FCPA: Foreign Adoptions

In terms of anti-bribery compliance considerations, mere status as a nonprofit organization does not exempt an entity or organization from being subject to the anti-bribery provisions.  Under the anti-bribery provisions of the FCPA, no legal basis exists for distinguishing between a traditional commercial enterprise and one established as a nonprofit entity or organization.  This is consistent with the OECD Anti-Bribery Convention.¹

Under the OECD Anti-Bribery Convention, no distinction exists a nonprofit entity or organization.  The OECD Working Group “has asserted that the prohibition under the OECD Convention ‘applies to bribery in the conduct of all international busi­ness, not just business “for profit”.’”² Moreover, the “OECD Working Group has further asserted that the OECD ‘Convention does not limit its scope to transactions that are profitable, and specifically includes benefits to the briber other than pecuniary gain.’”³

The facts and circumstances of a particular situation will ultimately be determinative as to whether the elements required for a violation of the anti-bribery provisions are present. But until a well-founded determination is made that the other elements required for a violation of the anti-bribery provisions cannot be met, a nonprofit entity or organization must be presumed to be subject to the terms of the anti-bribery provisions.

Actions on the part of a U.S.-based adoption agency have led to criminal charges for conspiring to violate the anti-bribery provisions of the FCPA.⁴  An attorney in Ugandan was involved in causing the bribes “to be paid to Ugandan Government Officials for the purpose of influencing them to misuse their official positions by taking actions that assisted [the attorney and the] Adoption Agency in facilitating adoptions.”⁵

These bribes included, but were not limited to:  (1) bribes to probation officers to influence them to issue favorable probation reports recommending that a particular child be placed into an orphanage; (2) bribes to court registrars to influence them to assign particular cases to “adoption-friendly” Ugandan Judges; and (3) bribes to Ugandan Judges to influence them to issue favorable guardianship orders to (sic) Adoption Agency’s clients.⁶

Significantly, the bribes were concealed in the form of fees.⁷  The clients of the Adoption Agency were not aware of what was taking place.⁸  Moreover, the conspiracy also contemplated preparing documents to mislead U.S. Department of State officials as to what was taking place.⁹  The critical consideration is that whatever the nature of a foreign endeavor, it makes no difference if an improper inducement is offered on behalf of an entity or individual subject to the anti-bribery provisions or the FCPA and other anti-bribery regimes, including Canada’s CFPOA, the UK Bribery Act, and Australia’s Criminal Code.

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¹Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, OECD Doc. DAFFE/IME/BR(97)20, reprinted in 37 I.L.M. 1 (1998).

²Stuart H. Deming, Anti-Bribery Law  in Common Law Jurisdictions, at 17 (Oxford U. Press 2014) (quoting from OECD Directorate for Financial and Enterprise Affairs, Working Group on Bribery in International Business Transactions, Canada: Phase 3 Report on the Application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 2009 Revised Recommendation on Combating Bribery in International Business Transactions (Phase 3 Report), at 21 (Mar. 2011).

³Id. (quoting from Phase 3 Report, supra note 2, at ¶ 21).

⁴Information, United States v. Longoria, No. 19-cr-00482 (Aug. 12, 2019), ECF No. 1.

⁵Id. at ¶¶ 4, 7.

⁶Id. at ¶ 9.

⁷Id. at ¶ 10.

⁸Id. at ¶ 11.

⁹Id. at ¶ 12.