US companies and residents take note: Foreign Extortion Prevention Act goes into effect
Signed into law in December 2023, the Foreign Extortion Prevention Act (FEPA) criminalizes the “demand side” of foreign bribery – that is, the Act makes it illegal for any foreign official to demand, receive, or agree to receive a bribe from a US citizen, company, or resident.
FEPA is designed to work in conjunction with the Foreign Corrupt Practices Act (FCPA), which criminalizes the "supply side" of foreign bribery (ie, the offering or provision of something of value to obtain or retain business). The Act amends the US domestic foreign bribery statute, 18 U.S.C. § 201, by adding the term "foreign officials" to the categories of persons forbidden from engaging in bribery schemes.
In order for a foreign government official to be subject to the Act, the conduct must have occurred in the US, or a bribe must have been solicited from a US citizen, resident, or SEC listed company.
Penalties for violating FEPA include up to 15 years imprisonment and a fine of up to $250,000 or three times the value of the bribe, whichever is greater.
US companies doing business in Latin America, US residents, and foreign officials are encouraged to take note. For more information on how FEPA may impact your business, please contact the author.
