On August 24, the United States Court of Appeals for the Second Circuit held that a non-resident, non-US national may not be held criminally liable for aiding and abetting or conspiring to violate the FCPA, unless he is an agent of an FCPA "issuer," an agent of an FCPA "domestic concern," or commits acts in furtherance of the scheme in the US. In United States v. Hoskins, the Second Circuit affirmed the district court's ruling that the government cannot use accomplice or conspiracy-related charges to extend liability under the FCPA beyond the explicit categories of persons identified in the statute. In other words, a person may not be guilty as an accomplice or a co-conspirator for an FCPA crime that he is incapable of committing as a principal.
The court's ruling is contrary to the historical position of the US DOJ and SEC, which have negotiated FCPA resolutions with companies who had zero US ties on the theory that the non-US company aided and abetted, or conspired with, a company that is an FCPA "issuer" or "domestic concern." It remains to be seen how Hoskins will affect the position of the DOJ and the SEC going forward.
Hoskins is potentially significant for aerospace and defense companies, which often have non-US subsidiaries that retain non-US third parties to assist in obtaining business from non-US governments. Under Hoskins, these third parties - if bribes are paid to non-US government officials - would likely not have FCPA criminal exposure, as they would not be agents of an FCPA "issuer" or "domestic concern." The third parties might be aiding and abetting, or conspiring with, the non-US subsidiary, but that conduct under Hoskins would not create FCPA criminal liability for the third party because the non-US subsidiary is likely neither a US "issuer" nor a US "domestic concern." On the other hand, the non-US subsidiary could have FCPA criminal exposure itself on the theory that it acted as an agent of an FCPA "issuer" or "domestic concern" if its parent falls into one of these categories. This means that companies should redouble efforts to ensure that their third parties are FCPA compliant, as they may no longer be able to depend on the long arm of US law to deter bribery by non-US third parties.