Ever since the Foreign Extortion Prevention Act (FEPA) was proposed in Congress nearly five years ago and through its enactment in late 2023, this site has explained how FEPA was a muddy mess in terms of its statutory language. This prior post even suggested specific amendments to the Foreign Corrupt Practices Act to capture the so-called demand side of bribery – if indeed Congress determined that such a law was necessary.
Nevertheless, Congress plowed forward and FEPA was inserted into the massive FY2024 National Defense Authorization Act without any seeming meaningful discussion or debate about its statutory text.
It’s not often that a piece of legislation sitting around in Congress for nearly five years prior to enactment is almost immediately amended, but this has happened with FEPA.
On July 30th, the so-called Foreign Extortion Prevention Technical Corrections Act become law (Public Law No. 118-78). (See here).
Similar to the originally enacted FEPA, the revised FEPA is also a muddy mess in terms of its statutory language.
For starters, the “new” FEPA is now part of Chapter 63 of Title 18 of the U.S. Code (Mail Fraud and Other Fraud Offenses) whereas the original FEPA was part of Chapter 11 of Title 18 of the U.S. Code (Bribery, Graft, and Conflicts of Interest).
The revised FEPA states:
18 USC 1352 Demands by foreign officials for bribes
(a) DEFINITIONS.—In this section: ‘
(1) FOREIGN OFFICIAL.—The term ‘foreign official’ means— ‘
(A)(i) any official or employee of a foreign government or any department, agency, or instrumentality thereof; or (ii) any senior foreign political figure, as defined in section 1010.605 of title 31, Code of Federal Regulations, or any successor regulation;
(B) any official or employee of a public international organization;
(C) any person acting in an official capacity for or on behalf of— (i) a government, department, agency, or instrumentality described in subparagraph (A)(i); or ‘‘(ii) a public international organization.
(2) PUBLIC INTERNATIONAL ORGANIZATION.—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 the order in the Federal Register.
(b) PROHIBITION OF DEMAND FOR A BRIBE.—
(1) OFFENSE.—It shall be unlawful for any foreign official or person selected to be a foreign official to corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value personally or for any other person or nongovernmental entity, by making use of the mails or any means or instrumentality of interstate commerce—
(A) from— (i) any person (as defined in section 104A of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd– 3), except that that definition shall be applied without regard to whether the person is an offender) while the foreign official or person selected to be a foreign official, or a person acting on behalf of the foreign official or person selected to be a foreign official, is in the territory of the United States;
(ii) an issuer (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))), or any officer, director, employee, or agent of an issuer or any stockholder thereof acting on behalf of the issuer; or
(iii) a domestic concern (as defined in section 104 of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd–2)), or any officer, director, employee, or agent of a domestic concern or any stockholder thereof acting on behalf of the domestic concern; and
(B) in return for—
(i) being influenced in the performance of any act or decision of the foreign official or person selected to be a foreign official in the official capacity of the foreign official or person selected to be a foreign official;
(ii) being induced to do or omit to do any act in violation of the lawful duty of the foreign official or person selected to be a foreign official;
(iii) conferring any improper advantage; or
(iv) using the influence of the foreign official or person selected to be a foreign official with a foreign government or instrumentality thereof to affect or influence any act or decision of that government or instrumentality,
in connection with obtaining or retaining business for or with, or directing business to, any person.
(2) PENALTIES.—Any person who violates paragraph (1) shall be fined not more than $250,000 or 3 times the monetary equivalent of the thing of value, imprisoned for not more than 15 years, or both.
(3) JURISDICTION.—An offense under paragraph (1) shall be subject to extraterritorial Federal jurisdiction.
(4) REPORT.—Not later than 1 year after the date of enactment of this section, and annually thereafter, the Attorney General, in consultation with the Secretary of State as relevant, shall submit to the Committee on the Judiciary and the Committee on Foreign Relations of the Senate and the Committee on the Judiciary and the Committee on Foreign Affairs of the House of Representatives, and post on the publicly available website of the Department of Justice, a report—
(A) focusing, in part, on demands by foreign officials for bribes from entities domiciled or incorporated in the United States, and the efforts of foreign governments to prosecute such cases;
(B) addressing United States diplomatic efforts to protect entities domiciled or incorporated in the United States from foreign bribery, and the effectiveness of those efforts in protecting such entities;
(C) summarizing major actions taken under this section in the previous year, including enforcement actions taken and penalties imposed;
(D) evaluating the effectiveness of the Department of Justice in enforcing this section; and
(E) detailing what resources or legislative action the Department of Justice needs to ensure adequate enforcement of this section.
