Corruption Charges Related to Import-Export Operations
Federal Defense Attorneys for Corruption Charges Related to Import-Export Operations
Companies that import and export goods to and from the United States can face internal and external risks for criminal prosecution under the Foreign Corrupt Practices Act (FCPA) and other statutes. Our federal defense lawyers are available to represent organizations, executives, and personnel facing corruption charges nationwide.
The Foreign Corrupt Practices Act (FCPA) gives federal prosecutors broad authority to target individuals and corporate organizations under a wide range of circumstances. While most litigation under the FCPA involves allegations of corrupt practices related to contracts with foreign governments and state-owned enterprises, companies can also face corruption charges related to their import and export operations. Bribes and other attempts to obtain improper influence directed toward U.S. officials can lead to criminal prosecution as well, and companies and their executives can face prosecution as a result of their relationships with foreign entities even if they do not directly engage in bribery or other corrupt practices.
Prosecution Risks Under the Foreign Corrupt Practices Act (FCPA)
The FCPA applies to all U.S. “persons” (individuals and business entities) as well as certain foreign publicly-traded companies. As summarized by the U.S. Department of Justice (DOJ), the FCPA:
“[P]rohibit[s] the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”
In other words, any conduct involving interstate commerce (including virtually all import and export activities) which also involves a bribe or other attempt to unduly influence a foreign official has the potential to lead to a criminal inquiry under the FCPA, 15 U.S.C. §§ 78dd-1 et seq. If the inquiry leads to charges, those targeted in the government’s prosecution can face penalties including up to $5 million in fines per violation for individuals, up to $25 million in fines per violation for businesses, and up to 20 years of federal imprisonment. In FCPA cases, individuals and businesses can also face forfeitures, disgorgements, injunctions, and suspension or debarment from doing business with government entities.
Companies with import and export operations can be exposed to criminal prosecution under the FCPA on a number of different fronts. Broadly speaking, these exposure risks fall into two categories:
1. Internal Interactions with Foreign Officials
The first set of risks relates to interactions between company personnel and foreign officials. With import and export operations, it is possible for various individuals to interact with foreign officials in differing capacities, and each one of these interactions presents a potential risk for a “corrupt” practice. While this includes intentionally-corrupt practices such as knowingly offering an illegal bribe, it can also include unintentional FCPA violations – particularly in cases where companies do not have comprehensive anti-corruption policies and training programs in place.
This risk is exacerbated by the fact that many foreign officials are not well paid, particularly in the context of the salaries paid to the company personnel with whom they interact. This factor may make some foreign officials particularly susceptible to influence, and may even cause them to request improper payments and other benefits which company personnel do not realize are unlawful under U.S. federal law.
2. Relationships with Third Parties that Interact with Foreign Officials
The second set of risks relates to U.S. domestic companies’ relationships with third parties that interact with foreign officials. This includes:
- Consulting firms
- Customs brokers
- Freight forwarders
- Import and export agents
- Other third parties
In cases where a company relies on one of these third parties to interact with a foreign official on its behalf or in direct or indirect relation to import or export operations, it is possible that these third parties’ practices could trigger an investigation or even directly result in criminal charges. This applies to both domestic and foreign third parties. While companies can use contractual language to mitigate their civil liability for third-party action, these types of contractual protections will generally be insufficient to ward off government prosecution in criminal cases.
Prosecution Risks Under 18 U.S.C. § 201 and 18 U.S.C. § 371
While the Foreign Corrupt Practices Act is the primary federal statute used to prosecute individuals and entities suspected of offering bribes and engaging in other corrupt practices in relation to foreign commerce, importers and exporters can face criminal prosecution under a variety of other federal statutes as well. In relation to interactions with domestic customs and border officials, two of the statutes that present the greatest risks for U.S. companies and individuals are 18 U.S.C. § 201 and 18 U.S.C. § 371.
1. 18 U.S.C. § 201: Bribery of Public Officials and Witnesses
Under 18 U.S.C. § 201, it is a federal criminal offense for any individual or business entity to, “directly or indirectly, corruptly give, offer or promise anything of value to any public official . . . with intent . . . to influence any official act,” or otherwise interfere with the lawful performance of the public official’s duties. In this context, a “public official” includes any, “officer[,] employee or person acting for or on behalf of the United States, or any department, agency or branch of Government.”
18 U.S.C. § 201 is a criminal statute, with potential penalties including statutory fines or three times the value of the improper benefit (whichever is greater), and federal imprisonment for a term of up to 15 years.
2. 18 U.S.C. § 371: Conspiracy to Commit Offense or to Defraud United States
The federal conspiracy statute, 18 U.S.C. § 371, imposes criminal penalties in circumstances where no bribe has been paid and no other form of improper influence has been asserted. It applies in situations where a “successful” corrupt act would result in prosecution under the Foreign Corrupt Practices Act or 18 U.S.C. § 201.
In many respects, 18 U.S.C. § 371 contains some of the broadest provisions of the entire federal criminal code. In order to face prosecution in relation to import or export-related operations, it is not necessary for an individual or organization to be directly involved in alleged corrupt activity, nor it is necessary for the alleged corrupt activity to actually take place. If there is evidence of an agreement (express or implied) and an “overt act” toward the commission of a corrupt practice, this alone is enough to trigger criminal enforcement proceedings. Learn more about federal conspiracy charges under 18 U.S.C. § 371.
Defenses to FCPA and Other Corruption-Related Charges
As with all types of federal charges, there are numerous potential defenses to charges under the FCPA, 18 U.S.C. § 201, and 18 U.S.C. § 371. This includes evidentiary issues (i.e. lack of evidence of intent), constitutional defenses (i.e. an unlawful search or seizure), and various other partial, complete, and affirmative defenses. For example, statutory affirmative defenses under the FCPA include:
- Foreign Law Compliance – It is a defense to criminal culpability under the FCPA that a payment was lawful under the laws or regulations of the recipient official’s country of citizenship.
- Bona Fide Expenditure – It is a defense to criminal culpability under the FCPA that a payment constitutes a “bona fide expenditure” and is directly related to either (i) “the promotion, demonstration, or explanation of products or services;” or, (ii) “the execution or performance of a contract with a foreign government or agency thereof.”
Learn more about the defense strategies we use to protect our clients in federal corruption cases.
About Oberheiden, P.C.
Oberheiden, P.C. is a federal criminal defense law firm with a national presence and headquarters in Dallas, Texas. The firm was founded by Dr. Nick Oberheiden, a federal defense lawyer who has more than a decade of experience in private practice and who received his training and education at top institutions in the United States and abroad. The firm’s team of defense attorneys also includes several former federal prosecutors, many of whom worked for the DOJ for decades before entering private practice.
The firm provides strategic legal representation for individual and corporate clients facing federal investigations and criminal charges under the Foreign Corrupt Practices Act and other federal statutes. By taking an aggressive and proactive approach, the firm’s attorneys have been successful in resolving many clients’ cases without charges being filed or between the stages of indictment and trial. By taking a team approach, the firm offers all clients the benefit of centuries of combined legal experience, and clients have full access to their defense team 24/7 through the final resolution of their case.
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To discuss your federal corruption case with a member of Oberheiden, P.C.’s federal defense team, please call (214) 692-2171 or contact us online. We will schedule your initial consultation as soon as possible.