Who Does the Foreign Corrupt Practices Act Apply To?

The Foreign Corrupt Practices Act applies to four overlapping groups: U.S. citizens, residents, and U.S.-based businesses; companies with securities listed on a U.S. stock exchange; foreign persons or entities that take any act inside the United States to further a corrupt payment; and the officers, directors, employees, and agents who act on behalf of any of those. If you fall into one of those categories, the law follows you — often across borders — whenever a payment or offer is directed at a foreign government official to win or keep business.

U.S. Citizens, Residents, and U.S. Businesses

The first group the statute calls “domestic concerns.” That term covers any individual who is a citizen, national, or resident of the United States, and any corporation, partnership, sole proprietorship, or other business entity that has its principal place of business in the United States or is organized under the laws of a U.S. state or territory.¹

What matters is legal status, not location. A U.S. citizen working abroad is a domestic concern. A Delaware corporation operating entirely overseas is a domestic concern. Federal jurisdiction follows these parties anywhere in the world, and the law prohibits them from corruptly offering, paying, promising, or authorizing anything of value to a foreign official to obtain or retain business.

Companies Listed on U.S. Exchanges

The second group is “issuers”: companies with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, or that must file reports under Section 15(d) of that act.² In practice, that captures both American and foreign companies whose stock or American Depositary Receipts trade on U.S. exchanges.

Issuers carry a double burden. They are bound by the same anti-bribery rules as domestic concerns, and they must also comply with the FCPA’s accounting provisions. Those provisions require issuers to keep books and records that accurately reflect their transactions and to maintain internal accounting controls that ensure transactions are properly authorized and that recorded assets match actual assets.³ A failure of records or controls is itself a violation, whether or not any bribery took place.

An issuer can also be prosecuted for conduct that occurred entirely outside the United States. A foreign subsidiary’s bribe paid in another country can produce liability for the U.S.-listed parent when the parent authorized the payment, benefited from it, or failed to maintain controls that should have caught it.

Foreign Companies and People

The FCPA also reaches parties with no U.S. market presence and no U.S. citizenship, if they act on American soil or through American systems. The statute covers any person who is neither an issuer nor a domestic concern — including foreign nationals and foreign-organized businesses — when they commit an act while inside U.S. territory to further a corrupt payment.⁴

Jurisdiction can also attach through the use of “any means or instrumentality of interstate commerce,” a phrase the statute defines to include telephones and electronic communications.⁴ Common triggers include routing a wire transfer through a U.S. bank, using U.S.-based email servers, or attending a meeting on American soil to discuss a corrupt arrangement. A single transaction touching American infrastructure can be enough for federal prosecutors to bring a case.

Individuals Acting for Covered Entities

Coverage does not stop at the company level. Officers, directors, employees, stockholders acting on behalf of a covered entity, and outside agents are all individually liable for anti-bribery violations they willfully commit.² The reach extends to third-party consultants, distributors, and joint-venture partners when they represent a regulated company’s interests.

Following corporate orders is not a defense. The Department of Justice routinely pursues individual prosecutions alongside or instead of corporate actions, and the SEC may seek a permanent bar preventing a convicted individual from serving as an officer or director of any public company.⁵ If an individual is fined under the FCPA, their employer is prohibited from paying or reimbursing that fine.⁶

Prosecutors pay particular attention to executives who authorize corrupt payments or deliberately look the other way when red flags appear. Accountability follows the person regardless of title or rank.

Who Counts as a Foreign Official

The anti-bribery rules apply only to payments directed at “foreign officials,” but the statute defines that term broadly. It covers any officer or employee of a foreign government or of any department, agency, or instrumentality of that government; any official of a public international organization; and anyone acting in an official capacity on behalf of those bodies.⁷

The word “instrumentality” catches many businesses off guard. Federal enforcement agencies treat employees of state-owned or state-controlled enterprises as foreign officials, and the Eleventh Circuit upheld this reading, defining an instrumentality as an entity controlled by a foreign government that performs a function the government treats as its own. Under that interpretation, doctors at government-run hospitals, professors at public universities, and purchasing agents at state-owned companies can all qualify as foreign officials.

