Should the Definition of “Foreign Official” Matter?
Lauren Connell, Managing Associate at The Volkov Law Group, rejoins us with this posting. Lauren can be reached at email@example.com. Her profile is here.
FCPA practitioners are familiar with the term “public international organization” as included in the definition of “foreign official” for FCPA liability purposes but do we really know what the term means?
Recent activity in an enforcement action for allegedly bribing a “public international organization” official, in the case U.S. v. Harder in the Eastern District of Pennsylvania, is a great opportunity to remember the importance of the term.
First, slog through one paragraph of history. “Public international organization,” was only added to the FCPA in a set of amendments in 1998, 26 years after the FCPA was first made law. The 1998 amendments broadened the “foreign official” definition after the U.S. signed the OECD Anti-Bribery Convention.
In 15 USC §78dd-1(f) the definition was amended to include:
For purposes of subparagraph (A), the term “public international organization” means— (i) an organization that is designated by Executive Order pursuant to section 1 of the International Organizations Immunities Act (22 U.S.C. § 288); or (ii) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register.
Now, Harder’s legal team is challenging that definition in its Motion to Dismiss filed October 16, 2015 in USA v. Harder, Case No. 2:15-cr-00001 (E.D. Pa. Filed Jan. 6, 2015). Since no other court has thoroughly examined this issue, the outcome may be interesting. Under the non-delegation doctrine, Harder is claiming that the “public international organization” definition is unconstitutional because it does not provide guidance, boundaries, or limits, on what can be identified as a “public international organization.”
And Harder’s Motion makes some good points. According to the Motion, the following organizations have been defined as a “public international organization” under 22 USC §288: the Caribbean Organization, the European Space Agency, the Global Fund to Fight AIDS, the International Atomic Energy Agency, the International Coffee Organization, the International Cotton Institute, the International Pacific Halibut Commission, the United Nations, and the World Health Organization. Those organizations seem random and no real pattern can be seen in comparing them.
But at the heart, isn’t a “public international organization” specific in itself? It makes its own definition. Have you defined a “public international organization” for non-attorneys? What did you base your definition on?
People on the front lines of FCPA compliance don’t need a list of organizations to memorize. With the move toward anti-bribery laws applying to all transactions, such as the UK Bribery Act that criminalised bribery in both public and private contexts, a corporate compliance program should focus upon prohibiting all bribes, not just those to some individuals or some entities.
While smart compliance departments will focus resources on higher-risk areas, and there is no doubt that bribery involving foreign officials bring with it a higher risk of discovery and prosecution, the compliance message should be consistent no matter what the circumstances are: bribery and corruption is not an acceptable way to do business. Regardless of the outcome of Harder’s Motion, the compliance profession should continue to stick with a consistent message of promoting ethical business practices in all dealings.