§ 78dd-2. — Prohibited foreign trade practices by domestic concerns.
[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-2]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2B--SECURITIES EXCHANGES
Sec. 78dd-2. Prohibited foreign trade practices by domestic
concerns
(a) Prohibition
It shall be unlawful for any domestic concern, other than an issuer
which is subject to section 78dd-1 of this title, or for any officer,
director, employee, or agent of such domestic concern or any stockholder
thereof acting on behalf of such domestic concern, 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 domestic concern 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 domestic concern 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 domestic concern in obtaining or retaining
business for or with, or directing business to, any person.
(b) Exception for routine governmental action
Subsections (a) and (i) 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 (i) 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) Injunctive relief
(1) When it appears to the Attorney General that any domestic
concern to which this section applies, or officer, director, employee,
agent, or stockholder thereof, is engaged, or about to engage, in any
act or practice constituting a violation of subsection (a) or (i) of
this section, the Attorney General may, in his discretion, bring a civil
action in an appropriate district court of the United States to enjoin
such act or practice, and upon a proper showing, a permanent injunction
or a temporary restraining order shall be granted without bond.
(2) For the purpose of any civil investigation which, in the opinion
of the Attorney General, is necessary and proper to enforce this
section, the Attorney General or his designee are empowered to
administer oaths and affirmations, subpoena witnesses, take evidence,
and require the production of any books, papers, or other documents
which the Attorney General deems relevant or material to such
investigation. The attendance of witnesses and the production of
documentary evidence may be required from any place in the United
States, or any territory, possession, or commonwealth of the United
States, at any designated place of hearing.
(3) In case of contumacy by, or refusal to obey a subpoena issued
to, any person, the Attorney General may invoke the aid of any court of
the United States within the jurisdiction of which such investigation or
proceeding is carried on, or where such person resides or carries on
business, in requiring the attendance and testimony of witnesses and the
production of books, papers, or other documents. Any such court may
issue an order requiring such person to appear before the Attorney
General or his designee, there to produce records, if so ordered, or to
give testimony touching the matter under investigation. Any failure to
obey such order of the court may be punished by such court as a contempt
thereof. All process in any such case may be served in the judicial
district in which such person resides or may be found. The Attorney
General may make such rules relating to civil investigations as may be
necessary or appropriate to implement the provisions of this subsection.
(e) Guidelines by Attorney General
Not later than 6 months after August 23, 1988, the Attorney General,
after consultation with the Securities and Exchange 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 domestic concerns 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.
(f) 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 domestic concerns 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 a domestic concern 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 a domestic
concern 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 domestic concern, be made publicly
available, regardless of whether the Attorney General responds to such a
request or the domestic concern withdraws such request before receiving
a response.
(3) Any domestic concern 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.
(g) Penalties
(1)(A) Any domestic concern that is not a natural person and that
violates subsection (a) or (i) of this section shall be fined not more
than $2,000,000.
(B) Any domestic concern that is not a natural person and that
violates subsection (a) or (i) of this section shall be subject to a
civil penalty of not more than $10,000 imposed in an action brought by
the Attorney General.
(2)(A) Any natural person that is an officer, director, employee, or
agent of a domestic concern, or stockholder acting on behalf of such
domestic concern, who willfully violates subsection (a) or (i) of this
section shall be fined not more than $100,000 or imprisoned not more
than 5 years, or both.
(B) Any natural person that is an officer, director, employee, or
agent of a domestic concern, or stockholder acting on behalf of such
domestic concern, who violates subsection (a) or (i) of this section
shall be subject to a civil penalty of not more than $10,000 imposed in
an action brought by the Attorney General.
(3) Whenever a fine is imposed under paragraph (2) upon any officer,
director, employee, agent, or stockholder of a domestic concern, such
fine may not be paid, directly or indirectly, by such domestic concern.
(h) Definitions
For purposes of this section:
(1) The term ``domestic concern'' means--
(A) any individual who is a citizen, national, or resident
of the United States; and
(B) any corporation, partnership, association, joint-stock
company, business trust, unincorporated organization, or sole
proprietorship which has its principal place of business in the
United States, or which is organized under the laws of a State
of the United States or a territory, possession, or commonwealth
of the United States.
