§ 78dd-1. — Prohibited foreign trade practices by issuers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC78dd-1]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78dd-1. Prohibited foreign trade practices by issuers
(a) Prohibition
It shall be unlawful for any issuer which has a class of securities
registered pursuant to section 78l of this title or which is required to
file reports under section 78o(d) of this title, or for any officer,
director, employee, or agent of such issuer or any stockholder thereof
acting on behalf of such issuer, to make use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay, or authorization of the payment of any
money, or offer, gift, promise to give, or authorization of the giving
of anything of value to--
(1) any foreign official for purposes of--
(A)(i) influencing any act or decision of such foreign
official in his official capacity, (ii) inducing such foreign
official to do or omit to do any act in violation of the lawful
duty of such official, or (iii) securing any improper advantage;
or
(B) inducing such foreign official to use his influence with
a foreign government or instrumentality thereof to affect or
influence any act or decision of such government or
instrumentality,
in order to assist such issuer in obtaining or retaining business
for or with, or directing business to, any person;
(2) any foreign political party or official thereof or any
candidate for foreign political office for purposes of--
(A)(i) influencing any act or decision of such party,
official, or candidate in its or his official capacity, (ii)
inducing such party, official, or candidate to do or omit to do
an act in violation of the lawful duty of such party, official,
or candidate, or (iii) securing any improper advantage; or
(B) inducing such party, official, or candidate to use its
or his influence with a foreign government or instrumentality
thereof to affect or influence any act or decision of such
government or instrumentality,
in order to assist such issuer in obtaining or retaining business
for or with, or directing business to, any person; or
(3) any person, while knowing that all or a portion of such
money or thing of value will be offered, given, or promised,
directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for foreign
political office, for purposes of--
(A)(i) influencing any act or decision of such foreign
official, political party, party official, or candidate in his
or its official capacity, (ii) inducing such foreign official,
political party, party official, or candidate to do or omit to
do any act in violation of the lawful duty of such foreign
official, political party, party official, or candidate, or
(iii) securing any improper advantage; or
(B) inducing such foreign official, political party, party
official, or candidate to use his or its influence with a
foreign government or instrumentality thereof to affect or
influence any act or decision of such government or
instrumentality,
in order to assist such issuer in obtaining or retaining business
for or with, or directing business to, any person.
(b) Exception for routine governmental action
Subsections (a) and (g) of this section shall not apply to any
facilitating or expediting payment to a foreign official, political
party, or party official the purpose of which is to expedite or to
secure the performance of a routine governmental action by a foreign
official, political party, or party official.
(c) Affirmative defenses
It shall be an affirmative defense to actions under subsection (a)
or (g) of this section that--
(1) the payment, gift, offer, or promise of anything of value
that was made, was lawful under the written laws and regulations of
the foreign official's, political party's, party official's, or
candidate's country; or
(2) the payment, gift, offer, or promise of anything of value
that was made, was a reasonable and bona fide expenditure, such as
travel and lodging expenses, incurred by or on behalf of a foreign
official, party, party official, or candidate and was directly
related to--
(A) the promotion, demonstration, or explanation of products
or services; or
(B) the execution or performance of a contract with a
foreign government or agency thereof.
(d) Guidelines by Attorney General
Not later than one year after August 23, 1988, the Attorney General,
after consultation with the Commission, the Secretary of Commerce, the
United States Trade Representative, the Secretary of State, and the
Secretary of the Treasury, and after obtaining the views of all
interested persons through public notice and comment procedures, shall
determine to what extent compliance with this section would be enhanced
and the business community would be assisted by further clarification of
the preceding provisions of this section and may, based on such
determination and to the extent necessary and appropriate, issue--
(1) guidelines describing specific types of conduct, associated
with common types of export sales arrangements and business
contracts, which for purposes of the Department of Justice's present
enforcement policy, the Attorney General determines would be in
conformance with the preceding provisions of this section; and
(2) general precautionary procedures which issuers may use on a
voluntary basis to conform their conduct to the Department of
Justice's present enforcement policy regarding the preceding
provisions of this section.
