What does “Willfully” mean under the FCPA

The Foreign Corrupt Practices Act (FCPA) is legislation intended to prevent American companies from bribing foreign officials to gain a competitive advantage.  Recently, the Department of Justice and the Securities Exchange Commission issued guidance to attempt to clarify the FCPA and set forth their enforcement priorities to enlighten white collar criminal attorneys and their clients what constitutes illegal bribery.  One of the issues addressed in this guidance is to attempt to clarify the meaning of the term “willfully” as used in the FCPA.

For an individual to be successfully prosecuted criminally under the Foreign Corrupt Practices Act (FCPA), they must be proven to have acted “willfully.”  The recent guidance on the FCPA issued by the Department of Justice and the Securities and Exchange Commission attempted to clarify what is meant by the term “willfully.”

While this “willful” requirement applies to individual employees, it is important for a companies general counsel to realize that proof that conduct was engaged in “willfully” is not required to establish corporate civil liability or even to support a criminal prosecution.  However, in all corporate prosecutions under the FCPA, whether civil or criminal, proof of corrupt intent on behalf of a corporate actor is required.

The guidance notes that the term “willfully” is not defined within the language of the FCPA.  However, as stated in the guidance, the term “willfully” has generally been interpreted by courts to indicate any act, which is committed voluntarily and purposefully with a bad purpose.  This has been held to require knowledge that the defendant was doing a “‘bad’ act under the general rules of law.” The Supreme Court of the United States stated in Bryan v. United States, “[a]s a general matter, when used in the criminal context, a ‘will­ful’ act is one undertaken with a ‘bad purpose.’ In other words, in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’”

However, despite this language from the United States Supreme Court, the guidance notes that both the Fifth and Second Circuit Courts of Appeals have found that the government does NOT have to prove the defendant was even aware of the FCPA in order to prosecute that defendant.  The only thing that must be proven is that the defendant generally knew what he was doing was unlawful.

Therefore, despite this recent guidance, it is still difficult to pinpoint what constitutes “willful” conduct under the FCPA considering both the language of the Supreme Court along with these holdings of the Fifth and Second Circuit.   This issue may be further litigated in the future.

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