In First Ruling by a Court of Appeals, Eleventh Circuit Adopts Broad Definition of “Foreign Instrumentality” under FCPA

May 22, 2014

The Foreign Corrupt Practices Act (“FCPA”) prohibits bribing a “foreign official,” yet courts have rarely had the chance to weigh in on who exactly qualifies as a foreign official. Enforcement agencies have taken the position that state-owned entities generally are covered “foreign instrumentalities”—and therefore their employees are “foreign officials”—while others have countered that only entities performing a traditional, core government function, not a commercial function, count as “foreign instrumentalities.” Many recent investigations and prosecutions have involved employees of state-owned or -controlled entities such as oil companies, banks, and healthcare providers, so the scope of these definitions is crucial to the government’s enforcement activities.

On May 16, 2014, the U.S. Court of Appeals for the Eleventh Circuit—which has jurisdiction over federal cases in Florida, Georgia, and Alabama—issued the first appellate court decision interpreting the term “foreign instrumentality.” Siding with the government, the Court upheld the convictions of two owners of a Florida-based company who had been found to have bribed employees of the Haitian telecommunications company, Teleco.

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