FCPA: Establishing Jurisdiction Through Correspondent Banks

As part of the implementation of its ratification of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention”),1 in 1998 the United States expanded the jurisdictional reach of the FCPA to anyone while acting within the United States.  This is sometimes referred to as the third prong of the anti-bribery provisions or simply “dd-3.”2  The first two prongs related to whether an issuer or domestic concern engaged in the prohibited conduct.3

Previous to the adoption of the dd-3, the anti-bribery provisions did not apply to situations where someone, like a foreign citizen visiting the United States who, during his visit, met with a foreign official for purposes of paying or arranging a bribe.  That changed in 1998 with the addition of dd-3.  Anyone, regardless of whether an issuer or domestic concerns is involved, is now subject to the anti-bribery provisions is they engage in any act in furtherance of the prohibited conduct within the United States.  In essence, territorial jurisdiction is established for anyone.

The question of how broadly this third prong, that is, dd-3, will be applied has yet to be addressed in any significant manner by the courts.  As may be anticipated of any law enforcement agency, a careful yet aggressive application of dd-3 is increasingly evident in the enforcement actions undertaken by the U.S. Department of Justice.  The recent resolution by the Justice Department with Samsung Heavy Industries Co. Ltd. Demonstrates how relatively incidental contact to the United States may serve to establish jurisdiction over a foreign company involved with paying bribes in another foreign country.

The criminal information filed as part of the resolution and deferred prosecution agreement in United States v. Samsung Heavy Industries Co. lays out a sophisticated scheme to bribe “Petróleo Brasileiro S.A. – Petrobras (‘Petrobras), a Brazilian state-owned oil company” by Samsung Heavy Industries Co. Ltd.4  Repeated reference is made to the use of “correspondent banks” in the United States to facilitate the transfer of questionable payments from one foreign jurisdiction to another.5  There were for payments not intended to be directed to or from a bank account in the United States.

Given the central role that the United States plays in banking throughout much of the world, the extent and breath of the jurisdiction of the anti-bribery provisions is untold.  However, the information did rely solely on the use of correspondent banks as a basis for jurisdiction.  A telephone call and an email emanated from the United States in furtherance of the scheme.6  Nonetheless, the resolution dramatically demonstrates how easily that foreign companies not generally subject to the anti-bribery provisions of the FCPA may become subject to their terms.


1OECD Doc. DAFFE/IME/BR(97)20, reprinted in 37 I.L.M. 1 (1998).

215 U.S.C. § 78dd-3(a).

3Id. at §§ 78dd-1(a), 78dd-2(a).

4Criminal Information, at ¶ 6, United States v. Samsung Heavy Industries Co. Ltd., No. 19-cr-00328 (E.D.Va., filed Nov. 22, 2019), ECF No. 14.

5Id. at ¶¶ 27-29, 31, 37(f), 37(i), 37(j), 37(k), 37(l), 37(m).

6Id. at ¶¶  37(a), 37(b).