Two U.S. district courts in Southern California recently rejected defense challenges that might have narrowed the applicability of the Foreign Corrupt Practices Act (FCPA). Both courts rejected arguments that the intended recipients of the alleged bribes—employees of foreign, state-owned enterprises—were not “foreign officials” under the FCPA. These rulings mark the first time that trial courts have set forth factors to be used in identifying the circumstances in which a state-owned enterprise will be considered an instrumentality of a foreign government for purposes of the FCPA.
The FCPA prohibits corrupt offers or payments to foreign officials for the purpose of obtaining or retaining business, or for the purpose of directing business to anyone. Other U.S. statutes prohibit commercial bribery regardless of the recipient’s status.
The FCPA defines a “foreign official” as
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.1
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