Foreign Corrupt Practices Act (FCPA) - The World in U.S. Courts: Summer-Fall 2018

Conspiracy and Aiding-and-Abetting Charges Cannot Expand Territorial Reach of the FCPA to a Non-US Defendant Who Otherwise Would Not Be Liable for His Ex-US Conduct

United States v. Hoskins, US Court of Appeals for the Second Circuit, August 24, 2018

The US charged various individuals and companies related to Alstom, the international heavy equipment manufacturer, with FCPA violations in connection with an alleged scheme to bribe officials in Indonesia. One defendant, Hoskins, was a nonresident of the US and a "foreign" national. As relevant here, the FCPA extends to foreign nationals acting "while present" in the US. Hoskins had never traveled to the US but was charged with conspiracy to violate the FCPA and "aiding and abetting" the violations of others. (We do not address here the US's claim that Hoskins also was liable as an "agent" of a US company.)

The Court of Appeals observed that, in general, criminal defendants may be charged with conspiracy or complicity in a crime they could not have directly have committed. But a "narrowly circumscribed" exception exists where it is "clear from the structure of the legislative scheme" that Congress intended that liability not be extended. That intent may not be inferred merely from the fact that a statute limits the universe of potential defendants but instead requires "something more" suggesting a specific intention not to criminalize a class of defendants' conduct in any way. That "something more" was found in the FCPA in the form of the presumption against extraterritorial application of US statutes that can only be overcome by a clear affirmative indication to apply a statute outside US borders, and legislative history suggesting that Congress intended to lay out precisely the scope of liability under the statute. The Court of Appeals also stated that the presumption against extraterritorial application of US statutes was itself an independent reason not to extend the FCPA to Hoskins' conduct outside the US via the tools of conspiracy and aiding-and-abetting.