The Attorney General shall issue the guidelines and procedures referred
to in the preceding sentence in accordance with the provisions of
subchapter II of chapter 5 of title 5 and those guidelines and
procedures shall be subject to the provisions of chapter 7 of that
title.
(e) Opinions of Attorney General
(1) The Attorney General, after consultation with appropriate
departments and agencies of the United States and after obtaining the
views of all interested persons through public notice and comment
procedures, shall establish a procedure to provide responses to specific
inquiries by issuers concerning conformance of their conduct with the
Department of Justice's present enforcement policy regarding the
preceding provisions of this section. The Attorney General shall, within
30 days after receiving such a request, issue an opinion in response to
that request. The opinion shall state whether or not certain specified
prospective conduct would, for purposes of the Department of Justice's
present enforcement policy, violate the preceding provisions of this
section. Additional requests for opinions may be filed with the Attorney
General regarding other specified prospective conduct that is beyond the
scope of conduct specified in previous requests. In any action brought
under the applicable provisions of this section, there shall be a
rebuttable presumption that conduct, which is specified in a request by
an issuer and for which the Attorney General has issued an opinion that
such conduct is in conformity with the Department of Justice's present
enforcement policy, is in compliance with the preceding provisions of
this section. Such a presumption may be rebutted by a preponderance of
the evidence. In considering the presumption for purposes of this
paragraph, a court shall weigh all relevant factors, including but not
limited to whether the information submitted to the Attorney General was
accurate and complete and whether it was within the scope of the conduct
specified in any request received by the Attorney General. The Attorney
General shall establish the procedure required by this paragraph in
accordance with the provisions of subchapter II of chapter 5 of title 5
and that procedure shall be subject to the provisions of chapter 7 of
that title.
(2) Any document or other material which is provided to, received
by, or prepared in the Department of Justice or any other department or
agency of the United States in connection with a request by an issuer
under the procedure established under paragraph (1), shall be exempt
from disclosure under section 552 of title 5 and shall not, except with
the consent of the issuer, be made publicly available, regardless of
whether the Attorney General responds to such a request or the issuer
withdraws such request before receiving a response.
(3) Any issuer who has made a request to the Attorney General under
paragraph (1) may withdraw such request prior to the time the Attorney
General issues an opinion in response to such request. Any request so
withdrawn shall have no force or effect.
(4) The Attorney General shall, to the maximum extent practicable,
provide timely guidance concerning the Department of Justice's present
enforcement policy with respect to the preceding provisions of this
section to potential exporters and small businesses that are unable to
obtain specialized counsel on issues pertaining to such provisions. Such
guidance shall be limited to responses to requests under paragraph (1)
concerning conformity of specified prospective conduct with the
Department of Justice's present enforcement policy regarding the
preceding provisions of this section and general explanations of
compliance responsibilities and of potential liabilities under the
preceding provisions of this section.
(f) Definitions
For purposes of this section:
(1)(A) 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 organization,
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 organization.
(B) For purposes of subparagraph (A), the term ``public
international organization'' means--
(i) an organization that is designated by Executive order
pursuant to section 288 of title 22; or
(ii) any other international organization that is designated
by the President by Executive order for the purposes of this
section, effective as of the date of publication of such order
in the Federal Register.
(2)(A) A person's state of mind is ``knowing'' with respect to
conduct, a circumstance, or a result if--
(i) such person is aware that such person is engaging in
such conduct, that such circumstance exists, or that such result
is substantially certain to occur; or
(ii) such person has a firm belief that such circumstance
exists or that such result is substantially certain to occur.
(B) When knowledge of the existence of a particular circumstance
is required for an offense, such knowledge is established if a
person is aware of a high probability of the existence of such
circumstance, unless the person actually believes that such
circumstance does not exist.
