On December 14, 2023, the United States House and Senate passed the National Defense Authorization Act (NDAA), which included the Foreign Extortion Prevention Act (FEPA). This bipartisan legislation, which Senator Sheldon Whitehouse (D-RI) and Congressman Joe Wilson (R-SC) sponsored and President Biden is expected to sign, criminalizes the solicitation of bribes by foreign officials, even those acting in an unofficial capacity, while on U.S. soil. It is a legal complement to the Foreign Corrupt Practices Act (FCPA), which targets individuals who pay such bribes. In other words, the FCPA targets the suppliers of bribes, while FEPA targets the demanders of bribes. 

This new legislation comes with significant teeth – imposing a prison sentence of up to 15 years and a fine up to $250,000, or three times the monetary equivalent of the bribe. It enhances the tools available to the U.S. Department of Justice as the agency elevates and pursues anti-corruption efforts. These efforts align with the priority that President Biden has given to combatting corruption that “corrodes democracy.” FEPA's steep penalties may serve as powerful deterrents to corrupt foreign officials. According to Transparency International U.S., FEPA is a “powerful new tool for fighting foreign corruption at its source and for protecting Americans and American businesses working abroad.” 

In particular, the FEPA would make it a crime for a foreign official to demand or accept a bribe from an American or American company, or from any person while in the territory of the United States, in connection with obtaining or retaining business. FEPA’s definition of a “Foreign official” is more broadly defined than under the FCPA and includes any employee of a foreign government or any current or former senior official of a foreign government’s executive, legislative, judicial, or military branches or any immediate family member or close associate. Under the FEPA, the United States Government may prosecute foreign officials who demand bribes, even if their home country does not. Under the FEPA (18 U.S.C. § 201(f)), it is “unlawful for any foreign official or person selected to be a foreign official to corruptly demand, seek, receive, or accept, or agree to receive or accept” something of value in exchange for: 

A. [B]eing influenced in the performance of any official act;
B. [B]eing induced to do or omit to do any act in violation of the official duty of such foreign official or person; or
C. [C]onferring any improper advantage, in connection with obtaining or retaining business for or with, or directing business to, any person.

Takeaways

• The FEPA is a new criminal offense specifically targeting demands from foreign officials for bribes and is similar in many respects to the FCPA. There are important differences, however, including a broader definition of a “foreign official” than under the FCPA. Compare 15 U.S.C. § 78dd-1(f)(1), with 18 U.S.C. § 201(a)(4) (awaiting President’s signature). Companies should revisit their training and compliance materials and educate their employees about the FEPA’s structure, provisions, definitions, and penalties. 
• The FEPA has specific jurisdictional requirements similar to the FCPA. The DOJ will have jurisdiction over foreign officials who violate the FEPA: (1) in the territory of the United States; (2) when making exchanges with any U.S. citizens, residents, or entities residing in or organized under U.S. laws; or (3) when labeled an “issuer” under Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
• Like the FCPA, the FEPA requires proof of a corrupt quid pro quo: the bribe must be provided in exchange for influencing official government action or otherwise conferring an improper business-related benefit. See 18 U.S.C. § 201(f)(1).
• While a significant new tool to fight corruption, the FEPA does not address the practical enforcement considerations or procedural hurdles involved in investigating and prosecuting defendants for actions with a foreign nexus such as foreign cooperation, Mutual Legal Assistance Treaties, diplomatic immunity, and extradition.

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