The “Princelings” and the Banks: When Does a Legitimate Business Practice Become Criminal Corruption in Violation of the Foreign Corrupt Practices Act?

Beverley Earle & Anita Cava | January 1, 2017

The Foreign Corrupt Practices Act (FCPA) prohibits the bribery of foreign public officials. When does hiring a relative of a foreign official cross the line into criminal activity in violation of the Act? We suggest that there should not be an absolute prohibition on hiring qualified relatives of foreign officials. Rather, there must be clear safeguards to prevent quid pro quo arrangements that further corruption.

We examine the lack of case precedents under the statute and look to cases under other statutes that examine the definition of quid pro quo to look for analogies to the FCPA. We conclude with how the DOJ and SEC could clarify this murky line between legal and illegal activity, thus giving companies operating abroad certainty that their hiring will not be the subject of FCPA enforcement action.