Eleventh Circuit Takes Broad View of Who Is a 'Foreign Official' for Purposes of the FCPA
On May 16, 2014, the United States Court of Appeals for the Eleventh Circuit issued a long-awaited opinion addressing what constitutes an "instrumentality" of a foreign government under the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits bribing "foreign officials," and it defines a "foreign official" as "any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality thereof." The FCPA does not, however, define the term "instrumentality."
The Eleventh Circuit is the first appellate court to reach the issue, and held that an "instrumentality" of a foreign government is "an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own." The court explained that this is a fact-specific inquiry and outlined a number of factors that should be considered, including the extent to which the foreign government owns the entity, controls the entity's staffing, and receives the entity's profits. In affirming convictions based on payments made to officials of a state-owned telecommunications company in Haiti, the Eleventh Circuit's opinion takes an expansive view of who may qualify as a "foreign official" and provides the US government with support for its broad interpretation of the FCPA's reach.