Demands by Foreign Officials for Bribes

Demands by Foreign Officials for Bribes - 18 U.S. Code § 1352

The Foreign Extortion Prevention Act (FEPA), embodied in 18 U.S. Code § 1352, is a federal law that aims to protect the integrity of international commerce by prohibiting foreign officials from corruptly requesting or accepting anything of value in exchange for exerting influence, violating their official duties, or granting improper advantages (in effect, quid pro quo).

The FEPA prohibits foreign officials from requesting anything of value for exerting influence or gaining an advantage.

The law, part of a broader international anti-corruption effort, aims to protect businesses from undue pressure or exploitation. It's crucial to note that if you're a foreign official charged with this crime, you could face significant fines and up to 15 years in prison, underscoring the serious consequences of violating FEPA.

FEPA stands out with its unique emphasis on the 'demand' side of foreign bribery. This innovative approach empowers the U.S. to penalize foreign officials for soliciting bribes from U.S. individuals, companies, or organizations. Such a focus could potentially reduce the risk of extortion for U.S. entities.

FEPA makes it a crime for any foreign official, including 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 to demand or accept a bribe from an American company, or from anyone while in United States territory in connection with obtaining or retaining business.

The motivation behind FEPA is rooted in the need to address a significant gap in U.S. anti-corruption legislation.

While existing laws such as the Foreign Corrupt Practices Act (FCPA) penalize U.S. companies and individuals for bribing foreign officials, no corresponding legal mechanism has held those foreign officials accountable for demanding bribes.

What Does Federal Law Say?

18 U.S. Code § 1352 - Demands by foreign officials for bribes says -

"(b) Prohibition of Demand for a Bribe.-

(1) Offense. It shall be unlawful for any foreign official or person selected to be a foreign official to corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value personally or for any other person or nongovernmental entity, by making use of the mails or any means or instrumentality of interstate commerce-

(A) from (i) any person (as defined in section 104A of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-3), except that that definition shall be applied without regard to whether the person is an offender) while the foreign official or person selected to be a foreign official, or a person acting on behalf of the foreign official or person selected to be a foreign official, is in the territory of the United States.

(ii) an issuer (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))), or any officer, director, employee, or agent of an issuer or any stockholder thereof acting on behalf of the issuer; or

(iii) a domestic concern (as defined in section 104 of the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-2)), or any officer, director, employee, or agent of a domestic concern or any stockholder thereof acting on behalf of the domestic concern; and

(B) In return for (i) being influenced in the performance of any act or decision of the foreign official or person selected to be a foreign official in the official capacity of the foreign official or person selected to be a foreign official.

(ii) being induced to do or omit to do any act in violation of the lawful duty of the foreign official or person selected to be a foreign official.

(iii) conferring any improper advantage; or

(iv) using the influence of the foreign official or person selected to be a foreign official with a foreign government or instrumentality thereof to affect or influence any act or decision of that government or instrumentality, in connection with obtaining or retaining business for or with, or directing business to, any person."

Who Is a Foreign Official?

Under 18 U.S. Code § 1352, a foreign official includes:

Any official or employee of a foreign government, department, agency, or instrumentality.
Senior political figures as defined under federal regulations.
Employees or representatives of public international organizations, such as the United Nations.
Any person acting in an official capacity on behalf of such organizations or government entities.

This definition extends to both current officials and individuals selected to become officials, broadening the range of individuals encompassed by this law.

Prohibited Actions Under the Law

18 U.S.C. 1352 makes it unlawful for foreign officials or individuals acting on their behalf to demand or accept bribes in connection with their duties. Specifically, the law prohibits the following:

Corruptly demanding, seeking, receiving, accepting, or agreeing to accept anything of value, either directly or indirectly.
Using methods such as mail or interstate commerce to facilitate the demand or acceptance.
Seeking to gain improper advantages, influence decisions, or manipulate their official authority in exchange for a bribe.

The law also grants the federal government extraterritorial jurisdiction, meaning that individuals can be prosecuted for offenses occurring outside the United States if there is a sufficient connection to U.S. commerce or entities.

Additionally, the law applies not only to completed bribery acts but also to attempted or agreed-upon exchanges, even if the bribe ultimately isn't delivered or accepted.

