FEPA and Foreign Bribery Demands: The Demand Matters Before Anyone Pays

A Foreign Extortion Prevention Act whistleblower can have evidence of a corrupt demand even when the company never paid. The law reaches foreign officials who demand or seek a bribe connected to obtaining or keeping business. If you know who asked, what benefit they wanted and which business decision they controlled, you may know the part of the transaction that never reached the company’s payment ledger.

What Does the Foreign Extortion Prevention Act Cover?

The Foreign Extortion Prevention Act addresses the official demanding or receiving the bribe. The Foreign Corrupt Practices Act addresses the person or business offering, promising, authorizing or paying it. Both sides of the exchange matter before money changes hands.

The law covers an official who corruptly asks for, takes or agrees to take something of value in exchange for using official power to help a business win or keep work. The Justice Department’s FEPA addendum describes direct and indirect dealings. An intermediary can carry the request between the official and the company.

The law reaches covered foreign officials and people selected to become foreign officials. Its definition also includes specified senior foreign political figures. For an insider, the useful detail is the person’s role and authority at the time of the request, alongside the contract, license or other business decision the request concerned.

The requested benefit can go to another person or a nongovernmental entity. A demand to benefit an official’s chosen recipient matters alongside a demand for a payment to the official personally. We look at who stood to benefit and what the official was expected to do in exchange.

Why the July 2024 Change Matters

Congress first enacted the Foreign Extortion Prevention Act on December 22, 2023, as an amendment to the existing federal bribery law. The Foreign Extortion Prevention Technical Corrections Act, enacted July 30, 2024, rewrote it in a separate part of federal law. The rewrite expressly covers people acting for the business and a demand involving an official’s representative in the United States.

The date of a demand belongs beside the message or agreement that records it. We connect that chronology to the law that applied.

FEPA and U.S. Jurisdiction Over a Foreign Official’s Bribe Demand

The Foreign Extortion Prevention Act’s U.S. jurisdiction depends on who was approached and how the exchange connects to the United States. It covers demands directed at companies with securities registered in the United States or a duty to file SEC reports, including foreign companies. It also covers demands directed at U.S. citizens, nationals and residents, and businesses organized under U.S. law or principally based here, including private companies.

The law includes officers, directors, employees, agents and stockholders acting for those businesses. The Justice Department’s addendum also identifies use of the mail or other interstate channels as part of the corrupt exchange. Who made the request, who received it and which entity they represented help explain that connection.

For demands directed at other people or businesses, the official, selected official or someone acting for that official must be in U.S. territory. The law also reaches demands made abroad within its coverage. An insider’s knowledge of where the request came from and who carried it can connect the demand to the United States.

The Company Records Behind a Bribery Demand

A demand becomes understandable when the request, the benefit and the business decision line up. In multinational business, the employee approving a payment, the intermediary receiving it, the ultimate beneficiary and the official controlling the decision can sit in different companies and countries.

The connection may run through an agreement, an investment approval or a license transfer. These are the relationships we examine with someone who knows the transaction:

An insider can connect documents that otherwise appear to concern separate transactions. The finance team may see a commission while the commercial team knows which official chose the recipient. The cases below show why that connection matters.

MTS and the Price of Staying in Business

The SEC’s findings concerning Mobile TeleSystems, known as MTS, show a demand tied to the company’s ability to keep operating in Uzbekistan. In its March 2019 administrative order, the SEC described those management discussions in these words:

The demand and its business consequence appeared together in management discussions. For a person who heard the request or handled the approval, that is the connection between a proposed expense and the official’s power over the business.

Telecommunications access also appeared in a transaction with another operator. The SEC found that Uzdunrobita agreed to pay Buztel for a frequency arrangement, with part of the money going to the official. Buztel would surrender its frequency rights, and the official, who controlled the telecommunications regulator, ensured that the regulator approved their reallocation. The commercial agreement and the regulatory decision were parts of the same exchange.

The SEC also described value moving through changes to an investment agreement. Its order says that, at the official’s request, MTS amended its arrangement with Swisdorn, removing MTS’s right to buy at a fixed price and improving Swisdorn’s right to sell. An estimate for MTS’s investment committee put the value of Swisdorn’s sale option at $44 million before the changes and at least $150 million afterward. The benefit sat inside the contract terms.