(2)(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.
(3)(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.
(4)(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
decision-making process to encourage a decision to award new
business to or continue business with a particular party.
(5) The term ``interstate commerce'' means trade, commerce,
transportation, or communication among the several States, or
between any foreign country and any State or between any State and
any place or ship outside thereof, and such term includes the
intrastate use of--
(A) a telephone or other interstate means of communication,
or
(B) any other interstate instrumentality.
(i) Alternative jurisdiction
(1) It shall also be unlawful for any United States person 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 United States
person 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.
(Pub. L. 95-213, title I, Sec. 104, Dec. 19, 1977, 91 Stat. 1496; Pub.
L. 100-418, title V, Sec. 5003(c), Aug. 23, 1988, 102 Stat. 1419; Pub.
L. 103-322, title XXXIII, Sec. 330005, Sept. 13, 1994, 108 Stat. 2142;
Pub. L. 105-366, Sec. 3, Nov. 10, 1998, 112 Stat. 3304.)
Codification
Section was enacted as part of Pub. L. 95-213, the Foreign Corrupt
Practices Act of 1977, and not as part of act June 6, 1934, ch. 404, 48
Stat. 881, the Securities Exchange Act of 1934, which comprises this
chapter.
Amendments
1998--Subsec. (a)(1)(A). Pub. L. 105-366, Sec. 3(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. 3(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. 3(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. 3(d)(2), substituted
``Subsections (a) and (i)'' for ``Subsection (a)''.
Subsec. (c). Pub. L. 105-366, Sec. 3(d)(3), substituted ``subsection
(a) or (i)'' for ``subsection (a)'' in introductory provisions.
Subsec. (d)(1). Pub. L. 105-366, Sec. 3(d)(4), substituted
``subsection (a) or (i)'' for ``subsection (a)''.
Subsec. (g)(1). Pub. L. 105-366, Sec. 3(b)(1), amended par. (1)
generally. Prior to amendment, par. (1) read as follows:
``(1)(A) Any domestic concern that violates subsection (a) of this
section shall be fined not more than $2,000,000.
``(B) Any domestic concern that violates subsection (a) of this
section shall be subject to a civil penalty of not more than $10,000
imposed in an action brought by the Attorney General.''
Subsec. (g)(2). Pub. L. 105-366, Sec. 3(b)(2), amended par. (2)
generally. Prior to amendment, par. (2) read as follows:
``(2)(A) Any officer or director of a domestic concern, or
stockholder acting on behalf of such domestic concern, who willfully
violates subsection (a) of this section shall be fined not more than
$100,000, or imprisoned not more than 5 years, or both.
``(B) Any employee or agent of a domestic concern who is a United
States citizen, national, or resident or is otherwise subject to the
jurisdiction of the United States (other than an officer, director, or
stockholder acting on behalf of such domestic concern), and who
willfully violates subsection (a) of this section, shall be fined not
more than $100,000, or imprisoned not more than 5 years, or both.
``(C) Any officer, director, employee, or agent of a domestic
concern, or stockholder acting on behalf of such domestic concern, who
violates subsection (a) of this section shall be subject to a civil
penalty of not more than $10,000 imposed in an action brought by the
Attorney General.''
Subsec. (h)(2). Pub. L. 105-366, Sec. 3(c), amended par. (2)
generally. Prior to amendment, par. (2) 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. (h)(4)(A). Pub. L. 105-366, Sec. 3(e), substituted ``The''
for ``For purposes of paragraph (1), the'' in introductory provisions.
Subsec. (i). Pub. L. 105-366, Sec. 3(d)(1), added subsec. (i).
1994--Subsec. (a)(3). Pub. L. 103-322 substituted ``domestic
concern'' for ``issuer'' in closing provisions.
1988--Pub. L. 100-418 substituted ``Prohibited foreign trade'' for
``Foreign corrupt'' in section catchline and amended text generally,
revising and restating as subsecs. (a) to (h) provisions of former
subsecs. (a) to (d).
Section Referred to in Other Sections
This section is referred to in section 78dd-3 of this title; title 7
section 12a; title 12 section 635; title 18 section 1956; title 22
sections 2197, 2778, 6301; title 26 sections 162, 952, 964.