(5) RULE OF CONSTRUCTION.—This subsection shall not be construed as encompassing conduct that would violate section 30A of the Securities Exchange Act of 1934 (15 U.S.C. 78dd–1) or section 104 or 104A of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd–2; 15 U.S.C. 78dd–3) whether pursuant to a theory of direct liability, conspiracy, complicity, or otherwise.’’
This statutory language remains a muddy mess and is different than similar language in the FCPA.
For instance, FEPA contains a much more expansive definition of “foreign official” compared to the FCPA.
The FCPA defines foreign official as follows:
“The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or 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.”
FEPA defines foreign official as follows:
The term ‘foreign official’ means— ‘
(A)(i) any official or employee of a foreign government or any department, agency, or instrumentality thereof; or (ii) any senior foreign political figure, as defined in section 1010.605 of title 31, Code of Federal Regulations, or any successor regulation;
(B) any official or employee of a public international organization;
(C) any person acting in an official capacity for or on behalf of— (i) a government, department, agency, or instrumentality described in subparagraph (A)(i); or ‘‘(ii) a public international organization.
Section 1010.605 of Title 31, Code of Federal Regulations defines “Senior Foreign Political Figure” as follows.
The term senior foreign political figure means:
(i) A current or former:
(A) Senior official in the executive, legislative, administrative, military, or judicial branches of a foreign government (whether elected or not);
(B) Senior official of a major foreign political party; or
(C) Senior executive of a foreign government-owned commercial enterprise;
(ii) A corporation, business, or other entity that has been formed by, or for the benefit of, any such individual;
(iii) An immediate family member of any such individual; and
(iv) A person who is widely and publicly known (or is actually known by the relevant covered financial institution) to be a close associate of such individual.
(2) For purposes of this definition:
Senior official or executive means an individual with substantial authority over policy, operations, or the use of government-owned resources; and Immediate family member means spouses, parents, siblings, children and a spouse’s parents and siblings.
By including the term “senior foreign political figure” (itself a defined term) in the definition of “foreign official,” FEPA defines “foreign official” much more expansively than the FCPA to include, among others, former “foreign officials,” “spouses, parents, siblings, children and a spouse’s parents and siblings” of “foreign officials” and “any person who is widely and publicly known … to be a close associate” of a “foreign official.”
The FCPA’s core offense is:
“It shall be unlawful … to offer, pay[], promise to pay, or authoriz[e] of the payment of any money, or offer, gift, promise to give, or authoriz[e] of the giving of anything of value to–
(1) any foreign official for purposes of–
(A) (i) 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
(B) 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;
(2) any foreign political party or official thereof or any candidate for foreign political office for purposes of–
(A) (i) influencing any act or decision of such party, official, or candidate in its or his official capacity, (ii) inducing such party, official, or candidate to do or omit to do an act in violation of the lawful duty of such party, official, or candidate, or (iii) securing any improper advantage;
or (B) inducing such party, official, or candidate to use its or 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; or
(3) any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official, to any foreign political party or official thereof, or to any candidate for foreign political office, for purposes of–
(A) (i) influencing any act or decision of such foreign official, political party, party official, or candidate in his or its official capacity, (ii) inducing such foreign official, political party, party official, or candidate to do or omit to do any act in violation of the lawful duty of such foreign official, political party, party official, or candidate, or (iii) securing any improper advantage; or
(B) inducing such foreign official, political party, party official, or candidate to use his or its 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.
The FEPA’s core offense is:
It shall be unlawful for any foreign official or person selected to be a foreign official to corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value personally or for any other person or nongovernmental entity, by making use of the mails or any means or instrumentality of interstate commerce
[from a person other than an issuer or domestic concern, an issuer, or a domestic concern – all terms defined in the FCPA]
(B) in return for—
(i) being influenced in the performance of any act or decision of the foreign official or person selected to be a foreign official in the official capacity of the foreign official or person selected to be a foreign official;
(ii) being induced to do or omit to do any act in violation of the lawful duty of the foreign official or person selected to be a foreign official;
(iii) conferring any improper advantage; or
(iv) using the influence of the foreign official or person selected to be a foreign official with a foreign government or instrumentality thereof to affect or influence any act or decision of that government or instrumentality,
in connection with obtaining or retaining business for or with, or directing business to, any person.
