United States v. Hoskins—Second Circuit Rejects DOJ’s Attempt to Expand the Extraterritorial Reach of the FCPA Through Conspiracy and Complicity Doctrines: U.S. Court of Appeals for the Second Circuit Holds that the Government May Not Employ Theories of Conspiracy or Complicity to Charge Foreign National with FCPA Violations Where the Defendant is Not Otherwise Covered by the Statute

Sullivan & Cromwell LLP - August 27, 2018

On August 24, 2018, in United States v. Hoskins, the United States Court of Appeals for the Second Circuit affirmed in part and reversed in part a district court decision dismissing portions of a count of conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”).  The Department of Justice (“DOJ”) alleged that Lawrence Hoskins, an employee of the U.K. subsidiary of power and transportation company Alstom S.A. (“Alstom”), directed and authorized corrupt payments by a U.S. subsidiary of Alstom (“Alstom U.S.”) to Indonesian officials.  The court affirmed the lower court’s ruling that Hoskins, a foreign national, could not be liable for conspiring to violate, or violating the FCPA, without a showing that he was acting as an employee, officer, director, or agent of Alstom U.S. when he engaged in the prohibited conduct, or that he took action in furtherance of the violation while in the United States.  In reaching this decision, the court relied on the text of the FCPA, Supreme Court and Second Circuit precedent regarding conspiracy theory liability, the FCPA’s legislative history and purpose, and the presumption against extraterritoriality.  The Second Circuit, however, reversed the portion of the lower court’s ruling that prohibited the government from attempting to establish that Hoskins was liable as an agent of Alstom U.S. for conspiring with foreign nationals who committed relevant acts while in the United States, concluding that, if the government could establish that Hoskins acted as an agent of Alstom U.S., neither the legislative intent behind the statute nor the presumption against extraterritoriality precluded prosecution of Hoskins for conspiring with foreign nationals to violate the FCPA, even if Hoskins never entered the U.S.