Much has been said about the Foreign Extortion Prevention Act (“FEPA”) that President Biden signed into the law in December 2023, with particular attention given to the corrupt foreign officials who seek bribes from individuals or entities in the United States. By targeting the demand side of bribery, FEPA serves as a complement to the Foreign Corrupt Practices Act (“FCPA”), which targets individuals and companies that pay bribes to foreign government officials.

Although FEPA’s main purpose is to stop foreign officials and their cronies from peddling their graft within the United States, the statute also considers the harmful relationships that can be formed between self-serving public policymakers abroad and the private sector here. FEPA imposes serious penalties on any foreign official and their proxies who demand or seek bribes from U.S. companies, or from any person while in the territory of the United States.

The Biden Administration has for several years noted that the demand side of bribery remains a major component in the White House’s strategy for combating global corruption – a strategy that we will explore more fulsomely in an upcoming blog article. For the past several years, the Department of Justice (“DOJ”) has been bringing enforcement actions against foreign government officials who obtained bribes from U.S. persons based on other federal laws, particularly U.S. money laundering statutes.

FEPA creates a new legal regime for the DOJ to specifically go after foreign officials extorting individuals in the United States. It also makes clear that such extortion can be the result of bribes a U.S. company gives – or offers to give – to those officials who hold authority over the company’s business in their homeland. While FEPA is distinct from FCPA in the sense that the DOJ has new authority to prosecute the foreign officials who are engaged in U.S. corruption, they both target the relationship between foreign governments and American industry.

FEPA will thusly apply to any situation where a foreign policymaker(s) and a U.S. business are engaged in mutually beneficial malfeasance – with an official of a foreign country demanding or receiving something of material value in exchange for (1) being “influenced in the performance of any official act;” or (2) providing any “improper advantage” to the company.

As can be seen from FCPA enforcement actions brought in the last few years, anti-corruption enforcement has become increasingly globalized, with law enforcement agencies cooperating on an international scale leading to substantial corporate resolutions. President Biden’s 2021 Strategy on Combatting Corruption highlights 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.” We expect this trend to continue now that FEPA will be enacted into law, especially given the foreign policy and international relations implications of prosecuting foreign government officials.

FEPA’s strong bipartisan support in Congress, coupled with the enforcement actions DOJ has brought and subsequent U.S. sanctions that it imposes, signals that the United States is giving corruption greater of sustainable business practices

U.S. businesses engaged in business abroad should be aware of FEPA and prepare for its enforcement by implementing or strengthening their anti-corruption compliance programs – including through anti-corruption trainings and the incorporation of FEPA risks into regular human rights supply due diligence and standard risk management practices.