[1]Under the FCPA, the meaning of “public official” is important to determining whether or not a specific payment is prohibited. This is because the anti-bribery provisions of the FCPA only apply to public bribery, that is, bribes paid to public officials of non-U.S. countries. The analysis is often linked to a determination of whether an entity for which an individual works is state owned or controlled. If the entity is a state “instrumentality,” then its officials will be considered “foreign public officials,” and certain types of payments to them will be prohibited under the FCPA.
The meaning of the term “instrumentality” under the FCPA has been hotly contested in the United States of late. In United States v. Esquenazi, the 11th Circuit is now considering a challenge to the District Court’s jury instruction on the term. This will be the first time that a U.S. federal circuit court will clarify the meaning of “foreign official” under the FCPA. To date, lower courts have provided a list of various factors that are relevant to the determination, including the state’s level of ownership and degree of control, whether the state appoints the entity’s officers and directors, the purpose of the entity’s activities, and the circumstances surrounding the entity’s creation.
(For a more thorough list of factors, see page 20 of the FCPA Guidance [2]. FCPAméricas has discussed state-owned enterprises previously here [3] and here [4].)
Another key factor in the analysis is how the state itself characterizes the entity. With this in mind, FCPAméricas offers an overview of the various ways in which key jurisdictions in Latin America define “public official”:
ARGENTINA: The Argentina Criminal Code (Art. 77) defines the terms “public official” and “public employee” as any person temporarily or permanently involved in the exercise of public functions, whether by popular election or by appointment of a competent authority. Argentine courts have interpreted this provision to include officials or employees of state-owned or controlled companies, so long as the individuals are performing “public functions.”
BRAZIL: The Brazilian Penal Code (Art. 327) defines a domestic public official to include anyone who executes a public office, employment or function, even on a temporary basis or without pay. This includes any person who performs an office, employment, or function in a government-owned corporation or state-owned enterprise of who works for a legal entity created by government to undertake commercial or business activities on behalf of the government.
CHILE: The Chilean Penal Code (Art. 260) defines a public employee as any official performing a public function or office, either in the central administration or in semi-fiscal, municipal, or autonomous institutions, or in agencies created by the state or dependent on the state, even if they are not appointed by the President of the Republic nor receive remuneration from the state. This definition also applies to those who are popularly elected.
COLOMBIA: The Colombian Criminal Code (Art. 20) provides that employees and workers of the State and all members of public corporations are public servants. In addition, members of the security forces, private citizens who perform public functions on a permanent or temporary basis, officials and workers of the Banco de la República, members of the National Citizens Commission against Corruption, and members of Congress, departmental assemblies, and direct and municipal councils are also considered public servants.
ECUADOR: The Ecuador National Constitution defines public officials as all natural persons who are employed by any level of the national, regional, or local government, or who carry out a public function. This definition includes employees of state-owned enterprises. Moreover, the Criminal Code of Ecuador defines government entities as all central government premises, electoral entities, regulatory entities, and private entities that are at least 50% funded or controlled by the state.
MEXICO: The Mexican Constitution refers to the following persons as public officials: elected officials and members of the judiciary; officers, employees and any person who fulfills an employment position or commission in the federal congress or Mexico City; and public officials of autonomous agencies. The country’s Federal Criminal Code (Art. 212) defines the term “public servant” as a person employed by, or holding an office or commission in, the federal government, majority federal state-owned enterprises or similar entities, public trusts, the federal congress and the federal judiciary. The term also covers persons handling federal funds. State anti-bribery laws complement this code by covering employees and office holders of state and local governments.
PERU: The Peruvian Criminal Code (Art. 425) defines public servant as (1) anyone in a civil service career, (2) anyone in a policy-making position or position of trust, even if elected by popular vote, (3) anyone who has employment or contractual ties of any kind with the government and performs government functions (which is thought to include employees of state-owned entities), (4) receivers and depositaries of funds managed by the government, (5) members of the armed forces and police, and (6) any other persons mentioned in the Constitution or the law.
VENEZUELA: The Venezuelan Anti-Corruption Law (Art. 3) defines a public official as (1) those invested with public functions, be they permanent or temporary, compensated or free, arising from election, appointment, or contract extended by the competent authority at the service of the Republic, its states, federal territories, and dependencies, districts, metropolitan districts, or municipalities; autonomous national, state, district, and municipal bodies; public universities, the Central Bank of Venezuela, or any other of the organs and entities that exercise public power; (2) directors and administrators of civil and commercial companies, foundations, civil associations, and other institutions established with public resources or with a certain amount of government involvement; and (3) directors appointed to represent the government in institutions.
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