Lex Mundi Global Anti-Corruption Compliance Guide |
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USA (Federal Law) |
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| (United States) Firm Morrison & Foerster LLP Updated 01 Feb 2022 | |
| What is the key anti-bribery and corruption legislation in your jurisdiction? | The key U.S. federal legislation addressing foreign bribery and corruption is the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1, et seq. ("FCPA"). The FCPA includes anti-bribery provisions, which prohibit certain companies and individuals from paying bribes to “foreign officials” (non-U.S. public officials) to obtain or retain business, and accounting provisions, which require certain publicly traded companies called “issuers” to maintain accurate books and records and implement and maintain a system of internal accounting controls. The Securities and Exchange Commission (“SEC”) enforces civil violations of the anti-bribery and accounting provisions by issuers, while the U.S. Department of Justice (“DOJ”) enforces all criminal violations of these provisions, as well as civil violations of the anti-bribery provisions by non-issuers. Only the FCPA’s anti-bribery provisions are addressed below. Among federal statutes addressing domestic bribery, 18 U.S.C. § 201, which relates to the bribery of public officials and witnesses, is arguably the most significant. There are numerous other federal bribery statutes that address specific domestic corruption offenses, such as 18 U.S.C. § 666 (concerning bribery in federally-funded programs), the Anti-Kickback Act, 41 U.S.C. § 51 et seq. (dealing with government subcontracting), and various health care fraud statutes. The general mail and wire fraud statutes, 18 U.S.C. §§ 1341 and 1343, are also often used to prosecute domestic corruption. Each U.S. state also has its own laws addressing domestic corruption, which can sometimes be enforced by federal prosecutors through the Travel Act, 18 U.S.C. § 1952, or the money laundering statutes, 18 U.S.C. §§ 1956 and 1957. Below, we focus on the three main federal statutes: the FCPA, 18 U.S.C. § 201, and 18 U.S.C. § 666. |
| Has there been a specific anti-bribery and corruption law enacted in your jurisdiction in the last ten years? | No, the principal federal statutes date from longer than ten years ago. |
| Is a bribe payment to domestic government officials prohibited by the legislation? | Yes, bribery of domestic government officials is prohibited by 18 U.S.C. § 201. The statute also criminalizes “offer[ing]” or “promis[ing]” a bribe as well as “demand[ing]” or “seek[ing]” a bribe, allowing the government to charge a violation even when the bribe is never actually paid. The statute comprises two distinct offenses. The first (codified in 18 U.S.C. § 201(b)) prohibits the giving or accepting of anything of value to or by a public official, if the thing is given “with intent to influence” an official act, or if it is received by the official “in return for being influenced.” The second (codified in 18 U.S.C. § 201(c)) concerns “gratuities,” prohibiting a public official from accepting a thing of value if he or she does so “for or because of” any official act, and prohibits anyone from giving any such thing to a public official for such a reason. 18 U.S.C. § 666 similarly prohibits bribery of domestic government officials who are agents of “an organization, or of a State, local, or Indian tribal government, or any agency thereof” that receives $10,000 or more under a federal program during any one-year period. Similar to § 201, § 666 also criminalizes “offer[ing]” or “agree[ing] to give” a bribe as well as “solicit[ing] or demand[ing]” a bribe. Subsection (a)(2) of the statute prohibits giving, offering or agreeing to give anything of value to such an agent “with intent to influence or reward an agent . . . in connection with any business, transaction, or series of transactions of such organization . . . involving anything of value of $5,000 or more.” |
| Is a bribe payment to foreign government officials prohibited by the legislation? | Yes, the FCPA prohibits paying, offering, authorizing, or promising to pay money or anything of value to a foreign government official, directly or indirectly, in order to secure an improper advantage or to assist in obtaining and retaining business. |
| Is requesting or accepting a bribe prohibited by the legislation? | It depends on the specific piece of legislation. Requesting or accepting a bribe (often referred to as “passive bribery” or “demand-side bribery”) is not prohibited by the FCPA, which targets the payment, offer, authorization, or promise to pay a bribe (often referred to as “active bribery” or “supply-side bribery”). Foreign officials may not be prosecuted under either the FCPA or the general conspiracy statute (18 U.S.C. § 371) for conspiring to violate the FCPA. DOJ, however, has taken the position that foreign officials who accept bribes can be charged using other federal statutes, such as those prohibiting money laundering, in certain cases; to date, DOJ’s position has not been seriously challenged in court. With some slight differences, 18 U.S.C. §§ 201 and 666 both prohibit covered officials from corruptly demanding, seeking, receiving, accepting, or agreeing to receive or accept anything of value in return for being influenced. |
