The intention of the US government to introduce liability for passive bribery was enshrined in the US Strategy on Countering Corruption adopted in 2021.

The Foreign Extortion Prevention Act (FEPA) that is a part of the National Defense Authorization Act for Fiscal Year 2024 of 22 December 2023 amends 18 U.S.C., Chapter 11 – Bribery, graft, and conflicts of interest by criminalising passive bribery of foreign public officials thereby supplementing liability of natural and legal persons for active bribery of foreign public officials provided for by the US Foreign Corrupt Practices Act (FCPA).

Under FEPA, foreign public officials are prohibited from demanding, seeking, receiving and/or agreeing to receive either directly or indirectly anything of value personally and/or for any other person or non-governmental entity in return for:

• Being influenced in the performance of an official act;
• Being induced to do or omit to do any act in violation of an official duty;
• Conferring any improper advantage, in connection with obtaining or retaining business for or with, or directing business to, any person.

The foreign public officials subject to FEPA are:

• Any official or employee of a foreign government or any department, agency, or instrumentality thereof;
• Any senior foreign political figure as defined in 31 C.F.R. §1010.605 or any legal act adopted in its furtherance;
• Any official or employee of a public international organization*;
• Any person acting, whether in an official or unofficial capacity, for or on behalf of:

1. A government, department, agency or instrumentality thereof; or
2. A public international organization.

It should be highlighted that this definition of the persons considered as foreign public officials is broader than that used by the FCPA and includes, in particular, the persons who act in an unofficial capacity on behalf of a department (organisation).

The FEPA provisions are applicable in the event that the offence is committed by a foreign public official in the US territory with the counterpart being:

• An issuer, i.e. a US stock company or a company conducting over-the-counter trade in the United States and obliged to report on its activities to the Securities and Exchange Commission (SEC);
• A US domestic concern. i.e. a company that is registered under the US law and/or conducts its main activity in the US territory, or a natural person who is a US citizen or resident.

The act clarifies that its provisions are not applicable to the instances of the FCPA violations as regards either a direct liability or conspiracy, complicity, or otherwise. Experts believe that this clarification was made for the purpose to deprive the suspects of the possibility to appeal to the affirmative defense provided for by the FCPA**.

Like the FCPA, FEPA has extraterritorial application. However, unlike the FCPA, it is relevant only to the criminal investigations of the US Department of Justice (DOJ) and does not entitle the SEC to carry out parallel civil proceedings.

Foreign public officials convicted of violating FEPA provisions can be subject to the following sanctions:

• Up to 15 years’ imprisonment;
• Fines up to $250,000 and/or three times the value of the bribe.

In order to monitor the effectiveness of FEPA enforcement, the US Attorney General together with the US Secretary of State are obliged to annually report to the Committee on the Judiciary of the Senate and to the Committee on Foreign Relations of the Senate or to the Committee on the Judiciary of the House of Representatives and to the Committee on Foreign Affairs of the House of Representatives, as well as to publish on the DOJ website a report on:

• Demands by foreign officials for bribes, and the efforts of foreign governments to prosecute such cases;
• Efforts to protect entities domiciled or incorporated in the United States from foreign bribery;
• FEPA enforcement practice;
• Resources or action needed to ensure adequate FEPA enforcement.

*For the purposes of the act the notion of “public international organisation” covers:

• An organisation specifically defined by a Presidential Order in line with Section 1 of the International Organizations Immunities Act;
• Any other international organisation defined by a Presidential Order specifically for the purposes of the act and acting at the moment of the publication of the Order in the Federal Register.

**The FCPA provides for a number of cases where the accused can count on the affirmative defense, in particular:

• Facilitating payments;
• Reasonable and bona fide expenses; or
• Payments to officials that are explicitly allowed by the law of the country in the departments or organisations of which they hold positions.