B) being influenced to commit or aid in committing, or to collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or

(C) being induced to do or omit to do any act in violation of the official duty of such official or person;

(3) directly or indirectly, corruptly gives, offers, or promises anything of value to any person, or offers or promises such person to give anything of value to any other person or entity, with intent to influence the testimony under oath or affirmation of such first-mentioned person as a witness upon a trial, hearing, or other proceeding, before any court, any committee of either House or both Houses of Congress, or any agency, [3]commission, or officer authorized by the laws of the United States to hear evidence or take testimony, or with intent to influence such person to absent himself therefrom;

(4) directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity in return for being influenced in testimony under oath or affirmation as a witness upon any such trial, hearing, or other proceeding, or in return for absenting himself therefrom;

shall be fined under this title or not more than three times the monetary equivalent of the thing of value, whichever is greater, or imprisoned for not more than fifteen years, or both, and may be disqualified from holding any office of honor, trust, or profit under the United States.

(c) Whoever—

(1) otherwise than as provided by law for the proper discharge of official duty—

(A) directly or indirectly gives, offers, or promises anything of value to any public official, former public official, or person selected to be a public official, for or because of any official act performed or to be performed by such public official, former public official, or person  selected to be a public official; or

(B) being a public official, former public official, or person selected to be a public official, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed by such official or person; [3]

(2) directly or indirectly, gives, offers, or promises anything of value to any person, for or because of the testimony under oath or affirmation given or to be given by such person as a witness upon a trial, hearing, or other proceeding, before any court, any committee of either House or both Houses of Congress, or any agency, [3] commission, or officer authorized by the laws of the United States to hear evidence or take testimony, or for or because of such person’s absence therefrom;

(3) directly or indirectly, demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of the testimony under oath or affirmation given or to be given by such person as a witness upon any such trial, hearing, or other proceeding, or for or because of such person’s absence therefrom; shall be fined under this title or imprisoned for not more than two years, or both.

(d) Paragraphs (3) and (4) of subsection (b) and paragraphs (2) and (3) of subsection (c) shall not be construed to prohibit the payment or receipt of witness fees provided by law, or the payment, by the party upon whose behalf a witness is called and receipt by a witness, of the reasonable cost of travel and subsistence incurred and the reasonable value of time lost in attendance at any such trial, hearing, or proceeding, or in the case of expert witnesses, a reasonable fee for time spent in the preparation of such opinion, and in appearing and testifying.

(e) The offenses and penalties prescribed in this section are separate from and in addition to those prescribed in sections 1503, 1504, and 1505 of this title.

(f) Whoever, being a foreign official or person selected to be a foreign official, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for—

(1) being influenced in the performance of any official act; or

(2) being induced to do or omit to do any act in violation of the official duty of such official or person,

shall be fined under this title or imprisoned for not more than two years or both.

If enacted, the Foreign Extortion Prevention Act is sure to suffer from jurisdictional hurdles in prosecuting corrupt foreign officials and butt up against the presumption against extraterritoriality (see here [4]).

Moreover, the placement of a statutory scheme concerning bribe demands by foreign officials in 18 USC 201 (a domestic bribery statute) is odd and could lead to several areas of incongruous between liability for the “bribe” payor (what the FCPA captures) and the “bribe” demander (what the Foreign Extortion Prevention Act seeks to capture).

For instance, potential liability for the “bribe” demander has the qualifying element of “official act” or “official duty” whereas the FCPA’s anti-bribery provisions applicable to the “bribe” payor concerns, as relevant here to:

“influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person.”

In other words, there would appear to be different standards of liability for the “bribe” payor (under the FCPA’s anti-bribery provisions) vs. the “bribe” demander (under the Foreign Extortion Prevention Act).

Moreover, what happens if what the foreign official is demanding, seeking, etc. qualifies as a facilitation payment under the FCPA’s anti-bribery provisions? The Foreign Extortion Prevention Act is silent on this relevant issue.

Moreover, what happens if what the foreign official is demanding, seeking, etc. qualifies as a reasonable and bona fide expenditure under the affirmative defense to the FCPA’s anti-bribery provisions? Again, the Foreign Extortion Prevention Act is silent on this relevant issue.

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