Featured Expert Contributor, White Collar Crime and Corporate Compliance
Gregory A. Brower is Chief Global Compliance Officer for Wynn Resorts. He also serves on WLF’s Legal Policy Advisory Board and is a former U.S. Attorney.
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With President Biden’s recent signing of the annual National Defense Authorization Act (“NDAA”), a part of that bill, the Foreign Extortion Prevention Act (“FEPA”) also became law. The FEPA’s enactment is intended to fill a gap in the Foreign Corrupt Practices Act (“FCPA”) which has long criminalized the payment of bribes to foreign government officials by U.S. companies but does not similarly address the demand for or receipt of such payments. This new law makes it unlawful for a foreign government official to “corruptly demand, seek, receive, accept, directly or indirectly, anything of value” as a bribe for conferring any business advantage to a U.S. company.
While, in theory, this change in the law enhances the U.S. Department of Justice’s ability to combat international corruption by addressing the demand side of the equation, potential challenges remain. Chief among these challenges is the practical problem of extraditing and prosecuting foreign actors from certain target-rich countries such as China or Russia. So, while foreign government officials may now technically be criminally liable for demanding or receiving corrupt payments under U.S. law, actual prosecutions may be elusive. This challenge notwithstanding, the FEPA nevertheless sends a clear message from the U.S. that demanding or receiving corrupt payments is every bit as illegal as making them, thus furthering DOJ’s strong global anti-corruption agenda.
Beyond the FEPA’s change to the U.S. domestic bribery statute, the new law requires DOJ to report to Congress annually on the details of bribery-related activities by foreign government officials and to post the report on its publicly available website. The report is required to include detailed information about foreign bribery demands and efforts by the relevant foreign governments and the U.S. government to protect U.S. companies from such activity. Described by some as a “name and shame” list, this report is intended to publicly identify bad actors in a way that will have a deterrent effect.
The FEPA’s enactment suggests at least potential action items for U.S. company’s compliance programs:
(1) Review/Update Policies. To the extent a company’s anti-corruption policy defines foreign corruption, it should clarify that both the “supply” and the “demand” side of the equation are now addressed by U.S. criminal law. Such policies should also provide clear guidance to employees and agents about what to do when confronted with corrupt demands.
(2) Update Training. In line with updating anti-corruption policies, as necessary, training on such policies should also be updated to ensure that trainees understand that corrupt demands are now addressed by the U.S. code and that employees and agents of U.S. companies should report any such activity to the legal or compliance departments within the organization.
(3) Monitor DOJ Guidance. In the months ahead, DOJ is likely to issue guidance on exactly how the FEPA will be interpreted and enforced. Corporate compliance leaders will want to monitor this guidance to meet DOJ’s expectations for U.S. companies.
As the Biden Administration continues to emphasize that international corruption poses an existential threat to prosperity, security, and democracy, both at home and abroad, aggressive prosecutions by DOJ can be expected to continue and expand in the months ahead. U.S. companies are well advised to maintain a parallel focus on robust anti-corruption efforts in accordance with their unique risk profiles and with a focus on reporting efforts by bad actors who would seek to violate U.S. law.