As an enhancement to the decades-old Foreign Corrupt Practices Act, the introduction of the Foreign Extortion Prevention Act (FEPA) expands the combat against corruption on global stages. Not only does it provide U.S. prosecutors with tools to challenge the “supply side”, but also amplifies the government’s ability to prosecute the “demand side” in foreign bribery scenarios by criminalizing the solicitation and acceptance of bribes by foreign government officials.
The full potential and scope of FEPA since its introduction in December remain to be seen, citing the numerous legal and political obstacles involved in the prosecution of foreign officials. However, it is evident that the law brings higher corruption risks and exposure for U.S. and international companies.
Under FEPA, the chances of U.S. prosecutors filing conspiracy and aiding and abetting charges might increase. FEPA widens the definition of a foreign official to encompass not just individuals operating officially for foreign governments, but also those acting unofficially. It covers individuals without official government roles but holding significant political influence, as well as the broader category of “any senior foreign political figure”. This unique feature is made possible due to FEPA’s distinct placement in the bribery statute, separate from Title 15 of the FCPA.
The placement of FEPA in the bribery statute, paired with clear language granting extraterritorial jurisdiction potentially circumvents limitations placed by United States v. Hoskins on the prosecution of foreign individuals in FCPA cases. In the Hoskins case, a ruling decided that the government could not prosecute a class of individuals excluded from liability under a criminal statute, based on accomplice theories of liability.
Moreover, FEPA could serve as another tool in the hands of U.S. prosecutors for pursuing civil asset forfeiture cases, or filing Racketeer Influenced and Corrupt Organizations Act cases by naming a FEPA violation as a predicate act.
Lastly, with stringent reporting requirements in place, FEPA possibly encourages information sharing between international law enforcement agencies, leading to an increase in corruption investigations. With its expanded scope and powers, it is essential for companies to update anti-corruption and compliance risk assessments, have robust reporting mechanisms, maintain effective whistleblower programs, and continuously review and strengthen compliance accordingly.