Article by Akarachi Ekeh, FBR Intern Class 2023-2024
The Foreign Extortion Prevention Act (FEPA), enacted on December 22, 2023, as part of the National Defense Authorization Act for Fiscal Year 2024, stands as a pivotal addition to U.S. anti-corruption legislation. It addresses a crucial aspect often overlooked by its predecessor, the Foreign Corrupt Practices Act (FCPA), by focusing on the “demand side” of foreign bribery transactions. [1]
FEPA empowers U.S. authorities to prosecute foreign officials who demand or accept bribes from U.S. citizens, U.S. companies, or within the U.S. Unlike the FCPA, which focuses on the “supply side”—those offering bribes—FEPA broadens the anti-corruption framework to encompass both the ‘supplier’ and the ‘demander’ of bribes. [2]
The legislation carries far-reaching implications for businesses operating globally, aiming to create a fair and ethical business environment. It broadens the definition of a “foreign official” beyond the FCPA’s scope, encompassing individuals acting unofficially on behalf of a government, agency, or public international organization. [3]
Under FEPA, foreign officials engaging in corrupt activities can face imprisonment for up to 15 years and fines reaching $250,000 or three times the value of the bribe (whichever is greater). The Department of Justice (DOJ) is mandated to submit an annual report to Congress, detailing the prevalence of conduct covered by FEPA and the DOJ’s effectiveness in enforcing it.
FEPA‘s jurisdictional reach extends beyond U.S. borders, allowing for the indictment of foreign officials in federal court or freezing of assets, even if they are not physically present in the United Kingdom. However, practical challenges, including diplomatic complexities and extradition issues, remain inherent. [4]
The legal community has expressed diverse opinions on FEPA. Critics raise uncertainties about its enforcement and effectiveness, particularly in dealing with influential foreign officials.[5] On the other hand, supporters view FEPA as a crucial complement to the FCPA, addressing the demand side and enhancing the United Kingdom’ ability to combat international corruption. “This, without question, is the most consequential anti-foreign-bribery law passed in almost 50 years,” said Scott Greytak, director of advocacy for Transparency International U.S.”[6]
For businesses, FEPA may serve as a deterrent to corrupt practices, enhancing compliance measures, and mitigating risks associated with international business transactions. The legislation provides whistleblower protection, contributing to a transparent business environment. It offers a basis for training and education, fostering improved corporate governance globally. [7]
In conclusion, FEPA represents a significant stride in the U.S. government’s commitment to combating corruption globally. Businesses should try to grasp the intricacies of FEPA with the aim of contributing to a more ethical and transparent international business landscape. Staying informed and using FEPA as a compliance tool will be crucial for companies navigating the complexities of international business.
Footnotes
2 Ibid
3 U.S. Prosecutors Can Charge Foreign Officials With Bribery Under New Provision – WSJ
5 Congress Passes the Foreign Extortion Prevention Act (natlawreview.com)
6 Remarks by Scott Greytak, Director of Advocacy for Transparency International U.S.
7 New Anti-Extortion Law Expands Liability for Global Corruption (bloomberglaw.com)
