fcpa-resource-guide

or of a public international organization, or any person
acting in an official capacity for or on behalf of
any such government or department, agency, or instrumentality,
or for or on behalf of any such public
international organization. 112
As this language makes clear, the FCPA broadly
applies to corrupt payments to “any” officer or employee
of a foreign government and to those acting on the foreign
government’s behalf. 113 The FCPA thus covers corrupt
payments to low-ranking employees and high-level
officials alike. 114
The FCPA prohibits payments to foreign officials, not
to foreign governments. 115 That said, companies contemplating
contributions or donations to foreign governments
should take steps to ensure that no monies are used for corrupt
purposes, such as the personal benefit of individual
foreign officials.
Department, Agency, or Instrumentality of a
Foreign Government
Foreign officials under the FCPA include officers
or employees of a department, agency, or instrumentality
of a foreign government. When a foreign government
is organized in a fashion similar to the U.S. system, what
constitutes a government department or agency is typically
clear (e.g., a ministry of energy, national security agency, or
transportation authority). 116 However, governments can be
organized in very different ways. 117 Many operate through
state-owned and state-controlled entities, particularly in
such areas as aerospace and defense manufacturing, banking
and finance, healthcare and life sciences, energy and
extractive industries, telecommunications, and transportation.
118 By including officers or employees of agencies and
instrumentalities within the definition of “foreign official,”
the FCPA accounts for this variability.
The term “instrumentality” is broad and can include
state-owned or state-controlled entities. Whether a particular
entity constitutes an “instrumentality” under the FCPA
requires a fact-specific analysis of an entity’s ownership,
control, status, and function. 119 A number of courts have
approved final jury instructions providing a non-exclusive
chapter 2
The FCPA:
Anti-Bribery Provisions
list of factors to be considered:
• the foreign state’s extent of ownership of the entity;
• the foreign state’s degree of control over the entity
(including whether key officers and directors of
the entity are, or are appointed by, government
officials);
• the foreign state’s characterization of the entity and
its employees;
• the circumstances surrounding the entity’s creation;
• the purpose of the entity’s activities;
• the entity’s obligations and privileges under the
foreign state’s law;
• the exclusive or controlling power vested in the
entity to administer its designated functions;
• the level of financial support by the foreign
state (including subsidies, special tax treatment,
government-mandated fees, and loans);
• the entity’s provision of services to the jurisdiction’s
residents;
• whether the governmental end or purpose sought
to be achieved is expressed in the policies of the
foreign government; and
• the general perception that the entity is performing
official or governmental functions. 120
Companies should consider these factors when evaluating
the risk of FCPA violations and designing compliance
programs.
DOJ and SEC have pursued cases involving instrumentalities
since the time of the FCPA’s enactment and
have long used an analysis of ownership, control, status,
and function to determine whether a particular entity is
an agency or instrumentality of a foreign government.
For example, the second-ever FCPA case charged by DOJ
involved a California company that paid bribes through a
Mexican corporation to two executives of a state-owned
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