The Extraterritorial Reach of the US Foreign Corrupt Practices Act and the UK Bribery Act
Last month, in two separate enforcement actions, judges in the United States District Court for the Southern District of New York issued rulings which addressed when the United States Securities and Exchange Commission could bring enforcement actions in the U.S. against foreign nationals under the Foreign Corrupt Practices Act (FCPA) in cases involving bribes paid in foreign countries. In one case, the court held that the SEC had jurisdiction; in the other, the court dismissed the case. These cases are of great interest because they help to explain the outer limits of the SEC’s extraterritorial jurisdiction in cases where the relevant conduct has taken place abroad.
The UK counterpart to the FCPA, the Bribery Act, which took effect in July 2011, also provides for extraterritorial jurisdiction. The Bribery Act extends jurisdiction to both offences committed in the UK and offences committed outside the UK by those who have a “close connection” to the UK. In addition, the Bribery Act makes it an offence for companies to fail to prevent bribery. This provision applies not only to companies that are incorporated in the UK but also to companies which carry on business, or part of their business, in the UK. Under both laws, there is a real potential for enforcement actions even when the conduct at issue appears to be quite removed from either the United States or the United Kingdom.