| Who is subject to the legislation? | The FCPA does not apply to the bribe recipient. The FCPA prohibits an “issuer” (i.e., an entity whose shares are publicly traded on a U.S. exchange or which is required to file periodic reports to the SEC), a “domestic concern” (i.e., a citizen, national, or resident of the United States or a corporate entity principally based in or organized under the laws of the United States), any officer, director, employee, or agent of an issuer or a domestic concern, or any stockholder acting on behalf of an issuer or a domestic concern from corruptly paying, offering, authorizing, or promising to pay money or anything of value to a foreign government official in order to secure an improper advantage or to assist in obtaining or retaining business. The FCPA also prohibits a foreign person (natural or legal) from offering, giving, or promising a bribe if any act in furtherance thereof occurs within the territory of the United States. 18 U.S.C. §§ 201 and 666 apply to both the bribe payer and the bribe recipient. Any person may be charged as a bribe payer under either statute. 18 U.S.C. § 201 defines the term “public official” broadly to include any officer or employee acting for or on behalf of the United States, or any department, agency, or branch of government thereof, as well as anyone appointed or nominated to be a public official (18 U.S.C. § 201(a)(1), (2)). 18 U.S.C. § 666 applies to agents of an organization, State, local or Indian tribal government, or any agency thereof, that receives $10,000 or more under a federal program during any one-year period. The term “agent” is broadly defined to include any person authorized to act on behalf of another person or a government and, in the case of an organization or government, includes “a servant or employee, and a partner, director, officer, manager, and representative” (18 U.S.C. § 666(d)(1)). |
| Is there criminal liability for corporate entities who have either paid or accepted a bribe payment? | Yes, both the FCPA and other federal statutes like 18 U.S.C. § 201 and 18 U.S.C. § 666 can be criminally enforced against corporations who offer, pay or promise to give a bribe. |
| What is the penalty for individuals violating the law? | Individuals violating the FCPA are subject to a fine of up to USD 250,000 and imprisonment for up to five years per violation. An 18 U.S.C § 201(b) “bribery” conviction is punishable by up to 15 years in prison, while a § 201(c) "gratuity" conviction is punishable by up to 2 years in prison. An 18 U.S.C § 666 conviction is punishable by up to 10 years in prison. In addition to a term of imprisonment, individuals can be fined under either statute. |
| Assuming corporate entities are liable for violating the legislation, what is the penalty for corporate entities violating the law? | Violating the FCPA’s anti-bribery provision can result in both civil and criminal sanctions, as well as injunctions. The FCPA provides that corporate entities are subject to a criminal fine of up to USD $2 million and a civil penalty of up to USD $16,000 for each violation of the anti-bribery provisions. Corporate entities that violate 18 U.S.C § 201(b) can be fined up to the greater of USD $500,000 or up to three times the monetary equivalent of the bribe. Under a § 201(c) “gratuity” violation, corporate entities are subject to a fine of up to USD $500,000. Corporate entities that violate 18 U.S.C § 666 can be fined up to USD $500,000. Under the Alternative Fines Act, 18 U.S.C. § 3571(d), corporate entities may be subject to significantly higher criminal fines than those provided for under the FCPA or under 18 U.S.C. §§ 201 or 666—up to twice the benefit that the defendant obtained by making the corrupt payment. |
| Assuming corporate entities are liable for violating the legislation, does having a compliance program designed to prevent bribery constitute a defense? | No. While not a legal defense, the existence of a robust compliance program can help a company obtain a more favorable resolution (e.g., a Deferred Prosecution Agreement or Non-Prosecution Agreement or a lower penalty), and can reduce the likelihood that a corporate monitor will be imposed as part of that resolution. Under the FCPA Corporate Enforcement Policy issued by DOJ in 2017 and revised in 2019, implementation of an effective ethics and compliance program is required in order for a company to be eligible to receive full remediation credit, which could lead to either a declination or a 25 to 50 percent reduction off of the applicable fine range if other criteria are satisfied. See Justice Manual, 9-47.120.4 –FCPA Corporate Enforcement Policy. |
