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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Multinational enforcement likely to increase
Publication | August 2015
On Thursday, August 13, Judge Janet Arterton of the United States District Court for the District of Connecticut ruled that a non-resident foreign national cannot be held criminally liable for conspiracy to violate the Foreign Corrupt Practices Act ("FCPA") unless that non-resident foreign national is an agent of a domestic concern.1 The ruling was issued in the ongoing criminal proceedings against Lawrence Hoskins, a former executive of Alstom S.A., a French holding company, in response to Mr. Hoskins's Motion to Dismiss Count One of the Third Superseding Indictment, as well as to the government's motion in limine to preclude Mr. Hoskins from arguing to the jury that the government must prove Mr. Hoskins was the agent of a domestic concern.2 In this indictment, the government charged Mr. Hoskins with conspiracy to violate the FCPA, directly violating the FCPA as an agent of a domestic concern, conspiracy to commit money laundering, and direct money laundering violations.3
Judge Arterton granted in part Mr. Hoskins' motion to dismiss and denied the government's motion in limine, holding that "[t]he Government may not argue . . . that Defendant could be liable for conspiracy even if he is not proved to [be] an agent of a domestic concern."4 Judge Arterton based her ruling on the long-standing Gebardi principle, which provides that where Congress excludes a class of people from liability under a statute, those individuals may not be made liable for violations of that statute through use of a conspiracy or aiding and abetting theory of liability.5 The three separate anti-bribery provisions of the FCPA prohibit three categories of individuals and entities from engaging in corrupt conduct.6 These categories are:
A domestic concern includes any individual who is a U.S. national and any organization with its principle place of business or jurisdiction of incorporation in the US.10
Judge Arterton agreed with Mr. Hoskins that, in light of the FCPA's language, Congress had not intended to reach non-resident foreign nationals who did not otherwise meet the above-listed criteria.11 In making this determination, the judge rejected the government's argument that the 1998 amendments—which were made to bring the United States into compliance with its treaty obligations under the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions— "expanded the jurisdictional reach of the FCPA to cover any person over whom U.S. courts have jurisdiction."12
Instead, the court found that the United States' obligations under that treaty were limited to outlawing bribery "committed in whole or in part in its territory" or "by its own nationals while abroad," and thus declined to find that Congress intended accomplice and conspiracy liability to expand the jurisdictional scope of the FCPA.13
The Hoskins decision is another milestone in what has been a series of recent court rulings limiting the breadth of the FCPA's application. Aside from clarifying the FCPA's jurisdictional parameters, Hoskins is significant because it rejects the DOJ's and the SEC's expansive interpretation of conspiracy and aiding and abetting liability under the FCPA (as set forth in the Resource Guide to the FCPA of 2012),14 and limits the permissible reach of their enforcement actions.
Key Takeaways:
1 Ruling on Defendant's Second Motion to Dismiss the Indictment, United States v. Lawrence Hoskins, No. 3:12cr238 (Aug. 13, 2015).
2 Id. at 1-2.
3 Third Superseding Indictment, United States v. Lawrence Hoskins, No. 3:12cr238 (Apr. 15, 2015).
4 Ruling on Defendant's Second Motion to Dismiss the Indictmentat 20.
5 Id. at 8; see also Gebardi v. United States, 287 U.S. 112 (1932).
6 15 U.S.C. § 78dd-1 through 78dd-3.
7 15 U.S.C. § 78dd-1.
8 15 U.S.C. § 78dd-2.
9 15 U.S.C. § 78dd-3.
10 15 U.S.C. § 78dd-2 (h)(1).
11 Ruling on Defendant's Second Motion to Dismiss the Indictment.
12 Id. at 19.
13 Id. at 19-20.
14 See Dept. of Justice and Sec. & Exch. Comm'n, A Resource Guide to the Foreign Corrupt Practices Act at 34 (November 2012), available at http://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf ("Individuals and companies, including foreign nationals and companies, may also be liable for conspiring to violate the FCPA—i.e., for agreeing to commit an FCPA violation—even if they are not, or could not be, independently
charged with a substantive FCPA violation.").
15 F.R.App.P. 4(b).
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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