In the past, our FYI / לידיעתך articles focused on a single topic. For this edition, we share two topics that may be or become relevant in your work.
Specifying that a contract is governed by New York Law may not necessarily be all you think it is.
A Small Crack in the Extraterritorial Jurisdiction of the FCPA
A number of our readers may recall previous articles from us on the U.S. Foreign Corrupt Practices Act, and how the U.S. Department of Justice (the sole enforcement agency where U.S.-publicly traded securities are not involved) takes a near international approach to its jurisdiction. In a recently decided case from the United States Court of Appeals for the Second Circuit (U.S. v. Hoskins), the Second Circuit ruled that where a foreign national is not an agent, employee, officer, director or shareholder of an American issuer (meaning a publicly traded company) or U.S. concern (meaning a U.S. company whether or not publicly traded), the foreign national cannot be subject to the FCPA unless that person commits a crime within the territory of the United States. Before anyone feels too comfortable with this, keep in mind that this is the ruling of only one Circuit in the Court of Appeals and the Department of Justice could decide to appeal this ruling. Furthermore, prior enforcement actions have made it clear that the DOJ may not require physical presence in the United States to take the position that the bad act happened here. And the border between being an “agent” or not, may be a thin one. So while this may represent a small crack in the aggressive assertion of jurisdiction by of the DOJ; best practices still merits careful compliance for companies and their personnel with the FCPA and other anti-bribery laws.