(3)(A) The term ``routine governmental action'' means only an
action which is ordinarily and commonly performed by a foreign
official in--
(i) obtaining permits, licenses, or other official documents
to qualify a person to do business in a foreign country;
(ii) processing governmental papers, such as visas and work
orders;
(iii) providing police protection, mail pick-up and
delivery, or scheduling inspections associated with contract
performance or inspections related to transit of goods across
country;
(iv) providing phone service, power and water supply,
loading and unloading cargo, or protecting perishable products
or commodities from deterioration; or
(v) actions of a similar nature.
(B) The term ``routine governmental action'' does not include
any decision by a foreign official whether, or on what terms, to
award new business to or to continue business with a particular
party, or any action taken by a foreign official involved in the
decisionmaking process to encourage a decision to award new business
to or continue business with a particular party.
(g) Alternative jurisdiction
(1) It shall also be unlawful for any issuer organized under the
laws of the United States, or a State, territory, possession, or
commonwealth of the United States or a political subdivision thereof and
which has a class of securities registered pursuant to section 78l of
this title or which is required to file reports under section 78o(d) of
this title, or for any United States person that is an officer,
director, employee, or agent of such issuer or a stockholder thereof
acting on behalf of such issuer, to corruptly do any act outside the
United States in furtherance of an offer, payment, promise to pay, or
authorization of the payment of any money, or offer, gift, promise to
give, or authorization of the giving of anything of value to any of the
persons or entities set forth in paragraphs (1), (2), and (3) of
subsection (a) of this section for the purposes set forth therein,
irrespective of whether such issuer or such officer, director, employee,
agent, or stockholder makes use of the mails or any means or
instrumentality of interstate commerce in furtherance of such offer,
gift, payment, promise, or authorization.
(2) As used in this subsection, the term ``United States person''
means a national of the United States (as defined in section 1101 of
title 8) or any corporation, partnership, association, joint-stock
company, business trust, unincorporated organization, or sole
proprietorship organized under the laws of the United States or any
State, territory, possession, or commonwealth of the United States, or
any political subdivision thereof.
(June 6, 1934, ch. 404, title I, Sec. 30A, as added Pub. L. 95-213,
title I, Sec. 103(a), Dec. 19, 1977, 91 Stat. 1495; amended Pub. L. 100-
418, title V, Sec. 5003(a), Aug. 23, 1988, 102 Stat. 1415; Pub. L. 105-
366, Sec. 2(a)-(c), Nov. 10, 1998, 112 Stat. 3302, 3303.)
Amendments
1998--Subsec. (a)(1)(A). Pub. L. 105-366, Sec. 2(a)(1), amended
subpar. (A) generally. Prior to amendment, subpar. (A) read as follows:
``(A)(i) influencing any act or decision of such foreign official in
his official capacity, or (ii) inducing such foreign official to do or
omit to do any act in violation of the lawful duty of such official,
or''.
Subsec. (a)(2)(A). Pub. L. 105-366, Sec. 2(a)(2), amended subpar.
(A) generally. Prior to amendment, subpar. (A) read as follows:
``(A)(i) influencing any act or decision of such party, official, or
candidate in its or his official capacity, or (ii) inducing such party,
official, or candidate to do or omit to do an act in violation of the
lawful duty of such party, official, or candidate,''.
Subsec. (a)(3)(A). Pub. L. 105-366, Sec. 2(a)(3), amended subpar.
(A) generally. Prior to amendment, subpar. (A) read as follows:
``(A)(i) influencing any act or decision of such foreign official,
political party, party official, or candidate in his or its official
capacity, or (ii) inducing such foreign official, political party, party
official, or candidate to do or omit to do any act in violation of the
lawful duty of such foreign official, political party, party official,
or candidate, or''.
Subsec. (b). Pub. L. 105-366, Sec. 2(c)(2), substituted
``Subsections (a) and (g)'' for ``Subsection (a)''.
Subsec. (c). Pub. L. 105-366, Sec. 2(c)(3), substituted ``subsection
(a) or (g)'' for ``subsection (a)''.
Subsec. (f)(1). Pub. L. 105-366, Sec. 2(b), amended par. (1)
generally. Prior to amendment, par. (1) read as follows: ``The term
`foreign official' means any officer or employee of a foreign government
or any department, agency, or instrumentality thereof, or any person
acting in an official capacity for or on behalf of any such government
or department, agency, or instrumentality.''
