Page 30 - U.S. FOREIGN CORRUPT PRACTICES ACT

A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.

Bank, the International Monetary Fund, the World $90 million in commissions. In fact, the sales agent
Intellectual Property Organization, the World used portions of the commission payments to bribe
Trade Organization, the OECD, the Organization high-level Libyan government officials in order
of American States, and numerous others. A to secure the placement of approximately $3.66
comprehensive list of organizations designated as billion in assets with the financial institutions. As

“public international organizations” is contained a consequence, the French global financial services
in 22 U.S.C. § 288 and can also be found on the institution and the U.S. investment management
U.S. Government Publishing Office website at firm paid a combined approximately $600 million
https://www.govinfo.gov/content/pkg/USCODE- in penalties; the French financial institution entered
2018-title22/html/USCODE-2018-title22-chap7- into a deferred prosecution agreement with DOJ,
subchapXVIII-sec288.htm. DOJ has brought charges and a wholly owned subsidiary pleaded guilty; while

against persons who pay bribes to such employees the U.S. financial institution entered into a non-
and representatives of such “public international prosecution agreement with DOJ, and disgorged
organizations.” 133 $34.5 million as part of its resolution with SEC. 137
In another case, between 1996 and 2012, a
How Are Payments to Third Parties publicly traded energy company in the Netherlands

Treated? engaged in the regular practice of retaining third-
The FCPA expressly prohibits corrupt payments party sales agents to pay bribes to foreign officials
made through third parties or intermediaries. 134 in at least five countries: Brazil, Angola, Equatorial

Specifically, it covers payments made to “any Guinea, Kazakhstan, and Iraq. Over the course of the
person, while knowing that all or a portion of such conspiracy, the company paid at least $180 million
money or thing of value will be offered, given, or in “commission” payments to its agents, earning
promised, directly or indirectly,” 135 to a foreign profits of at least $2.8 billion. The company and
official. Many companies doing business in a foreign its U.S. subsidiary admitted to violating the FCPA,
country retain a local individual or company to help as did its former CEO and a sales and marketing

them conduct business. Although these foreign executive. 138
agents may provide entirely legitimate advice Because Congress anticipated the use of third-
regarding local customs and procedures and may party agents in bribery schemes—for example, to
help facilitate business transactions, companies avoid actual knowledge of a bribe—it defined the
should be aware of the risks involved in engaging term “knowing” in a way that prevents individuals

third-party agents or intermediaries. The fact that a and businesses from avoiding liability by putting
bribe is paid by a third party does not eliminate the “any person” between themselves and the foreign
potential for criminal or civil FCPA liability. 136 officials. 139 Under the FCPA, a person’s state of mind
For example, a French global financial is “knowing” with respect to conduct, a circumstance,
services institution and a U.S.-based investment or a result if the person:
management firm retained a third-party sales agent
• is aware that [he] is engaging in such conduct,
to win business in Libya. The financial institutions that such circumstance exists, or that such
repeatedly engaged the third-party sales agent to result is substantially certain to occur; or
win business with Libyan state-owned financial • has a firm belief that such circumstance exists
institutions, ultimately paying the sales agent over or that such result is substantially certain to
occur. 140
22