[1]There is a lot of talk in Latin America these days about the FCPA. People throughout the region see investigation after investigation and settlement after settlement including companies and individuals from the region. They are asking more questions about the law, such as — How can Latin Americans be subject to a U.S. law? Here are five ways that U.S. authorities can assert jurisdiction over non-U.S. companies and individuals under the FCPA’s anti-bribery provisions:
- Issuers (15 U.S.C. Sec. 78dd-1). The FCPA applies to Latin American companies that have a class of securities listed on a national securities exchange in the United States. They are known as “issuers”. They are prohibited from making corrupt payments to non-U.S. officials, no matter where the payments occur in the world. This provision also reaches the officers, directors, employees, and agents of issuers, even if they are Latin American. In addition to the FCPA’s anti-bribery provisions, issuers are subject to the FCPA’s accounting provisions, described here [2], here [3], and here [4].
- Domestic Concerns (15 U.S.C. Sec. 78dd-2). Any individual who is a citizen or national of the United States, including any corporation with its principal place of business in the United States, is known as a “domestic concern” and is subject to the FCPA no matter where it is operating in the world. This means that Latin Americans with dual citizenship, or companies operating in the region with headquarters in the United States, can be subject under this provision.
- Territorial Jurisdiction (15 U.S.C. Sec. 78dd-3). The FCPA prohibits any individual or company not covered by Sections 78dd-1 or 78dd-2, including those from Latin America, from performing any act in furtherance of bribery “while in the territory of the United States.” This covers companies and officers, directors, employees, agents, and stockholders acting on behalf of their companies. The type of activity that has established jurisdiction under “dd-3” includes conducting meetings in the United States to plan bribery, using U.S. bank accounts for bribery schemes, or sending e-mails from the United States authorizing bribe payments. In some circumstances, authorities have stretched this provision to hold defendants liable for causing an act to occur in the United States, such as sending mail to the United States or making phone calls into the United States that are connected to bribery. In recent years, courts have been skeptical of this more expansive application, as described by the FCPA Professor here [5].
- Agency. Since the language of Sections 78dd-1, 78dd-2, and 78dd-3 includes actions by “agents” of covered entities, in some instances authorities have established jurisdiction over non-U.S. entities controlled by covered entities, such as non-U.S. subsidiaries, for their improper payments. One federal court rejected this interpretation as inconsistent with the FCPA’s legislative history, though that decision is not binding law in other federal jurisdictions.
- Conspiracy and Aiding and Abetting. Perhaps the most likely way that a Latin American company not publicly listed in the United States, and its personnel, can be subject to the FCPA is indirectly through federal conspiracy and aiding and abetting statutes. Under these theories, individuals and companies that assist in the commission of an FCPA violation are considered “as guilty as if they had directly committed the offense themselves,” as described in the DOJ and SEC’s FCPA Guidance [6]. For example, when two or more people conspire to commit an offense against the United States, and at least one is an issuer, domestic concern or commits at least one reasonably overt act within the United States, U.S. authorities can assert jurisdiction over all conspirators. Similarly, any individual or company that aids and abets a violation can be subject to jurisdiction without taking any act in furtherance of the violation within the United States. To assert aiding and abetting, the government must prove that an independent FCPA violation was committed by the principal actor.
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