FCPA Definitions of “Foreign Official” and “Instrumentality” Remain Broad

International law firm White & Case has produced a useful overview of recent judicial decisions regarding the definition of “foreign official” and “instrumentality” of the government under the Foreign Corrupt Practices Act. Their analysis highlights an important issue for businesses that interact with foreign state-owned companies: 

“… courts faced with challenges to charges based on the terms ‘foreign official’ or ‘instrumentality’ as used in the FCPA have rejected bright-line approaches in favor of case-by-case inquiries based on the totality of the circumstances. These recent cases point to a growing consensus and provide some guidance, but the fact-intensive case-by-case approach utilized by courts fails to provide certainty to companies that interact with business entities affiliated with a foreign government… 

Given the case-by-case approach that has been increasingly endorsed, corporations should continue to be particularly mindful of FCPA risks when transacting business with state-owned entities, especially in high-risk areas. The safest approach remains to interpret the term ‘instrumentality’ broadly and operate as if all employees of state-owned entities are ‘foreign officials’ for FCPA purposes.”

Read the full update, Courts Reject Bright-Line Approach to Defining “Foreign Official” in Favor of Fact-Based Approach, Creating Greater Uncertainty for Business, White & Case LLP»