The SEC also found that MTS ignored an investigator’s report identifying Takilant’s nominal owner as a proxy for the official with no telecommunications background. That finding puts the ownership inquiry beside the transaction approval. We would want to understand who received that information and what happened to the proposed payment afterward.

Charities and sponsorship supplied another route. The SEC found that MTS paid charities supported by the official and a company connected to the official, expecting the payments to secure continued support for its business. The subsidiary recorded them as advertising and non-operating expenses. We see the absurdity in calling that advertising: the company was seeking the official’s support, while its accounts told a different story.

Embraer and the Official’s Chosen Intermediary

Under its 2016 criminal deferred prosecution agreement, Embraer admitted payments through an intermediary designated by a Mozambican state-airline official. The subsidiary’s commissions appeared as selling expenses in the consolidated accounts. The admitted facts also described reliance on incorporation papers and board records without meaningful checks on the intermediary’s services, and payments without proof of work.

That example connects the official choosing the recipient to the company recording a commission. An employee handling the engagement may know who introduced the intermediary. Someone in finance may know what supported the invoice. Together those facts explain the payment’s purpose much more clearly than the expense label alone.

MTS and Embraer were company cases under the Foreign Corrupt Practices Act. Before the Foreign Extortion Prevention Act, the Justice Department also prosecuted corrupt foreign officials through money laundering laws.

What an Ignored Warning Adds

The response to a warning can explain how a payment arrangement continued through the company’s controls. Fresenius Medical Care: A Case Study on the FCPA, published in the Journal of Forensic and Investigative Accounting in 2022, examined that problem across the company’s bribery schemes:

The study’s observation has a concrete counterpart in the SEC’s Fresenius order. The SEC found that compliance prohibited payments through a Serbian agent, but an executive approved payments through a transport vendor that then paid the doctors. For an insider, the replacement vendor and the earlier instruction belong in the same account of what happened. A changed payee can conceal continuity in the benefit.

Can a FEPA Whistleblower Receive a Reward?

A Foreign Extortion Prevention Act whistleblower may qualify for an award of up to 30% of the first $100 million in net proceeds forfeited under the Justice Department’s Corporate Whistleblower Awards Pilot Program. The terms revised July 30, 2026 expressly include company-related violations of the Foreign Extortion Prevention Act, the Foreign Corrupt Practices Act and money laundering laws.

The next award tier is up to 5% of net proceeds forfeited between that amount and $500 million. The pilot links an award to original information leading to a qualifying case with more than $1 million in net proceeds forfeited to the government. The company’s involvement, the information the whistleblower contributes and the money recovered are central to evaluating the opportunity.

The revised terms also changed how the pilot fits with other whistleblower award programs. We assess that overlap with foreign bribery whistleblower lawyers who understand both Justice Department and SEC awards.

Where the SEC Fits

The SEC can address a company’s Foreign Corrupt Practices Act and accounting violations through its own authority. The Foreign Extortion Prevention Act itself gives the SEC no enforcement authority and creates no civil remedy. Evidence about an official’s demand can nevertheless sit beside evidence of the company’s payments, inaccurate accounts or failed controls, as the MTS order illustrates.

The SEC whistleblower program provides eligible whistleblowers with 10% to 30% of qualifying collected monetary sanctions. The official’s demand and the company’s response therefore deserve examination together.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. That is a separate law: foreign bribery reporting follows agency enforcement and the applicable award programs, rather than a private qui tam case under the Foreign Corrupt Practices Act.

Can I Report If I Am Outside the United States?

Yes, the SEC receives information from overseas whistleblowers, and overseas residence does not itself prevent an SEC award. For a person working with a foreign subsidiary, intermediary or government customer, we connect their knowledge of the demand to the company’s U.S. relationship and the relevant award program.

If you have already raised the issue inside the company, we take that history into account. Questions about anonymity, your own involvement or records held abroad belong in a conversation with our whistleblower experts, where we can address your circumstances with foreign bribery whistleblower counsel.

When You Know What the Official Asked For

If you heard the demand, handled the intermediary or saw the request become an approved expense, speak with our whistleblower experts about what the official asked for. We work with you to connect the official’s request to the business decision and build the strongest case the evidence supports. We bring in foreign bribery whistleblower lawyers with experience in Justice Department and SEC awards and stay beside you throughout the process.