| Assuming corporate entities are liable for violating the anticorruption law, is it possible for a corporate entity to reach a deferred prosecution agreement or leniency agreement with the enforcement authorities? | Yes, Deferred Prosecution Agreements and Non-Prosecution Agreements are frequently used for resolving complex corporate enforcement matters in the United States. |
Lex Mundi Global Anti-Corruption Compliance Guide
The key U.S. federal legislation addressing foreign bribery and corruption is the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1, et seq. ("FCPA"). The FCPA includes anti-bribery provisions, which prohibit certain companies and individuals from paying bribes to “foreign officials” (non-U.S. public officials) to obtain or retain business, and accounting provisions, which require certain publicly traded companies called “issuers” to maintain accurate books and records and implement and maintain a system of internal accounting controls. The Securities and Exchange Commission (“SEC”) enforces civil violations of the anti-bribery and accounting provisions by issuers, while the U.S. Department of Justice (“DOJ”) enforces all criminal violations of these provisions, as well as civil violations of the anti-bribery provisions by non-issuers. Only the FCPA’s anti-bribery provisions are addressed below.
Among federal statutes addressing domestic bribery, 18 U.S.C. § 201, which relates to the bribery of public officials and witnesses, is arguably the most significant. There are numerous other federal bribery statutes that address specific domestic corruption offenses, such as 18 U.S.C. § 666 (concerning bribery in federally-funded programs), the Anti-Kickback Act, 41 U.S.C. § 51 et seq. (dealing with government subcontracting), and various health care fraud statutes. The general mail and wire fraud statutes, 18 U.S.C. §§ 1341 and 1343, are also often used to prosecute domestic corruption. Each U.S. state also has its own laws addressing domestic corruption, which can sometimes be enforced by federal prosecutors through the Travel Act, 18 U.S.C. § 1952, or the money laundering statutes, 18 U.S.C. §§ 1956 and 1957. Below, we focus on the three main federal statutes: the FCPA, 18 U.S.C. § 201, and 18 U.S.C. § 666.
No, the principal federal statutes date from longer than ten years ago.
Yes, bribery of domestic government officials is prohibited by 18 U.S.C. § 201. The statute also criminalizes “offer[ing]” or “promis[ing]” a bribe as well as “demand[ing]” or “seek[ing]” a bribe, allowing the government to charge a violation even when the bribe is never actually paid. The statute comprises two distinct offenses. The first (codified in 18 U.S.C. § 201(b)) prohibits the giving or accepting of anything of value to or by a public official, if the thing is given “with intent to influence” an official act, or if it is received by the official “in return for being influenced.” The second (codified in 18 U.S.C. § 201(c)) concerns “gratuities,” prohibiting a public official from accepting a thing of value if he or she does so “for or because of” any official act, and prohibits anyone from giving any such thing to a public official for such a reason.
18 U.S.C. § 666 similarly prohibits bribery of domestic government officials who are agents of “an organization, or of a State, local, or Indian tribal government, or any agency thereof” that receives $10,000 or more under a federal program during any one-year period. Similar to § 201, § 666 also criminalizes “offer[ing]” or “agree[ing] to give” a bribe as well as “solicit[ing] or demand[ing]” a bribe. Subsection (a)(2) of the statute prohibits giving, offering or agreeing to give anything of value to such an agent “with intent to influence or reward an agent . . . in connection with any business, transaction, or series of transactions of such organization . . . involving anything of value of $5,000 or more.”
Yes, the FCPA prohibits paying, offering, authorizing, or promising to pay money or anything of value to a foreign government official, directly or indirectly, in order to secure an improper advantage or to assist in obtaining and retaining business.
It depends on the specific piece of legislation.
Requesting or accepting a bribe (often referred to as “passive bribery” or “demand-side bribery”) is not prohibited by the FCPA, which targets the payment, offer, authorization, or promise to pay a bribe (often referred to as “active bribery” or “supply-side bribery”). Foreign officials may not be prosecuted under either the FCPA or the general conspiracy statute (18 U.S.C. § 371) for conspiring to violate the FCPA. DOJ, however, has taken the position that foreign officials who accept bribes can be charged using other federal statutes, such as those prohibiting money laundering, in certain cases; to date, DOJ’s position has not been seriously challenged in court.