Subsec. (g). Pub. L. 105-366, Sec. 2(c)(1), added subsec. (g).
1988--Pub. L. 100-418 substituted ``Prohibited foreign trade'' for
``Foreign corrupt'' in section catchline and amended text generally,
revising and restating provisions of subsec. (a) relating to
prohibitions, adding subsecs. (b) to (e), and redesignating provisions
of subsec. (b) relating to definitions as subsec. (f) and amending those
provisions generally.
Treatment of International Organizations Providing Commercial
Communications Services
Pub. L. 105-366, Sec. 5, Nov. 10, 1998, 112 Stat. 3309, provided
that:
``(a) Definition.--For purposes of this section:
``(1) International organization providing commercial
communications services.--The term `international organization
providing commercial communications services' means--
``(A) the International Telecommunications Satellite
Organization established pursuant to the Agreement Relating to
the International Telecommunications Satellite Organization; and
``(B) the International Mobile Satellite Organization
established pursuant to the Convention on the International
Maritime Satellite Organization.
``(2) Pro-competitive privatization.--The term `pro-competitive
privatization' means a privatization that the President determines
to be consistent with the United States policy of obtaining full and
open competition to such organizations (or their successors), and
nondiscriminatory market access, in the provision of satellite
services.
``(b) Treatment as Public International Organizations.--
``(1) Treatment.--An international organization providing
commercial communications services shall be treated as a public
international organization for purposes of section 30A of the
Securities Exchange Act of 1934 (15 U.S.C. 78dd-1) and sections 104
and 104A of the Foreign Corrupt Practices Act of 1977 (15 U.S.C.
78dd-2 [and 78dd-3]) until such time as the President certifies to
the Committee on Commerce [now Committee on Energy and Commerce] of
the House of Representatives and the Committees on Banking, Housing
and Urban Affairs and Commerce, Science, and Transportation that
such international organization providing commercial communications
services has achieved a pro-competitive privatization.
``(2) Limitation on effect of treatment.--The requirement for a
certification under paragraph (1), and any certification made under
such paragraph, shall not be construed to affect the administration
by the Federal Communications Commission of the Communications Act
of 1934 [47 U.S.C. 151 et seq.] in authorizing the provision of
services to, from, or within the United States over space segment of
the international satellite organizations, or the privatized
affiliates or successors thereof.
``(c) Extension of Legal Process.--
``(1) In general.--Except as required by international
agreements to which the United States is a party, an international
organization providing commercial communications services, its
officials and employees, and its records shall not be accorded
immunity from suit or legal process for any act or omission taken in
connection with such organization's capacity as a provider, directly
or indirectly, of commercial telecommunications services to, from,
or within the United States.
``(2) No effect on personal liability.--Paragraph (1) shall not
affect any immunity from personal liability of any individual who is
an official or employee of an international organization providing
commercial communications services.
``(3) Effective date.--This subsection shall take effect on May
1, 1999.
``(d) Elimination or Limitation of Exceptions.--
``(1) Action required.--The President shall, in a manner that is
consistent with requirements in international agreements to which
the United States is a party, expeditiously take all appropriate
actions necessary to eliminate or to reduce substantially all
privileges and immunities that are accorded to an international
organization described in subparagraph (A) or (B) of subsection
(a)(1), its officials, its employees, or its records, and that are
not eliminated pursuant to subsection (c).
``(2) Designation of agreements.--The President shall designate
which agreements constitute international agreements to which the
United States is a party for purposes of this section.
