For years, the U.S.’s Foreign Corrupt Practices Act (FCPA) stood as something of a gold standard among international anti-bribery legislation. However, the FCPA, first written into law in 1977, suffered from one major flaw: It only criminalized the act of Americans giving bribes, not the act of demanding bribes from American individuals and companies in the first place.
But a new bill introduced last week aims to fix this loophole and set a new bar for how far anti-bribery legislation can go.
Co-sponsored by a bipartisan group of legislators, the Foreign Extortion Prevention Act (FEPA) will criminalize any and all extortion by foreign officials. The bill will effectively act as a complement to the FCPA, allowing the U.S. to criminalize the entire process of bribery (involving Americans) abroad.
The current text of the bill proposes potential fines and jail-time for those found guilty of demanding bribes from American companies and individuals abroad.
“Currently, a business being extorted for a bribe can only say ‘I can’t pay you a bribe because it is illegal and I might get arrested,'” Rep. John Curtis (R-UT), one of the bill’s co-sponsors, said in a statement. “This long-overdue bill would enable them to add, ‘and so will you.'”
“Americans who pay bribes overseas can be prosecuted. With this bill, our prosecutors will be able to go after the foreign officials who demand those bribes,” added Tom Malinowski (D-NJ), another co-sponsor. “We’re giving the Justice Department a powerful new tool to fight the kleptocracy that impoverishes people and empowers dictators around the world.”
"Americans who pay bribes overseas can be prosecuted—with this bill, our prosecutors will be able to go after the foreign officials who demand those bribes.” @Malinowski
— Szabolcs Panyi (@panyiszabolcs) August 3, 2019
One of the biggest questions surrounding the bill, which has been referred to the House Judiciary Committee, involves jurisdictional concerns. Foreign officials found guilty of breaching FEPA may never see any retribution, especially if they remain abroad following any potential conviction.
However, for those pushing the bill, imprisoning people who demand bribes of Americans isn’t the sole potential outcome one FEPA becomes law. “Even if a kleptocrat cannot be immediately extradited, a U.S. indictment serves as a play-by-play of the crime committed that can be used to support additional measures — such as sanctions — and can force transnational criminals to think twice before traveling abroad to spend their ill-gotten gains,” said Rep. Richard Hudson (R-NC), one of the co-sponsors.
FEPA would also bring the U.S. in line with anti-bribery legislation elsewhere, following a model already set in countries including Switzerland, France, and the U.K.
“Amending U.S. criminal law to cover bribe-receiving would bring the United States closer to international best practices, and would further the U.S. government’s efforts to stamp out transnational corruption,” wrote Tom Firestone, a partner at Baker McKenzie and noted expert on the FCPA. “But it would also protect honest businesses, which are increasingly faced with illegal demands from foreign officials in corrupt regimes and unscrupulous competition from companies, including state-owned enterprises in such countries.”
If the FCPA’s precedent is anything to go by, the FEPA could quickly become one of the foremost tools in cracking down on bribery abroad. While FCPA enforcement remained negligible in its first few decades, it’s since become one of the go-to tools for American officials looking to unwind kleptocratic networks abroad, as well as holding to account those American individuals and companies fanning corrupt networks. Previous FCPA enforcement actions have even reached as high as presidential levels abroad, with one notable — and notorious — case involving the former Kazakhstani president, Nursultan Nazarbayev, who received tens of millions of dollars on behalf of American energy companies.
According to the University of Cambridge’s Jason Sharman, it was the FCPA’s inception that jump-started the U.S.’s “unusual commitment to the cause of fighting international corruption” — a pattern that the FEPA seeks to continue.
President Donald Trump, for his part, referred to the FCPA before his presidency as a “horrible law.” Questions remain about the Trump Organization’s potential breach of FCPA violations in the past, most especially surrounding the Trump Organization’s now-defunct in Azerbaijan. Congress currently shows surprisingly little appetite to pursue the questions surrounding that project — but the passage of FEPA may present renewed interest.
The FEPA bill builds on a sudden burst of anti-kleptocracy momentum in Congress over the past few months. Other proposed bills include things like the CROOK Act, which would direct 5 percent of all FCPA-related fines to a broader anti-corruption fund, as well as another bill that would permit the Secretary of State to publicize all foreigners barred from the U.S. on account of corruption allegations. These bills, as well as the FEPA legislation, all come with the backing of the Helsinki Commission, an independent U.S. federal agency focusing on human rights and pro-democracy policies.