Key Objectives of FEPA

The Foreign Extortion Prevention Act (FEPA) seeks explicitly to do the following:

Enhance U.S. Anti-Corruption Measures. Target corrupt foreign officials to strengthen the United States' position in the global fight against corruption.
Protect U.S. Businesses. Provide legal mechanisms to defend U.S. businesses from extortionate demands by foreign officials.
Promote Global Transparency. Given the widespread corruption affecting many foreign nations, it is essential to encourage greater transparency and accountability in international business practices.

Elements of the Crime

For prosecutors to secure a conviction under 18 U.S. Code § 1352, they must prove the following specific elements beyond a reasonable doubt:

The accused is a foreign official or someone acting as or for a foreign official.
A corrupt demand or acceptance occurred, meaning the intention was to use their position or influence improperly.
Connection to business dealings where the demand or acceptance served to secure or direct business benefits inappropriately.
Interstate commerce or U.S. mail was used, as these provide the federal jurisdiction required for prosecution under this law.

EXAMPLE: A manager at a U.S.-based tech company is approached by a foreign official visiting the United States as part of a trade delegation. The official suggests that they can influence their government's decision to award a multi-million-dollar contract to the tech company.

In return, the official requests an expensive luxury watch and an all-expense-paid vacation as a personal "gift." Whether or not the gift is actually given or received, the foreign official attempting to strike this deal can be charged with violating 18 U.S.C. 1352.

What are Related Federal Laws?

18 U.S. Code Chapter 63 Part I - Mail fraud and other fraud offenses has several related federal statutes, including the following:

18 U.S.C. 1341 - Frauds and swindles.
18 U.S.C. 1342 - Fictitious name or address.
18 U.S.C. 1343 - Fraud by wire, radio, or television.
18 U.S.C. 1344 - Bank fraud.
18 U.S.C. 1345 - Injunctions against fraud.
18 U.S.C. 1346 - Definition of "scheme or artifice to defraud."
18 U.S.C. 1347 - Health care fraud.
18 U.S.C. 1348 - Securities and commodities fraud.
18 U.S.C. 1349 - Attempt and conspiracy.
18 U.S.C. 1350 - Failure of corporate officers to certify financial reports.
18 U.S.C. 1351 - Fraud in foreign labor contracting.
18 U.S.C. 1352 - Demands by foreign officials for bribes.

Penalties for Violating the Law

The penalties for violating 18 U.S.C. 1352 can be quite severe. If you're convicted of this crime, sentencing may include:

Fines of up to $250,000, or up to three times the value of the bribe involved, whichever is greater, and/or
Incarceration in federal prison for up to 15 years.

Implications for Suspects

If you are under investigation for potential involvement in an international bribery scheme, understanding the implications of the Foreign Exchange Act (FEA) is essential. Here's how this act could impact your situation:

Increased Scrutiny on Foreign Officials: With FEPA, the investigations may shift somewhat from U.S. persons to foreign officials. This could impact the dynamics of federal prosecutions, with a greater emphasis on the demand side of bribery.
Broader Legal Risks: The act could expand the scope of activities considered illegal and increase the number of entities and individuals who might be implicated in corruption cases.
Defensive Measures: Understanding FEPA can help formulate a defense strategy, especially if accusations involve interactions with foreign officials who may also be subject to scrutiny.
Potential for Cooperation with Authorities: Individuals under investigation might find opportunities to cooperate with federal authorities in exchange for leniency, mainly by providing evidence against corrupt foreign officials targeted under FEPA.

What are the Common Defenses?

Allegations of corruption by foreign officials are serious, but a skilled federal criminal defense attorney can thoroughly investigate the situation to develop effective defense strategies that combat the charges. These include, but are not limited to:

Lack of corrupt intent: Demonstrating that any exchange or demand lacked the corrupt intention required for the offense. (For example, showing that a gift was offered strictly as a courtesy and that the official's actions would not have been influenced either way.)
Mistaken identity: Arguing that the accused was not, in fact, the person who made or accepted the corrupt demand.
Jurisdictional issues: Questioning whether the federal government has jurisdiction, particularly if the alleged act occurred entirely outside the U.S. or lacked sufficient ties to interstate commerce.
Entrapment: Claiming that law enforcement improperly induced the accused to commit the offense, which might not have occurred otherwise.

For additional information, contact our federal criminal defense law firm, Eisner Gorin LLP, located in Los Angeles, CA.

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Foreign Extortion