Wednesday, January 26, 2011

An Ocean Apart

Under the FCPA "foreign official" is defined, as relevant to this point, as "any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization ...".

Under the U.K. Bribery Act the operative term is "foreign public official" defined, as relevant to this post, as "an individual who - exercises a public function - (i) for or on behalf of a country or territory outside the United Kingdom, or (ii) for any public agency or public enterprise of that country or territory ...".

During a recent Securities Docket's webcast "The Impact of the UK Bribery Act on U.S. Companies," Vivian Robinson QC (General Counsel of the UK's Serious Fraud Office) was asked a question (submitted by me) about officials of so-called state-owned or controlled enterprises ("SOE"). To listen to the Q&A (see here around the 1 hour mark), better yet Bruce Carton (moderator of the event) summarized the Q&A's (here) including the SOE Q&A.

Q: Recognizing that the Bribery Act does not just apply to payments made to "foreign public officials," under the Bribery Act will employees of General Motors or American International Group be deemed "foreign public officials" because the U.S. government owns, either a majority stake or significant stake, in the companies? What standards will the SFO use as to the general issue of alleged so-called state-owned or state-controlled companies?

A: We don't think the Act is directed to people of that sort. We are not regarding employees of a state-owned company as falling in the ambit of Section 6. People can rest assured that is not what we are looking at at all.... Also, such people would not likely have a sufficient connection with the UK.

As I noted in a recent post (here) 60% of corporate FCPA enforcement actions in 2010 and 66% in 2009 involved (in whole or in part) SOE employees.

The DOJ and the SFO are literally separated by an ocean.

The agencies' views on whether SOE employees are "foreign officials" or "foreign public officials" also appears to be an ocean apart.

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