Melissa Klein Aguilar wrote a peice on Compliance Week about the decision in U.S. v. Kozeny decision that limits the local law defense under the Foreign Corrupt Practices Act: FCPA Decision Narrows Local-Law Defense.
The Kozeny decision makes clear that if the payment itself is illegal, the local-law defense can’t be used even if the common practice in that country is to forgive the offense; the transaction must be permitted under local law.
In the facts of the Kozeny case were unusual. Local Azerbaijani law the voluntary declaration of having committed bribery absolves the bribe-giver and his accomplices from criminal responsibility. The Kozeny court did not seem to think this was the same as the bribe being legal.
The judge also finds that mere economic coercion is not a defense. The Kozeny judge equates true extortion with a “payment made to an official to keep an oil rig from being dynamited.”
The article also points us to two law firm legal alerts:
- Fulbright & Jaworski Alert on FCPA Decision (October 2008)
- Willkie Farr & Gallagher Alert on FCPA Decision (Oct. 28, 2008)(.pdf)