If a group of Oil Traders from Switzerland invite regional executives of Russian Oil Exports on an all-expenses paid trip with lavish outings and entertainment, is this a violation of the FCPA?

1 Answer | Add Yours

teachsuccess's profile pic

teachsuccess | High School Teacher | (Level 1) Educator Emeritus

Posted on

Hello! Interesting question. From the United States Department Of Justice website:

Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

Although the American and Swiss traders did not submit direct payments to the Russians, the entertainment offered can be construed as indirect influence for the purposes of securing an improper advantage in business transactions.

Alas, the law allows for prosecution of government officials, but is vague on bribery of business people who are not government officials. Take the real world example of Lindsey Manufacturing. Company leaders were indicted on charges of violating the FCPA. Apparently, employees of a state-owned Mexican utility were bribed with million dollar sportscars and yachts. Lindsey Manufacturing contended that the case should have been thrown out of court as the employees were not government officials.

The scope of the bribery ban is a central issue. Although the statute makes it illegal for U.S. companies to bribe foreign government officials to win business, bribing employees of private firms in other countries is another matter; the FCPA doesn’t address that.

The Lindsey defendants were eventually convicted on all counts, but corporations have begged for clarity on the law in recent years.

To go back to your question, several things come into play. Your (fictional?) oil traders may or may not be government officials, yet, it is clear that bribery did indeed occur. In a court case, the United States government would bring charges. Based on government definitions of the law and previous legal cases, the probability of conviction is very high. For more information, please consult the FCPA website below or refer to the contact info to obtain legal clarity on the issue.

Hope this helps! Thanks for the interesting question.

Sources:

We’ve answered 318,988 questions. We can answer yours, too.

Ask a question