or of a public international organization, or any per- son acting in an official capacity for or on behalf of any such government or department, agency, or in-
strumentality, or for or on behalf of any such public
international organization.! 12
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 for- eign government's behalf.!? The FCPA thus covers cor- rupt payments to low-ranking employees and high-level officials alike.!*
The FCPA prohibits payments to foreign officials, not to foreign governments.'> That said, companies contem- plating contributions or donations to foreign governments should take steps to ensure that no monies are used for cor- rupt 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 instrumental- ity of a foreign government. When a foreign government is organized in a fashion similar to the US. system, what constitutes a government department or agency is typically clear (e.g., a ministry of energy, national security agency, or transportation authority).!!* However, governments can be organized in very different ways.'!” Many operate through state-owned. and state-controlled entities, particularly in such areas as aerospace and defense manufacturing, bank- ing and finance, healthcare and life sciences, energy and extractive industries, telecommunications, and transporta- tion.'!® 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 particu- lar entity constitutes an “instrumentality” under the FCPA requires a fact-specific analysis of an entity’s ownership, control, status, and function.!? A number of courts have
approved final jury instructions providing a non-exclusive
The FCPA:
Anti-Bribery Provisions
list of factors to be considered:
e the foreign state’s extent of ownership of the entity;
e 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);
e the foreign state’s characterization of the entity and its employees;
e the circumstances surrounding the entity's creation;
e the purpose of the entity’s activities;
e the entity’s obligations and privileges under the foreign state’s law;
e the exclusive or controlling power vested in the entity to administer its designated functions;
e the level of financial support by the foreign state (including subsidies, special tax treatment, government-mandated fees, and loans);
e the entity's provision of services to the jurisdiction’s residents;
e whether the governmental end or purpose sought to be achieved is expressed in the policies of the foreign government; and
e the general perception that the entity is performing official or governmental functions.'”°
Companies should consider these factors when eval- uating the risk of FCPA violations and designing compli- ance programs.
DOJ and SEC have pursued cases involving instru- mentalities 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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