Bribery Law: Foreign Nationals And Their Legal Standing

Bribery is a pervasive issue that undermines the integrity of governments, businesses, and societies worldwide. It involves the offering, giving, soliciting, or receiving of any item of value to influence the actions of an official or individual with a public or legal duty. While bribery exists in various forms and contexts, one prevalent form is foreign bribery, where companies or individuals offer bribes to foreign officials to gain advantages in international business transactions. This practice has far-reaching consequences, distorting decision-making, diverting public resources, and undermining economic growth.

The discussion on whether bribery laws apply to foreigners centres around the extraterritorial reach of anti-bribery legislation. Several countries have implemented laws specifically targeting foreign bribery, recognising its detrimental impact on global trade and governance. These laws often carry significant penalties for individuals and corporations found guilty of bribing foreign officials.

In this context, the applicability of bribery laws to foreigners becomes crucial, as it determines the legal consequences for those involved. The answer to this question varies depending on the jurisdiction and the specific circumstances of each case.

Does the Foreign Corrupt Practices Act (FCPA) apply to foreigners?

The Foreign Corrupt Practices Act (FCPA) is a United States federal law enacted in 1977 that prohibits US citizens, companies, and entities from bribing foreign government officials to benefit their business interests. The FCPA is applicable worldwide and extends to publicly traded companies and their personnel, including officers, directors, employees, shareholders, and agents.

Since its implementation, the FCPA has been amended twice: first in 1988 to raise the standard of proof for a finding of bribery, and again in 1998 to extend its jurisdiction to include certain foreign persons and entities. This means that not only US citizens and companies but also specific non-US persons and companies acting in furtherance of a corrupt payment while in US territory can be held accountable under the FCPA.

The FCPA's anti-bribery provisions make it unlawful for US persons and certain foreign issuers of securities to make payments to foreign officials for the purpose of obtaining or retaining business. The Act defines bribes as "anything of value," encompassing gifts, travel expenses, entertainment, job offers, scholarships, charitable donations, and more.

In summary, the FCPA applies to any person or entity with a significant connection to the United States, including US citizens, residents, and businesses, as well as foreign companies and individuals who engage in corrupt practices while in US territory.

What is the definition of a foreign public official?

The definition of a foreign public official is a person who acts in an official capacity for a foreign government. This term is often used in the context of international conventions and national laws that aim to combat corruption in international trade.

According to the US Department of Justice, a "foreign official" is:

> 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.

The Foreign Corrupt Practices Act (FCPA) in the US prohibits corrupt payments to foreign officials, political parties, party officials, or candidates. 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.

The FCPA's definition of a foreign official is interpreted broadly to prevent foreign bribery and corruption. This includes both low- and high-level officials, regardless of rank or position, as well as intermediaries acting on their behalf.

In the United Kingdom, the Bribery Act defines a foreign public official as:

> an individual who —

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> — holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory outside the United Kingdom (or any subdivision of such a country or territory) (or any subdivision),

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> — exercises a public function—

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> for or on behalf of a country or territory outside the United Kingdom (or any subdivision of such a country or territory), or

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> for any public agency or public enterprise of that country or territory (or subdivision),

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> is an official or agent of a public international organisation.

The Bribery Act's definition also includes attempts to induce improper performance by a foreign public official, even if it is not related to obtaining or retaining business.

Other countries, such as France, Germany, and Greece, have their own definitions of a public official in their criminal codes, which may differ from the UK and US definitions.

What constitutes a bribe?

Bribery is generally defined as the corrupt solicitation, acceptance, or transfer of value in exchange for official action. It involves the offering, giving, soliciting, or receiving of any item of value as a means of influencing the actions of an individual holding a public or legal duty. This can include money, goods, rights in action, property, privileges, objects of value, advantages, or merely a promise to induce or influence the action, vote, or influence of a person in an official or public capacity.

The key element that distinguishes bribery from a simple gift is the existence of a "quid pro quo" relationship, where the recipient directly alters their behaviour in exchange for the gift. This means that both parties understand and agree to the arrangement, and the gift is given with the explicit intent to influence the recipient's official duties. For example, a gift given to a foreign official to obtain, retain, or direct business would constitute a bribe.

Bribery is often associated with the corruption of public officials or government employees, but it can also occur in settings that do not involve a government actor. For instance, bribing a witness in a legal proceeding or bribery in sporting contests are prohibited under federal law in the United States. Additionally, many states in the US have enacted laws prohibiting "commercial bribery" involving private businesses.

It is important to note that the definition and perception of bribery can vary across different countries and cultures. For example, political campaign contributions in the form of cash are considered criminal acts of bribery in some countries, while they are legal in the United States as long as they adhere to election laws. Similarly, tipping may be considered bribery in some societies, while in others, it may be viewed as a common social practice.

What are the penalties for bribery?

The penalties for bribery vary depending on the jurisdiction and the nature of the offence.

United States

In the United States, bribery can be a crime under federal or state law. Under US federal law, a person who offers, promises, or gives a bribe can face up to 15 years in prison and steep fines. A person convicted of federal bribery will face felony charges with penalties of up to 5 or 10 years in prison, along with steep fines. The specific penalties depend on the conduct involved and the position of the person being bribed. For example, in many states, bribery involving public or appointed officials, judges, witnesses, or jurors is a felony, carrying prison terms of a year or more. Other types of bribery often carry less severe penalties and may be misdemeanours, punishable by up to a year in a local jail.

Additional consequences for bribery in the US may also apply, such as civil penalties or forfeiture of office or employment. For instance, a public official who accepts a bribe may have to give up their current position and forfeit future eligibility for office or to work in a government position.

United Kingdom

The UK Bribery Act is stricter than its US counterpart and may extend to transactions with private persons as well as foreign officials.

Other countries

The penalties for bribery in other countries vary. For example, in some countries, tipping could be considered bribery. In some Spanish-speaking countries, bribes are referred to as "mordida" (literally, "bite"), whereas in Arab countries, they may be called "baksheesh" (a tip, gift, or gratuity) or "shay" (literally, "tea").

How does bribery affect a country's trade system?

Bribery has a significant impact on a country's trade system. When bribery becomes ingrained in a country's export system, two potential outcomes may occur. Firstly, when domestic firms and government officials engage in bribery within the home country, exports tend to increase as incentives are gained through illicit means. Secondly, the home country's imports decrease as domestic firms lose interest in foreign markets and minimise their imports.

Firms are willing to pay higher bribes if the returns are substantial, even if the risk of detection and punishment is high. Research suggests that private firms pay more bribes abroad compared to public firms. Pharmaceutical companies, for example, may offer gifts to doctors to encourage them to prescribe their drugs over those of competitors.

Bribery can also affect a country's trade system by distorting decision-making processes and undermining the integrity of the private sector and financial systems. It contributes to weakness and instability in other countries, which can have knock-on effects on the home country's economic conditions.

Furthermore, bribery can lead to lost sales for exporters and the continuation of harmful practices that damage governments and societies, particularly in developing countries that desperately need transparent and honest institutions. It penalises companies that operate fairly and seek to win contracts based on merit.

To address these issues, international conventions such as the OECD Anti-Bribery Convention and the UN Convention against Corruption have been established, with signatory countries committing to criminalise foreign bribery. Additionally, countries like the US have introduced legislation such as the Foreign Corrupt Practices Act (FCPA) to combat bribery of foreign officials.

Frequently asked questions