U.S. Congress Ushers in a New Era of Anti-Corruption Enforcement

On December 14, 2023, Congress passed the Foreign Extortion Prevention Act (FEPA), a new anti-bribery law being described as “the most sweeping and consequential foreign bribery law in nearly half a century.”¹ Complementing the robustly enforced U.S. Foreign Corrupt Practices Act (FCPA), the FEPA criminalizes the “demand” side of foreign bribery by specifically making it illegal for foreign officials to demand or accept bribes from any United States citizen, company, or resident in exchange for obtaining business. Also like the FCPA, the FEPA attempts to have broad reach over “foreign officials” implicated by the FEPA and defines those officials broadly as (1) “any official or employee of a foreign government or any department, agency, or instrumentality thereof” or (2) any person acting, officially or unofficially, on behalf of a foreign government or public international organization. FEPA violators will face up to 15 years in prison and a maximum fine of $250,000 or three times the value of the bribe. President Joe Biden is expected to sign the FEPA into law soon.

The FEPA has the potential to invigorate the U.S. Department of Justice’s (DOJ’s) global anti-corruption efforts by allowing DOJ to pursue more fulsome prosecutions of all individuals and entities involved in illegal bribery schemes. Currently, DOJ’s main international anti-corruption tool, the FCPA, criminalizes only the “supply” side of bribery by making it illegal for individuals or companies to offer, promise, or provide a bribe to foreign officials. While DOJ has used other tools to attempt to criminalize the “demand” side of foreign bribery (i.e., the corrupt foreign officials themselves), DOJ has not had a law analogous to the FCPA in its toolkit that specifically targeted those foreign officials. This is precisely what the FEPA aims to do: It gives DOJ authority to prosecute foreign officials who accept or demand bribes, and it has the potential to significantly expand the scope and depth of U.S. anti-corruption enforcement.

The FEPA was passed as part of the annual National Defense Authorization Act. It furthers President Biden’s 2021 Strategy on Combatting Corruption, which highlighted that the “the U.S. Government is committed to working with allies and partners on enacting legislation criminalizing the demand side of bribery, and enforcing new and existing laws, including in the countries where the bribery occurs.” The Biden administration has pursued a strong global anti-corruption agenda, and the FEPA’s enactment indicates the administration’s continued commitment to elevating anti-corruption enforcement as a national security priority. Additionally, going forward, the U.S. Attorney General will be required to submit an annual, publicly available report to Congress summarizing major DOJ actions under the FEPA to allow Congress (and the public) to evaluate the effectiveness of DOJ’s enforcement efforts.

Nonetheless, there is still a lot of uncertainty about DOJ’s potential enforcement efforts under the FEPA. For example, it remains to be seen whether DOJ will use FEPA to prosecute new types of cases that it would not have brought under the FCPA or whether it will instead use the FEPA to bolster its existing FCPA enforcement efforts to more wholistically charge anti-corruption cases, including charging the foreign officials involved in these cases. It is also unclear how FEPA enforcement will handle potential jurisdictional challenges; for instance, although the FEPA mirrors the same nexus to the United States requirement as the FCPA (i.e., foreign officials must demand or receive a bribe from issuers, domestic concerns, or any person while within the territory of the United States using “any means or instrumentality of interstate commerce”), DOJ may not be able to reach and ultimately prosecute certain foreign officials that it intends to charge under the FEPA.

Despite these and other questions, it is clear that companies should continue to focus on FCPA-related compliance programs to avoid becoming the target of the government’s continued — and now strengthened — anti-corruption enforcement.

¹ https://us.transparency.org/news/congress-passes-landmark-law-to-criminally-prosecute-corrupt-foreign-leaders/.