FCPA Update August 2022

Published date01 September 2022
Subject MatterCriminal Law, White Collar Crime, Anti-Corruption & Fraud
Law FirmDebevoise & Plimpton
AuthorMr Satish M. Kini, Andrew M. Levine, Winston M. Paes, Bruce E. Yannett, Robert T. Dura, Philip Rohlik, Andreas A. Glimenakis and Joseph Ptomey

Revisiting Hoskins: Second Circuit Holds Foreign Non-Issuers not Present in the United States are not Subject to the FCPA Absent Common Law Agency Relationship

In a significant ruling for foreign non-issuers, the Second Circuit once again strictly construed the scope of the FCPA's anti-bribery provisions to limit the government's ability to charge foreign non-issuers not present in the United States. Earlier this month, former Alstom executive Lawrence Hoskins won his second appeal to the Second Circuit in his bid to have the court throw out the FCPA charges against him on jurisdictional grounds ("Hoskins II").1

Hoskins, a UK citizen working for an Alstom UK subsidiary's Paris office, previously prevailed at the Second Circuit in 2018 ("Hoskins I") on the grounds that DOJ could not bring FCPA charges against him on a theory of conspirator liability if he was outside the statutory definitions of persons who could be charged with a substantive offense.2 As Hoskins could not be charged as an accomplice or conspirator, DOJ alleged that he fell within the statute as an "agent" of a domestic concern3 (i.e., Alstom Power, Inc. ("API") - one of Alstom's U.S. subsidiaries and Hoskins's alleged co-conspirator)). Following the district court in applying the common law definition of agency to the word "agent" in the FCPA, a divided Second Circuit panel found that merely rendering support services (even if significant) does not constitute agency absent the common law requirement of control.

The Second Circuit's decision in Hoskins II (like Hoskins I) is likely to increase the challenges the government faces in bringing FCPA charges against foreign individuals and non-issuers allegedly involved in a bribery scheme abroad.4 Notably, the agency issue addressed in Hoskins II (and the conspiracy issue addressed in Hoskins I) are still subject to ongoing litigation in other circuits, including the Fifth Circuit's consideration of an appeal by Swiss banker Daisy Rafoi-Bleuler, who the government alleged acted as an agent of PDVSA and its U.S. subsidiary in connection with a bribery and money laundering scheme.5

Factual and Procedural Background

The underlying alleged bribery scheme occurred from 2002 to 2009, during which time Hoskins was employed by the UK subsidiary of Alstom, S.A. ("Alstom"), a multinational power and transportation company based in France. The alleged scheme - to bribe Indonesian officials who would in turn help API land a $118 million contract to build a power plant - was carried out by API, Alstom's U.S. subsidiary, and several individuals associated with Alstom, including two local consultants.6 Hoskins' specific role was allegedly to select the two consultants and...

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