The U.S. Foreign Extortion Prevention Act: A new tool in the fight against global corruption

According to Transparency International’s latest Corruption Perception Index (CPI), citizens of over 120 countries face serious corruption problems. In countries that are governed by full-blown kleptocracies, or “rule by thieves”, corrupt officials routinely steal from them with impunity. And a global trend of weakening justice systems, in particular, is reducing accountability for public officials and creating fertile ground for corrupt acts like bribery and the abuse of power to thrive.

Fortunately, a landmark new law from the United States Government offers a tool to combat bribery by foreign officials at its source, provide incentives for foreign governments to crack down on corruption in their own countries, and bring some justice to many of its victims.

Late last year, the United States adopted the Foreign Extortion Prevention Act (FEPA). FEPA makes it a crime for any foreign official—including any current or former senior official or immediate family member thereof—to ask for, or to accept, a bribe from any company that is listed on a US stock exchange, from any American or any American company, or while that official is in the United States.

Previously, US law only made it a crime for any US citizen or company to offer or give a bribe to a foreign official, but did nothing to disincentivise, let alone punish, a foreign official from asking for or accepting a bribe. A survey by the Organisation for Economic Co-operation and Development (OECD) revealed that in 80 percent of demand-side bribery cases studied, the foreign officials involved were never criminally sanctioned by their home governments.

The parade of horribles enabled by this corruption touches on multiple issues, from human trafficking to environmental crimes, endangering public health to supporting militaristic regimes. In Uganda, social welfare officers and court officials used their positions to accept bribes from a US-based adoption agency. This scheme facilitated the trafficking of Ugandan children by steering adoption cases to “adoption-friendly” judges. Similarly, in Indonesia, a government official used his position to accept bribes from a US-based agricultural company. The company, a leading producer of genetically modified crops, illegally paid the government official in exchange for undermining a requirement that an environmental impact study take place before the sale of the crops could be approved. Under FEPA, those responsible for such acts could be prosecuted in the US.

Transparency International US (TI US) and Transparency International chapters across the world were instrumental in turning FEPA from an idea into reality. TI US was on the front lines in drafting the legislation, and spearheaded the civil society campaign that made it law, bringing together dozens of organisations and leaders from across the political spectrum, including the US Chamber of Commerce and Greenpeace, in support of the measure. Through compelling testimonials presented to the US Government and national and foreign media, Transparency International chapters effectively demonstrated how FEPA had the power to disrupt the cycles of corruption that had captured their politicians and political leadership.

While the UN Convention against Corruption (UNCAC) unfortunately only addresses the criminalisation of the demand side of foreign bribery as an optional measure, doing so is required under the Council of Europe Criminal Law Convention on Corruption. FEPA is thus in line with these international frameworks and provides the global anti-corruption movement with a new means of holding the corrupt to account.

However, the coming months will be critical for ensuring that this law is more than just words on paper. For example, while the United States was the first country in the world to make it a crime for a citizen or company to offer or give a bribe to a foreign official (through the US Foreign Corrupt Practices Act, as mentioned above), this law essentially lay dormant and unused for some 25 years.

FEPA does fortunately reflect an express commitment by the Biden Administration to work to criminalise the demand-side of foreign bribery and won strong support from Republicans and Democrats alike. However, realising the full potential of this law will require sustained political will, across future administrations. Ongoing support and oversight from Congress will also be key. This is particularly critical considering the intricate foreign policy considerations inherent in prosecuting foreign officials.

TI US will continue to engage with those US officials responsible for implementing and enforcing FEPA (namely, attorneys with the US Department of Justice). This includes urging them to produce easily accessible guidance on how potential violations of FEPA can be assembled and submitted to the US Government, including by TI chapters.

Transparency International and its chapters can also work to build a robust, politically conscious, and ultimately highly impactful pipeline of submissions that allow the US Government to enforce FEPA to the greatest extent possible. Ideally, the U.S. Government would assist foreign governments that are willing, but not able (perhaps due to a lack of resources or capacity), to bring cases against their own officials. In this endeavour, we will also engage, and aspire to partner with, other stakeholders allied in our movement whose missions align with the fight against corruption.

FEPA is a model law that any foreign government genuinely committed to combating corruption could adopt. It also offers the potential to provide significant strides toward justice for many victims of corruption around the world. However, it remains up to us, as part of the global anti-corruption movement, to meet this moment and help turn this law into reality.