``(e) Preservation of Law Enforcement and Intelligence Functions.--
Nothing in subsection (c) or (d) of this section shall affect any
immunity from suit or legal process of an international organization
providing commercial communications services, or the privatized
affiliates or successors thereof, for acts or omissions--
``(1) under chapter 119, 121, 206, or 601 of title 18, United
States Code, the Foreign Intelligence Surveillance Act of 1978 (50
U.S.C. 1801 et seq.), section 514 of the Comprehensive Drug Abuse
Prevention and Control Act of 1970 (21 U.S.C. 884), or Rule 104,
501, or 608 of the Federal Rules of Evidence [28 App. U.S.C.];
``(2) under similar State laws providing protection to service
providers cooperating with law enforcement agencies pursuant to
State electronic surveillance or evidence laws, rules, regulations,
or procedures; or
``(3) pursuant to a court order.
``(f) Rules of Construction.--
``(1) Negotiations.--Nothing in this section shall affect the
President's existing constitutional authority regarding the time,
scope, and objectives of international negotiations.
``(2) Privatization.--Nothing in this section shall be construed
as legislative authorization for the privatization of INTELSAT or
Inmarsat, nor to increase the President's authority with respect to
negotiations concerning such privatization.''
[Memorandum of President of the United States, Nov. 16, 1998, 63
F.R. 65997, delegated to Secretary of State functions and authorities
vested in the President by section 5(d)(2) of Pub. L. 105-366, set out
above.]
Enforcement and Monitoring
Pub. L. 105-366, Sec. 6, Nov. 10, 1998, 112 Stat. 3311, provided
that:
``(a) Reports Required.--Not later than July 1 of 1999 and each of
the 5 succeeding years, the Secretary of Commerce shall submit to the
House of Representatives and the Senate a report that contains the
following information with respect to implementation of the Convention:
``(1) Ratification.--A list of the countries that have ratified
the Convention, the dates of ratification by such countries, and the
entry into force for each such country.
``(2) Domestic legislation.--A description of domestic laws
enacted by each party to the Convention that implement commitments
under the Convention, and assessment of the compatibility of such
laws with the Convention.
``(3) Enforcement.--As assessment of the measures taken by each
party to the Convention during the previous year to fulfill its
obligations under the Convention and achieve its object and purpose
including--
``(A) an assessment of the enforcement of the domestic laws
described in paragraph (2);
``(B) an assessment of the efforts by each such party to
promote public awareness of such domestic laws and the
achievement of such object and purpose; and
``(C) an assessment of the effectiveness, transparency, and
viability of the monitoring process for the Convention,
including its inclusion of input from the private sector and
nongovernmental organizations.
``(4) Laws prohibiting tax deduction of bribes.--An explanation
of the domestic laws enacted by each party to the Convention that
would prohibit the deduction of bribes in the computation of
domestic taxes.
``(5) New signatories.--A description of efforts to expand
international participation in the Convention by adding new
signatories to the Convention and by assuring that all countries
which are or become members of the Organization for Economic
Cooperation and Development are also parties to the Convention.
``(6) Subsequent efforts.--An assessment of the status of
efforts to strengthen the Convention by extending the prohibitions
contained in the Convention to cover bribes to political parties,
party officials, and candidates for political office.
``(7) Advantages.--Advantages, in terms of immunities, market
access, or otherwise, in the countries or regions served by the
organizations described in section 5(a) [set out as a note above],
the reason for such advantages, and an assessment of progress toward
fulfilling the policy described in that section.
``(8) Bribery and transparency.--An assessment of anti-bribery
programs and transparency with respect to each of the international
organizations covered by this Act [enacting section 78dd-3 of this
title, amending this section and sections 78dd-2 and 78ff of this
title, and enacting provisions set out as notes under this section].
``(9) Private sector review.--A description of the steps taken
to ensure full involvement of United States private sector
participants and representatives of nongovernmental organizations in
the monitoring and implementation of the Convention.
``(10) Additional information.--In consultation with the private
sector participants and representatives of nongovernmental
organizations described in paragraph (9), a list of additional means
for enlarging the scope of the Convention and otherwise increasing
its effectiveness. Such additional means shall include, but not be
limited to, improved recordkeeping provisions and the desirability
of expanding the applicability of the Convention to additional
individuals and organizations and the impact on United States
business of section 30A of the Securities Exchange Act of 1934 [15
U.S.C. 78dd-1] and sections 104 and 104A of the Foreign Corrupt
Practices Act of 1977 [15 U.S.C. 78dd-2, 78dd-3].