As previously discussed, by including the term “senior foreign political figure” (itself a defined term) in the definition of “foreign official,” FEPA defines “foreign official” much more expansively on the FCPA to include, among others, former “foreign officials,” “spouses, parents, siblings, children and a spouse’s parents and siblings” of “foreign officials” and “any person who is widely and publicly known … to be a close associate” of a “foreign official.”
However, this expansive category of individuals do not possess any “official capacity,” or have any “lawful dut[ies].”
Moreover, FEPA sets forth conflicting jurisdictional elements. In the early part of the statutory text, FEPA sets forth a territorial jurisdictional element “use of the mails or any means or instrumentality of interstate commerce.”
However, later in the statutory text FEPA states:
(3) JURISDICTION.—An offense under paragraph (1) shall be subject to extraterritorial Federal jurisdiction.
The Congressional Record (July 22, 2024) contains the following statement from Representative Darryl Issa (R-CA) regarding the “new” FEPA:
S. 4548 makes technical and conforming changes to the Foreign Extortion Prevention Act, which was enacted as part of last year’s National Defense Authorization Act.
The FEPA was introduced to create a Federal offense that would contemplate a Foreign Corruption Practices Act. Again, the Foreign Corruption Practices Act, which has been in place for many years, is the act that the American people rely on to make sure that Americans, no matter where they are doing business, abide by U.S. practices, no bribes, and no mislaid funds. In fact, it is the reason that the United States is the envy of the world when it comes to contracting with our companies.
While the FCPA prohibits the paying of a bribe to a foreign official, the FEPA prohibits the demanding of a bribe by a foreign official. However, the FEPA text that was enacted last year in the NDAA had several flaws.
First, the law was added to the domestic bribery statute in title 18, creating an inconsistency in the sections that are being defined in the elements of the crime. These inconsistencies may prevent the FEPA and the domestic bribery statute from operating in the way that Congress intended.
Second, there were inconsistencies between the language of the FCPA and the FEPA. Because these statutes are intended to be complementary, with parts of them addressing the same problem, we need to harmonize it.
For that reason, this technical and conforming change has been brought to the committee’s attention. We stand for it, we have reviewed it, and in fact, we hope that all will vote on it.”
The Congressional Record also contains the following statement from Representative Jerry Nadler (D-NY) regarding the “new” FEPA:
“I rise in strong support of S. 4548, the Foreign Extortion Prevention Technical Corrections Act.
Last year, we enacted the Foreign Extortion Prevention Act, or FEPA, landmark legislation that would combat kleptocracy and help protect the rule of law.
FEPA was the first expansion of our country’s antibribery and anticorruption laws in nearly 50 years. This law provides another useful tool to combat corruption and stop it at its source by making it a crime for any foreign official to solicit or accept a bribe from any American person or American company.
It was already the law that U.S. persons who offer to pay bribes overseas could be prosecuted, but there was no corresponding law prohibiting foreign entities and officials from demanding or accepting bribes.
Foreign corrupt officials too often demand bribes from companies hoping to do business with them. This unethical practice unfairly benefits dishonest companies, granting them a competitive advantage, and placing law-abiding companies and citizens, including American ones, at a disadvantage.
FEPA changed that by stopping corruption at its source. The passage of FEPA was a watershed moment for our democracy, particularly because research shows that the vast majority of bribe-demanding foreign officials never face consequences in their own countries. FEPA makes it much harder for these foreign officials to cultivate a culture where corruption and bribery are the norm.
After FEPA was enacted into law, it became clear that certain technical corrections were necessary to fully effectuate the law. This legislation would make those necessary changes to ensure that our fight to end corruption is well equipped. I was proud to vote for FEPA last year, and I am proud to vote for it again through this bill.
I must observe that consideration of this bill is bittersweet today because the House sponsor of FEPA was our late, beloved colleague, Shelia Jackson Lee, who we lost just this past weekend.
Her impact on this Chamber was immeasurable, and she was the champion of so many issues from criminal justice to voting rights to civil rights and civil liberties and so much more.
She was also passionate about fighting against corruption, both at home and abroad, and passage of today’s bill would be a small tribute to the mark that she has left on this country and on all of us.
This legislation simply makes technical corrections to the Foreign Extortion Prevention Act, important bipartisan anticorruption legislation, which was enacted last year. This bill has already passed the Senate. I urge all Members to support the bill and send it to the President’s desk.”
