The Foreign Corrupt Practices Act (FCPA) was enacted in 1977 to criminalize the bribing of foreign officials in order to obtain or retain business. In recent years, there has been an increase in bribery investigations and prosecutions by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC). This increase in enforcement coexists with an ambiguity regarding the scope of the FCPA.
The scope of the FCPA hinges on the determination of who is a foreign official. The FCPA defines a foreign official as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, 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.” However, the word “instrumentality” is undefined. Consequently, the DOJ and SEC have taken great liberties in interpreting the FCPA and expanding its scope.
In 2014, the Eleventh Circuit became the first appellate court in the United States to define the ambiguous term in United States v. Esquenazi. Unfortunately, instead of clarifying the issue, the court defined an instrumentality as “an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own.” In addition, the court proffered a two-prong test with nine non-dispositive factors and no guidance on how the factors should be applied.
This note argues that the court’s approach has broadened the scope of the FCPA beyond Congress’ intent and has resulted in a great deal of uncertainty in interpreting the statute. As a result of the lack of guidance, individuals and corporations engaging in international business are operating in a largely uncertain world. This uncertainty inevitably yields a chilling effect on international business.
Amy Lynn Soto,
United States v. Esquenazi: Injecting Clarity or Confusion into the Foreign Corrupt Practices Act,
47 U. MIA Inter-Am. L. Rev.
Available at: https://repository.law.miami.edu/umialr/vol47/iss2/10