FCPA Liability

Two recent developments bring the potential for individual criminal liability under the U.S. Foreign Corrupt Practices Act (“FCPA”) back into the spotlight. These developments underscore the extensive reach of the FCPA, which can extend criminal liability to U.S. and non-U.S. citizens alike and to circumstances where an individual does not have actual knowledge that a bribe was paid.

• On Dec. 14, the U.S. Court of Appeals for the Second Circuit affirmed the FCPA conviction of Frederic Bourke based on his participation as an investor in a bribery scheme involving a privatization venture in Azerbaijan.[1] Of particular importance is the court’s ruling that Bourke could properly have been convicted on a theory that he “consciously avoided” knowing that bribes were being paid, even if he lacked actual knowledge of the bribery scheme. The court’s ruling highlights the importance of conducting due diligence — and, if necessary, declining to participate in a transaction — if and when there are red flags indicating that a bribery scheme may be afoot.
• On Dec. 12, the U.S. Department of Justice indicted several former executives and agents of Siemens AG and its subsidiaries. Even though none of the defendants is a U.S. citizen, and even though the alleged bribery scheme related to efforts by the Argentine subsidiary of a German company to win a contract with the Argentine government, the defendants now find themselves accused of violating U.S. law and facing the prospect of extradition, prosecution and possible imprisonment in the United States. This case thus illustrates the long jurisdictional reach of the FCPA.