Second Circuit Limits Scope of FCPA Anti-Corruption Provisions Imposed Under Agency Principles – White-Collar Crime, Anti-Corruption, and Fraud
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On August 12, 2022, the United States Court of Appeals for the Second Circuit issued another decision in a long-running criminal lawsuit that has significant implications for the scope of U.S. corrupt practice law in the United States. (FCPA) on foreign persons and companies. In its second opinion in a case spanning roughly nine years, the Second Circuit was asked to determine the scope of an FCPA provision that makes certain acts of an “agent” of a “domestic matter” illegal. The Second Circuit ruled that Lawrence Hoskins, a foreign national who previously worked for a UK subsidiary of Alstom SA, a global company headquartered in France, was not acting as an “agent” of a US subsidiary separate from Alstom SA, which hired consultants to bribe Indonesian government officials. The decision of the Second Circuit in United States vs. Hoskins, —F.4th—, 2022 WL 330357 (2d Cir. Aug. 12, 2022), will likely prompt federal authorities to give renewed attention to the collection and evaluation of evidence associated with the required factual investigation to establish the agency in applicable cases. Companies and individuals facing scrutiny under an agency theory should carefully assess the evidentiary record on the agency and push back against the government’s broad arguments. The Hoskin The ruling also serves as a reminder to companies to consider the structure and substance of their relationships with subsidiaries, employees of subsidiaries and other third parties who may expose the company to liability when it is determined that these entities and individuals act as agents of society.
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