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Definition of a "Foreign Official" Under the FCPA

The Foreign Corrupt Practices Act states that it is unlawful to give a bribe to “any officer or employee of a foreign government or any department, agency or instrumentality thereof [. . . ] or any person acting in an official capacity for or on behalf of any such government, department, agency, or instrumentality." Clearly the definition covers traditional government employees or representatives, but the SEC and the DOJ have successfully expanded the scope to include other types of employees and officials.

Employees of State-Controlled Entities Are Foreign Officials

The Foreign Corruption Practices Act considers employees of state-owned or state controlled entities a “foreign official” under the theory that state-controlled entities are an “instrumentality” of the foreign government. If the foreign government is deemed to exercise substantial control over the state-controlled entity, then the foreign government does not need to own 100% of the company's stock. Many foreign companies do in fact exercise this type of control over a variety of company types, including:

  •     Oil and gas entities
  •     Hospitals and medical care facilities
  •     Defense Contractors
  •     Education organizations
  •     Laboratories and research facilities
  •     Telecommunication companies
  •     Energy distribution companies
  •     Real Estate companies

Employee Rank and Title Is Irrelevant

The Foreign Corruption Practices Act makes no distinction of rank or title of a foreign official. Even a payment to the lowest level government official violates the Foreign Corrupt Practices Act.  Additionally, once a state-controlled entity is deemed to violate the provisions of the Foreign Corrupt Practices Act, any payment to any employee of that state-controlled entity is deemed a violation of the Foreign Corrupt Practices Act. If you have information about payment made to a foreign official and are unsure whether it constitutes an illegal bribe, contact a whistleblower lawyer for a free evaluation.