``(b) Definition.--For purposes of this section, the term
`Convention' means the Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions adopted on November 21,
1997, and signed on December 17, 1997, by the United States and 32 other
nations.''
International Agreements Concerning Acts Prohibited With Respect to
Issuers and Domestic Concerns; Report to Congress
Section 5003(d) of Pub. L. 100-418 provided that:
``(1) Negotiations.--It is the sense of the Congress that the
President should pursue the negotiation of an international agreement,
among the members of the Organization of Economic Cooperation and
Development, to govern persons from those countries concerning acts
prohibited with respect to issuers and domestic concerns by the
amendments made by this section [amending sections 78dd-1, 78dd-2, and
78ff of this title]. Such international agreement should include a
process by which problems and conflicts associated with such acts could
be resolved.
``(2) Report to congress.--(A) Within 1 year after the date of the
enactment of this Act [Aug. 23, 1988], the President shall submit to the
Congress a report on--
``(i) the progress of the negotiations referred to in paragraph
(1),[;]
``(ii) those steps which the executive branch and the Congress
should consider taking in the event that these negotiations do not
successfully eliminate any competitive disadvantage of United States
businesses that results when persons from other countries commit the
acts described in paragraph (1); and
``(iii) possible actions that could be taken to promote
cooperation by other countries in international efforts to prevent
bribery of foreign officials, candidates, or parties in third
countries.
``(B) The President shall include in the report submitted under
subparagraph (A)--
``(i) any legislative recommendations necessary to give the
President the authority to take appropriate action to carry out
clauses (ii) and (iii) of subparagraph (A);
``(ii) an analysis of the potential effect on the interests of
the United States, including United States national security, when
persons from other countries commit the acts described in paragraph
(1); and
``(iii) an assessment of the current and future role of private
initiatives in curtailing such acts.''
[For delegation of functions of the President under section
5003(d)(1) of Pub. L. 100-418 to the Secretary of State, see section 3-
101 of Ex. Ord. No. 12661, Dec. 27, 1988, 54 F.R. 779, set out as a note
under section 2901 of Title 19, Customs Duties.]
Ex. Ord. No. 13259. Designation of Public International Organizations
for Purposes of the Securities Exchange Act of 1934 and the Foreign
Corrupt Practices Act of 1977
Ex. Ord. No. 13259, Mar. 19, 2002, 67 F.R. 13239, provided:
By the authority vested in me as President by the Constitution and
the laws of the United States of America, including section
30A(f)(1)(B)(ii) of the Securities Exchange Act of 1934 (15 U.S.C. 78dd-
1(f)(1)(B)(ii)) and sections 104(h)(2)(B)(ii) and 104A(f)(2)(B)(ii) of
the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-
2(h)(2)(B)(ii), 78dd-3(f)(2)(B)(ii)), I hereby designate as ``public
international organizations'' for the purposes of application of section
30A of the Securities Exchange Act of 1934 and sections 104 and 104A of
the Foreign Corrupt Practices Act of 1977:
(a) The European Union, including: the European Communities (the
European Community, the European Coal & Steel Community, and the
European Atomic Energy Community); institutions of the European Union,
such as the European Commission, the Council of the European Union, the
European Parliament, the European Court of Justice, the European Court
of Auditors, the Economic and Social Committee, the Committee of the
Regions, the European Central Bank, and the European Investment Bank;
and any departments, agencies, and instrumentalities thereof; and
(b) The European Police Office (Europol), including any departments,
agencies, and instrumentalities thereof.
Designation in this Executive Order is intended solely to further
the purposes of the statutes mentioned above and is not determinative of
whether an entity is a public international organization for the purpose
of other statutes or regulations.
George W. Bush.
Section Referred to in Other Sections
This section is referred to in sections 78dd-2, 78dd-3, 78ff of this
title; title 7 section 12a; title 18 section 1956; title 22 sections
2197, 2778; title 26 sections 162, 952, 964.
