"State-Owned Enterprises" Under The FCPA

Introduction

Five recent cases in four federal district courts have addressed the long disputed question of whether the Foreign Corrupt Practices Act (FCPA or Act) applies to bribes paid to officers or employees of state-owned enterprises (SOEs).  No court has previously ruled on the applicability of the statute to such payments, and the recent decisions are, therefore, potentially significant for future enforcement of the Act.

The FCPA prohibits payments to "foreign officials."  It defines that term to include officers and employees of government departments or agencies.  The FCPA also defines "foreign officials" to include officers and employees of government "instrumentalities" but leaves that term undefined.  The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have long construed "instrumentalities" broadly to encompass SOEs, thereby making officers and employees of SOEs "foreign officials" for purposes of the FCPA.  Private