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When It Wants To, Congress Knows How To Speak

The FCPA defines “foreign official” as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof …”.  One of the arguments in the “foreign official” challenges  is that “where Congress wants to define ‘instrumentality’ to include state-owned enterprises, it knows how to do so.”  (See pg. 30 of the Carson brief summarized in this previous post).

My “foreign official” declaration (see here) notes as follows.  “There is no express statement or information in the FCPA’s legislative history describing the ‘any department, agency, or instrumentality’ portion of the “foreign official” definition. Further, there is no express statement or information in the FCPA’s legislative history to support the DOJ’s expansive legal interpretation that alleged SOEs are ‘instrumentalities’ (or ‘departments’ or ‘agencies’) of a foreign government and that employees of SOEs are therefore ‘foreign officials’ under the FCPA’s anti-bribery provisions. However, there are several statements, events, and information in the FCPA’s legislative history that demonstrate that Congress did not intend the ‘foreign official’ definition to include employees of SOEs.   […]   During its multi-year investigation of foreign corporate payments that preceded enactment of the FCPA, Congress was aware of the existence of SOEs and that some of the questionable payments uncovered or disclosed may have involved such entities.  Indeed, in certain of the competing bills introduced in Congress to address foreign corporate payments, the definition of ‘foreign government”’ expressly included SOEs. These bills were introduced in both the Senate and the House during both the 94th (1975-76) and 95th (1977-78) Congresses.  […]  However, despite being aware of SOEs, despite exhibiting a capability for drafting a definition that expressly included SOEs in other bills, and despite being provided a more precise way to describe SOEs, Congress chose not to include such definitions or concepts in S. 305, the bill that ultimately became the FCPA in December 1977.”

As noted in the Carson brief, in the Foreign Sovereign Immunities Act (passed a year before the FCPA), the term “agency or instrumentality of a foreign state means any entity which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision.”  In short, Congress knew how to embed SOE concepts in the FSIA when it wanted to.

Similarly, as noted in the Carson brief, Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (which became law in 201o) and imposes requirements on certain resource extraction issues to, among other things, disclose information regarding payments made to “foreign governments” for the purpose of the commercial development of oil, natural gas or minerals, defines “foreign government” to “include [] a department, agency, or instrumentality of a foreign government or a company owned by a foreign government.”  In short, Congress knew how to embed SOE concepts in Dodd-Frank when it wanted to.

A bill introduced by Rep. Chris Smith  last week further demonstrates that when Congress wants to, it knows how to embed SOE concepts into legislation.  The bill, “The Global Online Freedom Act” seeks to  “prevent U.S. businesses from cooperating with repressive governments in transforming the Internet into a tool of censorship and surveillance …”.   The bill defines “foreign official” to mean (i) any officer or employee of a foreign government or of any department; and (ii) any person acting in an official capacity for or on behalf of, or acting under color of law with the knowledge of, any such government or such department, agency, state-owned enterprise, or instrumentality.”  Further, the bill defines “state-owned enterprise” as follows – “a commercial entity in which a foreign government owns or controls, directly or indirectly, more than 50 percent of the outstanding capital stock or other beneficial interest in such commercial entity.”

For the Carson and Lindsey “foreign official” decisions see here and here.  Recently the Lindsey convictions were vacated based on prosecutorial misconduct (see here), the Carson case remains pending.


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