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Definition of foreign official baffles experts at International Bar Association's annual Anti-Corruption Conference
After two hours of putting their heads together, even a group of international anti-corruption lawyers was stumped this week when trying to define what ‘foreign official’ means in the context of corruption.
The get-together in question was a session at the International Bar Association’s (IBA) annual Anti-Corruption Conference in Paris this week.
Russia, China and the United States all have laws prohibiting the bribing of foreign officials. Similar laws are working their way through the legislative process in Indonesia and India. There is also an international convention that holds its signatories to do the same – the Organisation for Economic Cooperation and Development’s (OECD) “Convention on Combating Bribery of Foreign Public Officials in International Business Transactions”.
But if you want to know exactly what makes someone a foreign public official, it depends on who you ask.
The U.S. foreign bribery law, the Foreign Corrupt Practices Act (FCPA), defines a ‘foreign official’ as follows:
“The term ‘foreign official’ means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organisation, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organisation.”
Has that cleared up any doubts you may have had?
Not really, according to some defence lawyers who have long argued that the above definition is unhelpful. They have asked for clarification from the U.S. Department of Justice (DOJ) but, as yet, no definition has been forthcoming.
U.S. STANCE
The United States cannot force another sovereign country to crack down on corruption. It can withhold aid, it can advise businesses not to invest in that country, but it can’t stop or punish another country’s government officials for asking for or receiving bribes. The only thing that the United States can do is punish its own companies if they are found to have bribed a foreign public official. As the world’s leading enforcer of foreign bribery legislation, that is exactly what it has been doing.
The U.S. Chamber of Commerce has hired former U.S. Attorney General Michael Mukasey to lobby Congress on its behalf to make changes to the FCPA. One of those desired changes is for a clearer definition of what constitutes a foreign official.
Without a clearer definition, Mukasey told Reuters late last year, “companies have no way of knowing whether the FCPA applies to a particular transaction or business relationship,” particularly in countries like China where many companies are under state control.
In the two-hour session at the Anti-Corruption Conference, the question of defining a public official was put to a panel of eminent lawyers and experts.
France does not differentiate between foreign public officials and domestic public officials in its anti-corruption law, Stéphane Bonifassi, of the law firm Lebray & Associés told the panel. But even if it did, “there is no French case law on what is a foreign public official,” Bonifassi said.
The definition of a public official in French law is someone who “holds public office or a person discharging a public office function,” Bonifassi said.
Therefore, in recent (domestic) bribery cases, a journalist at a state owned TV channel who received a bribe was considered a public official by a French court. However, a different court decided that an engineer at the French energy company EDF, which is 84-percent owned by the state, was not a public official. The test as to whether a bribe recipient in France is a public official or not, Bonifassi said, is whether he or she “works for the general public interest.”
Part of the OECD’s Corporate Affairs division looks specifically at corporate governance of state-owned enterprises. Hans Christiansen, a member of the Corporate Affairs division and an expert on state-owned enterprises (though not a lawyer) said that, as far as the OECD was concerned, they followed a standard similar to that used by France.
If an entity is truly run on a commercial basis, it is not considered a state-owned enterprise. According to Christiansen, you can have a 100-percent state-owned enterprise, but if it is an entirely commercial organisation, then its employees are not considered public officials by the OECD.
However, just to prove that even the OECD definition is hard to nail down, he gave the example of Finland’s postal service. The service, Christiansen said, is owned by the Finnish state and clearly performs a public service. It delivers post above the Arctic Circle, something no commercial organisation would do because it’s such a difficult task and so few people live that far north. However, it also has a logistics business in Russia which is very much a commercial business.
So, is a Finnish postal worker a public official?
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