Does the FCPA Apply to Foreign Companies?

  • The Foreign Corrupt Practices Act (“FCPA”) prohibits individuals and companies from bribing foreign officials to obtain or retain business and requires companies to maintain adequate books, records, and internal controls.
  • The applicability of the Act depends on the individuals and entities that it regulates. Issuers and domestic concerns are subject to the FCPA even if they bribe a foreign official outside the United States.
  • Foreign companies and foreign nationals are also subject to the FCPA in certain circumstances such as where that foreign individual or foreign company commits an act as an agent of a U.S. company or U.S. national.
  • Other circumstances that will subject foreign companies and foreign nationals to the FCPA include the use of any means or instrumentality of U.S. interstate commerce in furtherance of committing the FCPA violation or engaging in an act in furtherance of a corrupt payment while physically present in the United States.
  • Consider hiring experienced FCPA lawyers to assist you in these complexities and whether they apply to your company.

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Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Experienced FCPA Defense Team

If you have been charged with a violation of the FCPA or are unsure if the FCPA applies to a certain company that you are affiliated with, now is the time to hire a defense attorney to resolve these uncertainties.

Federal authorities are constantly seeking to investigate individuals and companies suspected of violating the anti-bribery as well as the accounting provisions of the FCPA.

In 2010, the SEC created a specialized unit to work on complex areas of securities law and to amplify its enforcement tools under the FCPA.

Further, the DOJ has long asserted that foreign nationals and foreign companies can be prosecuted under accomplice liability and conspiracy for FCPA violations in situations where they cannot be charged under the FCPA because their conduct occurred outside the United States.

It is critical that you are represented by an experienced defense attorney with extensive knowledge of the FCPA, including which individuals and entities it regulates—which can be a complex topic.

At Oberheiden, P.C., our attorneys include former FBI agents, former U.S. attorneys, and former prosecutors.

We have the qualifications and diversity needed to prepare a personalized defense strategy in your favor and offer well-reasoned and rationalized advice.

Do not wait to get in touch with a qualified defense attorney. Put Oberheiden, P.C. on your side to fight for your freedom.

Brief Overview of the FCPA

The Foreign Corrupt Practices Act (“FCPA”) prohibits individuals and companies from bribing foreign officials to obtain or retain business. It also requires companies to maintain adequate books, records, and internal controls in their accounting practices.

The applicability of the FCPA depends in large part on the individuals and entities that it regulates. The Act was amended in 1998 to apply to foreign nationals and foreign companies acting within the United States to bribe foreign officials.

However, the FCPA does not apply to conduct committed by foreign nationals who never acted within the United States or who never acted as agents of U.S. companies or U.S. nationals while abroad.

In United States v. Hoskins (902 F.3d 69 (2d Cir. 2018)), the Second Circuit narrowed the reach of the FCPA by holding that non-resident foreign nationals cannot be charged with conspiracy to violate the FCPA unless they are an agent of an issuer or domestic concern or unless they committed an act while physically present in the United States.

Therefore, non-U.S. nationals and non-U.S. companies can still be prosecuted under the FCPA in limited circumstances, which we highlight below.

The Reach of the FCPA: Who is Covered?

The FCPA applies to individuals and companies that have formal connections to the United States and individuals and companies who take actions in furtherance of a FCPA violation while in the United States.

“Issuers” and “domestic concerns” are subject to the FCPA even if they act outside the territory of the United States. They can therefore be subject to penalties under the Act for bribes paid to foreign officials based on conduct that took place abroad.

Importantly, foreign companies and foreign nationals can also be subject to the FCPA for bribing foreign officials in certain circumstances.

Below we provide a detailed list and explanation of individuals and entities that the FCPA applies to:

  • U.S. Issuers: Companies listed on any registered national securities exchange in the United States (including ADRs) or companies that trade on the over-the-counter markets and file annual reports with the SEC are subject to the FCPA. This includes foreign issuers that sell ADRs in the United States.
  • Domestic concerns and U.S. persons: This category includes any company incorporated in the United States; any foreign or domestic company that has its principal place of business in the United States; or any individual who is a citizen, national, or resident of the United States.
  • Use of U.S. instrumentality: Foreign companies and foreign nationals will be subject to the provisions of the FCPA if they use any means or instrumentality of U.S. interstate commerce in furtherance of committing the FCPA violation. An “instrumentality” includes a telephone call, sending an email, text, fax, or a wire transfer from, to, or through the United States.
  • Act in furtherance of making a corrupt payment and “physical presence” in the United States: Foreign companies and foreign nationals will be subject to the provisions of the FCPA if they, either directly or indirectly, engage in any act in furtherance of a corrupt payment while physically present in the United States. For instance, the physical presence in the United States of an agent of a foreign parent company is sufficient for the FCPA to apply to that foreign parent corporation.
  • Agents: The FCPA applies to a foreign company or foreign national whenever they commit an act as an agent of a U.S. company or U.S. national.

The DOJ, SEC, and other federal regulatory agencies continue to develop ways to hold companies—including foreign companies—accountable for FCPA violations including by justifying such charges on aiding and abetting allegations as well as the agency theory of the parent-subsidiary relationship.

If you are concerned about FCPA charges against your company or need advice regarding the Act’s applicability to covered individuals and companies, contact our FCPA defense team as soon as possible.

Need Advice Regarding the FCPA’s Applicability to Foreign Companies?

Being investigated by federal agencies in connection with the FCPA can be a worrisome time. It can be especially troublesome is situations where it is unclear whether the Act applies to your company in the first place.

Federal agencies such as the DOJ and SEC have increasingly formulated theories to include foreign companies within the reach of the FCPA. This creates much uncertainty and could potentially subject your company within the purview of the FCPA.

If you are unsure of the Act’s applicability to your company, contact our team of FCPA attorneys. At Oberheiden, P.C., we have the experience and knowledge needed to prepare your defense, advise you on the FCPA’s geographic reach, counsel you on regulatory changes, and fight any charges made against you and your company.

If you need any assistance regarding allegations of FCPA violations—whether of the anti-bribery or accounting provisions — call us at 888-680-1745 or contact our office for a free consultation.

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