The definition also extends to officials of “public international organizations” designated by executive order, including institutions of the European Union — the European Commission, European Parliament, and European Central Bank among them — and Europol.⁷ A payment to an official at one of those organizations carries the same FCPA exposure as a payment to a cabinet minister.

What Conduct Actually Triggers the Law

Being in a covered category does not by itself put you in violation. The FCPA reaches payments made “corruptly” — meaning payments intended to induce a foreign official to misuse their position by steering business to the payor, granting preferential treatment, or failing to perform an official duty. The payment does not need to succeed. Offering or authorizing a bribe with corrupt intent is enough, even if the official never accepts.

When payments run through intermediaries such as agents or consultants, the statute applies a broad knowledge standard. A person acts “knowingly” if they are aware that a corrupt payment is substantially certain to occur, or if they hold a firm belief that such a circumstance exists.¹ The statute also captures willful blindness: being aware of a high probability that a bribe is being paid but deliberately avoiding the facts. Executives cannot insulate themselves by choosing not to ask questions when warning signs are obvious.

What Falls Outside the Anti-Bribery Rules

The statute carves out one narrow exception and provides two affirmative defenses that a covered person can raise.

Facilitation Payments

Small payments made to speed up “routine governmental action” are not prohibited. The statute lists examples: processing permits and licenses, handling paperwork such as visas, scheduling inspections, and providing basic public services like phone, power, and water connections.¹ The exception does not cover any payment tied to awarding or continuing business with a particular company. Many companies have eliminated facilitation payments from their policies entirely, because the line to bribery is easy to cross and many foreign countries prohibit these payments under local law.

Local Law Defense

A payment is not a violation if it was lawful under the written laws and regulations of the foreign official’s country. The defendant bears the burden of proving this defense by a preponderance of the evidence. The DOJ’s position is that the written law must affirmatively permit the conduct; the mere absence of a prohibition is not enough.

Reasonable and Bona Fide Expenditures

Reasonable travel, lodging, and meal expenses paid on behalf of a foreign official can be defended when they are directly related to promoting or demonstrating products or services, or to carrying out a contract with the foreign government. Payments should go to service providers rather than to the official in cash, and they should be proportional to the purpose — economy airfare and mid-range hotels, not luxury resorts.

How Enforcement Is Divided

The Department of Justice handles criminal FCPA prosecutions. The Securities and Exchange Commission brings civil enforcement actions, particularly against issuers.⁸ Many major cases involve parallel actions by both agencies. The SEC also runs a whistleblower program that authorizes monetary awards of 10 to 30 percent of sanctions collected when an enforcement action results in more than $1,000,000 in penalties, giving employees, agents, and other insiders a direct financial reason to report suspected bribery or accounting manipulation.⁹

1
Office of the Law Revision Counsel. 15 USC 78dd-2 – Prohibited Foreign Trade Practices by Domestic Concerns
2
Office of the Law Revision Counsel. 15 USC 78dd-1 – Prohibited Foreign Trade Practices by Issuers
3
Office of the Law Revision Counsel. 15 US Code 78m – Periodical and Other Reports
4
Office of the Law Revision Counsel. 15 USC 78dd-3 – Prohibited Foreign Trade Practices by Persons Other Than Issuers or Domestic Concerns
5
U.S. Securities and Exchange Commission. Gordon J. Coburn and Steven E. Schwartz
6
Office of the Law Revision Counsel. 15 USC 78ff – Penalties
7
Office of the Law Revision Counsel. 15 US Code 78dd-1 – Prohibited Foreign Trade Practices by Issuers
8
U.S. Department of Justice. FCPA Resource Guide
9
U.S. Securities and Exchange Commission. Whistleblower Program