Recently, the Office of the U.S. Trade Representative released the text of the United States – Mexico – Canada agreement (USMCA). The extensive agreement has a specific chapter (chapter 27) titled anticorruption and this post offers a few observations regarding the agreement compared to the Foreign Corrupt Practices Act specifically as it relates to “foreign official” issues and the express facilitation payments exception.
The anticorruption chapter bears the header “subject to legal review for accuracy, clarity, and consistency,” yet provides the following definitions:
foreign public official means any person holding a legislative, executive, administrative or judicial office of a foreign country, at any level of government, whether appointed or elected, whether permanent or temporary, whether paid or unpaid, irrespective of that person’s seniority; and any person exercising a public function for a foreign country, at any level of government, including for a public agency or public enterprise;
public enterprise means any enterprise, regardless of its legal form, over which a government, or governments, may, directly or indirectly, exercise a dominant influence (a footnote then states: “dominant influence for purposes of this definition shall be deemed to exist, inter alia, if the government or governments hold the majority of the enterprise’s subscribed capital, control the majority of votes attaching to shares issued by the enterprise, or can appoint a majority of the members of the enterprise’s administrative or managerial body or supervisory board”).
public official means: (a) any person holding a legislative, executive, administrative or judicial office of a Party, whether appointed or elected, whether permanent or temporary, whether paid or unpaid, irrespective of that person’s seniority; (b) any other person who performs a public function for a Party, including for a public agency or public enterprise, or provides a public service, as defined under the Party’s law and as applied in the pertinent area of that Party’s law; or (c) any other person defined as a public official under a Party’s law.
The above definitions are clearly different – from the perspective of the disputed legal interpretation that individuals associated with alleged state-owned or state-controlled enterprises are “foreign officials” under the FCPA – in that the FCPA’s definition of “foreign official” is as follows:
“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.”
The above definitions in the USMCA once again clearly demonstrate (as highlighted in several prior posts including here) that when the U.S. government wants to, it knows how to draft language that expressly captures SOEs – something the FCPA clearly fails to do even though bills introduced during the FCPA’s legislative process clearly did but were never enacted. (To learn more see here).
Regarding facilitation payments, it is undisputed that the FCPA exempts such payments from the reach of the anti-bribery provisions (even though in the minds of many the FCPA enforcement agencies have generally read this exception out of the statute through its enforcement decisions).
Given the FCPA’s express exemption, it is interesting to note that the USMCA provides as follows:
“The Parties recognize the harmful effects of facilitation payments. Each Party shall, in accordance with its domestic laws and regulations: (a) encourage enterprises to prohibit or discourage the use of facilitation payments; and (b) take steps to raise awareness among its public officials of its domestic bribery laws, with a view to stopping the solicitation and the acceptance of facilitation payments.”
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