The DOJ’s Justice Manual (JM) “provides internal DOJ guidance.” (See here).
The portion discussing the Foreign Corrupt Practices Act (Title 9-47.000) was recently updated to include the recently enacted Foreign Extortion Prevention Act (FEPA).
While the JM is not exactly a legal treatise, it is disappointing (but perhaps not surprising) that the FCPA portion is misleading in certain respects (often by omission).
The JM says the following about the FCPA.
“The Foreign Corrupt Practices Act (FCPA), which prohibits both United States and foreign corporations and nationals from offering or paying, or authorizing the offer or payment, of anything of value to a foreign government official, foreign political party, party official, or candidate for foreign public office, or to an official of a public international organization in order to obtain or retain business.”
For starters, the FCPA’s recipient category is “foreign official” – not “foreign government official” – perhaps a minor point, but that is the legal element.
Second, the FCPA’s anti-bribery provisions only apply to “foreign corporations and nationals” to the extent there is a U.S. nexus (generally speaking) in connection with a bribery scheme.
The JM also omits that the offer or payment of anything of value to a foreign official must be for the 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 … in obtaining or retaining business for or with, or directing business to, any person;”
The JM further states:
“In addition, the FCPA requires publicly held United States companies to make and keep books and records which, in reasonable detail, accurately reflect the disposition of company assets and to devise and maintain a system of internal accounting controls sufficient to reasonably assure that transactions are authorized, recorded accurately, and periodically reviewed.”
This too is misleading by omission in that the FCPA’s books and records and internal controls provisions don’t just apply to “publicly held United States companies” but also foreign companies with shares traded on a U.S. exchange or otherwise with certain reporting obligations to the SEC. The number of foreign “issuers” fluctuates year to year, but includes approximately 1,000 companies.
The new FEPA portion states:
“The Foreign Extortion Prevention Act (FEPA), which criminalizes the “demand side” of foreign bribery by prohibiting foreign officials from demanding, seeking, receiving, accepting, or agreeing to receive or accept anything of value from certain individuals and entities.”
Like the DOJ’s long-standing FCPA investigation and prosecution protocol which centralizes institution of an FCPA investigation with Main Justice, the DOJ has adopted a similar approach to FEPA.
The revised Title 9-47.110 of the JM states:
Policy Concerning Criminal Investigations and Prosecutions of the Foreign Corrupt Practices Act and the Foreign Extortion Prevention Act
“No investigation or prosecution of cases involving alleged violations of the antibribery provisions of the Foreign Corrupt Practices Act (FCPA) of 1977 (15 U.S.C. §§ 78dd-1, 78dd-2, and 78dd-3), related violations of the FCPA’s record keeping provisions (15 U.S.C. § 78m(b)), or violations of the Foreign Extortion Prevention Act (FEPA) of 2023 shall be instituted without the express authorization of the Criminal Division.
Any information relating to a possible violation of the FCPA or FEPA should be brought immediately to the attention of the Fraud Section of the Criminal Division. Even when such information is developed during the course of an apparently unrelated investigation, the Fraud Section should be notified immediately. Close coordination of such investigations and prosecutions with the U.S. Securities and Exchange Commission (SEC) and other interested agencies is essential. Additionally, the Department has established a FCPA Opinion Procedure concerning proposed business conduct. SeeA Resource Guide to the U.S. Foreign Corrupt Practices Act.
Unless otherwise agreed upon by the Assistant Attorney General (AAG), Criminal Division, investigations and prosecutions of alleged violations of the antibribery provisions of the FCPA or FEPA will be conducted by Trial Attorneys of the Fraud Section. Prosecutions of alleged violations of the FCPA’s record keeping provisions, when such violations are related to an antibribery violation, will also be conducted by Fraud Section Trial Attorneys, unless otherwise directed by the AAG, Criminal Division.
The investigation and prosecution of particular allegations of violations of the FCPA or FEPA will raise complex enforcement problems abroad as well as difficult issues of jurisdiction and statutory construction. For example, part of the investigation may involve interviewing witnesses in foreign countries concerning their activities with high-level foreign government officials. In addition, relevant accounts maintained in United States banks and subject to subpoena may be directly or beneficially owned by senior foreign government officials. For these reasons, the need for centralized supervision of investigations and prosecutions under the FCPA and FEPA is compelling. In addition, the investigation, arrest, or prosecution of a foreign government official may implicate national security or diplomatic interests and require coordination with other law enforcement and government agencies in the United States and abroad.”
You may have heard the narrative that the FCPA is a simple statute and compliance is easy.
But there it is.
The DOJ recognizes that FCPA (and FEPA) issues “will raise … difficult issues of … statutory construction.”
