Posted by Brianna McCoy.
In the very end of August of this year, 2018, a court ruling involving the FCPA could potentially limit the government’s power to go after foreign companies and individuals in bribery cases. This type of court situation is dealt within the U.S. appeals court. The appeals court supported a ruling that tightens and limits the jurisdiction under which prosecutors can bring foreign bribery charges. Attorneys involved in this ruling recognize that “affirming a lower-court ruling that dismissed conspiracy charges against a foreign national accused of facilitating a bribery scheme could have a significant effect on future enforcement,” (WSJ Samuel Rubenfeld). This statement demonstrates the limits of the Foreign Corrupt Practices Act (FCPA). The FCPA was passed in 1977, with the primary purpose to prohibit the payment of bribes, in any form, to foreign officials in order to secure or retain business. It is interesting how this act is for business purposes by American individuals, companies, and issuers of American stock, yet if a foreigner is involved in a corruption scheme while in the U.S. they are also subject to the law.
However, now that there is a narrower view of this statute, the Justice Department is going to see a drawback on their ability to go after foreign companies and foreign individuals. You may wonder where this idea is coming from… This appellate decision is focused “on an individual’s challenge in the foreign-bribery case involving Alstom SA. The French transportation manufacturer agreed in December 2014 to pay $772 million to settle the case, which involved allegations in several countries,” (WSJ Samuel Rubenfeld). Several other people have been charged, one being Lawrence Hoskins, a U.K. national. Hoskins was probed because while he was working for a French unit of Alston, it was alleged that he approved payments to third-party consultants related to a bribery scheme in Indonesia. Luckily for Hoskins, he wasn’t subject to the FCPA because he “didn’t work directly for the U.S.-based unit of Alstom and didn’t participate in the bribery conspiracy while physically in the U.S.” However, the appellate court revised this lower court ruling because prosecutors can argue that Hoskins colluded with the Alstom’s employees while they conducted bribery acts in the U.S., even though Hoskins wasn’t physically in the U.S.
Now, the Justice Department is “reviewing the ruling and considering next steps.” By doing this, questions may come up about whether the U.S. has jurisdiction in an FCPA case earlier in an investigation. In the past, it has been uncommon for an individual to challenge the U.S. government’s affirmation in jurisdiction in an FCPA case, but the appellate decision could provoke more attempts to do so. Because in the past these FCPA settlements have relied on conspiracy theories, now prosecutors will turn toward developing evidence regarding conduct in the U.S. by foreign nationals to bring its FCPA cases. In addition to this, the government may continue its tendency of using money-laundering statue where necessary.
Brianna is a management major at the Stillman School of Business, Seton Hall University, Class of 2021.