With some slight differences, 18 U.S.C. §§ 201 and 666 both prohibit covered officials from corruptly demanding, seeking, receiving, accepting, or agreeing to receive or accept anything of value in return for being influenced.
The FCPA does not apply to the bribe recipient. The FCPA prohibits an “issuer” (i.e., an entity whose shares are publicly traded on a U.S. exchange or which is required to file periodic reports to the SEC), a “domestic concern” (i.e., a citizen, national, or resident of the United States or a corporate entity principally based in or organized under the laws of the United States), any officer, director, employee, or agent of an issuer or a domestic concern, or any stockholder acting on behalf of an issuer or a domestic concern from corruptly paying, offering, authorizing, or promising to pay money or anything of value to a foreign government official in order to secure an improper advantage or to assist in obtaining or retaining business. The FCPA also prohibits a foreign person (natural or legal) from offering, giving, or promising a bribe if any act in furtherance thereof occurs within the territory of the United States.
18 U.S.C. §§ 201 and 666 apply to both the bribe payer and the bribe recipient. Any person may be charged as a bribe payer under either statute. 18 U.S.C. § 201 defines the term “public official” broadly to include any officer or employee acting for or on behalf of the United States, or any department, agency, or branch of government thereof, as well as anyone appointed or nominated to be a public official (18 U.S.C. § 201(a)(1), (2)). 18 U.S.C. § 666 applies to agents of an organization, State, local or Indian tribal government, or any agency thereof, that receives $10,000 or more under a federal program during any one-year period. The term “agent” is broadly defined to include any person authorized to act on behalf of another person or a government and, in the case of an organization or government, includes “a servant or employee, and a partner, director, officer, manager, and representative” (18 U.S.C. § 666(d)(1)).
Yes, both the FCPA and other federal statutes like 18 U.S.C. § 201 and 18 U.S.C. § 666 can be criminally enforced against corporations who offer, pay or promise to give a bribe.
Individuals violating the FCPA are subject to a fine of up to USD 250,000 and imprisonment for up to five years per violation.
An 18 U.S.C § 201(b) “bribery” conviction is punishable by up to 15 years in prison, while a § 201(c) "gratuity" conviction is punishable by up to 2 years in prison. An 18 U.S.C § 666 conviction is punishable by up to 10 years in prison. In addition to a term of imprisonment, individuals can be fined under either statute.
Violating the FCPA’s anti-bribery provision can result in both civil and criminal sanctions, as well as injunctions. The FCPA provides that corporate entities are subject to a criminal fine of up to USD $2 million and a civil penalty of up to USD $16,000 for each violation of the anti-bribery provisions.
Corporate entities that violate 18 U.S.C § 201(b) can be fined up to the greater of USD $500,000 or up to three times the monetary equivalent of the bribe. Under a § 201(c) “gratuity” violation, corporate entities are subject to a fine of up to USD $500,000. Corporate entities that violate 18 U.S.C § 666 can be fined up to USD $500,000.
Under the Alternative Fines Act, 18 U.S.C. § 3571(d), corporate entities may be subject to significantly higher criminal fines than those provided for under the FCPA or under 18 U.S.C. §§ 201 or 666—up to twice the benefit that the defendant obtained by making the corrupt payment.
No. While not a legal defense, the existence of a robust compliance program can help a company obtain a more favorable resolution (e.g., a Deferred Prosecution Agreement or Non-Prosecution Agreement or a lower penalty), and can reduce the likelihood that a corporate monitor will be imposed as part of that resolution. Under the FCPA Corporate Enforcement Policy issued by DOJ in 2017 and revised in 2019, implementation of an effective ethics and compliance program is required in order for a company to be eligible to receive full remediation credit, which could lead to either a declination or a 25 to 50 percent reduction off of the applicable fine range if other criteria are satisfied. See Justice Manual, 9-47.120.4 –FCPA Corporate Enforcement Policy.
Yes, Deferred Prosecution Agreements and Non-Prosecution Agreements are frequently used for resolving complex corporate enforcement matters in the United States.