From an FCPA compliance perspective, the jurisdictional reach of the anti-bribery provisions of the FCPA must always be kept in mind. These are the provisions that prohibit improper inducements to foreign officials. For entities, the key determination is whether the entity is an issuer or a domestic concern. An issuer is an entity that is required under the Securities Exchange Act to register under Section 12 or to file reports under Section 15(d).1 Both foreign and domestic entities can be issuers and subject to the FCPA.
In almost every situation, a domestic concern subject to the anti-bribery provisions of the FCPA is any juridical entity organized under the law of a state of the United States or a territory, possession, or commonwealth of the United States.2 Except for issuers, foreign entities, including foreign entities of issuers, are generally not subject to the anti-bribery provisions of the FCPA.
But any juridical entity with its principal place of business in the United States is also a domestic concern subject to the anti-bribery provisions.3 This means that, regardless of where the entity was organized, under what laws the entity was organized, or what might be commonly referred to as the “nationality” of the entity, it still may be a domestic concern under the terms of the anti-bribery provisions if its principal place of business is in the United States.
In determining whether an entity is subject to the terms of the anti-bribery provisions, care needs to be exercised when assessing what constitutes an entity’s principal place of business. This particular provision of the FCPA has yet to be directly addressed by the courts. However, many of the factors that courts have traditionally looked to in a civil context in determining an entity’s principal place of business are likely to be relevant in the context of the anti-bribery provisions of the FCPA.
Although this provision of the FCPA is rarely used, it has on occasion served as a basis for jurisdiction in enforcement actions brought by the U.S. Department of Justice. One of the more recent instances involved the charges brought against Willbros Group, Inc. and Willbros International Inc.4 Both were Panamanian companies. Jurisdiction over each was established since Willbros Group was an issuer and Willbros International’s principal place of business was in the United States.
115 U.S.C. §§ 781, 780(d).
215 U.S.C. § 78dd-2(h)(1)(B).
4Information, United States v. Willbros Group, Inc., No. H-08-CR-00287, at ¶ 6 (S.D. Tex., filed May 14, 2008).