New Case May Test the Status Of Sovereign Wealth Fund Employees Under the FCPA
It has long been Department of Justice (‘‘DOJ’’) dogma that sovereign wealth funds—the often independently-run, but state-owned, investment arms of foreign governments—are considered ‘‘instrumentalities’’ of their respective governments under the U.S. Foreign Corrupt Practices Act (‘‘FCPA’’). Enacted in 1977, the FCPA makes it unlawful for certain entities and persons to make corrupt payments to ‘‘foreign officials’’ in order to obtain or retain business. In order to violate the FCPA, the government must prove that the intended recipient of the corrupt payment was a ‘‘foreign official.’’ The term ‘‘foreign official’’ is defined as ‘‘any officer or employee of a foreign government or any department, agency, or instrumentality thereof . . . .’’ The statute, however, does not define several key terms, including ‘‘instrumentality,’’ leaving the DOJ and Securities and Exchange Commission (‘‘SEC’’) to interpret the law in the most expansive and aggressive manner possible.
Reproduced with permission from Securities Regulation & Law Report, 49 SRLR 553, 4/3/17. Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com