On October 6, 2014, the Supreme Court declined to review the 11th Circuit’s decision in U.S. v. Esquenazi, et. al., leaving standing the appellate court’s expansive definition of “foreign official” under the Foreign Corrupt Practices Act (FCPA). The 11th Circuit’s May 16, 2014 decision defined the term “instrumentality of a foreign government”—a term included in the FCPA’s definition of “foreign official,” but left undefined by the statute.
The appropriate definition of the term arose as a key issue at trial in the context of the definition that would be included in jury instructions. The defendants argued for a narrow reading of the term that would apply only to non-state owned entities that “exist for the sole and exclusive purpose of performing a public function traditionally carried out by the government” and are thus “similar to political subdivisions.” The prosecution contended that this narrow reading of the term would render it superfluous by encompassing only entities captured by other prongs of the FCPA’s definition of a “foreign official.” Instead, the prosecution argued that the term “instrumentality” should be interpreted to include both state-owned and non-state owned entities that perform functions on behalf of the government, beyond just entities that are akin to state agencies.
In affirming the defendants’ convictions for violations of the FCPA, the 11th Circuit adopted a more expansive definition consistent with the prosecution’s position, holding that the FCPA’s bribery prohibition extends to payments offered or made to officers or employees of entities “controlled by the government of a foreign country that performs a function the controlling government treats as its own.”
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