U.S. Looks to Foreign Public Officials in Fight Against Corruption (FEPA Act)

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On 21 January 2009, Barack Obama began his term as President of the United States with a speech in which he pledged that his term would be governed by transparency, participation and collaboration. These three pillars would define the open government  model that has permeated public policies around the world ever since.

Many of the actions, movements or decisions that are taken in one part of the world have their influence on the rest, especially if the one who makes them is a power like the United States.

Thus, in the field of the fight against corruption, we saw how during the 70s the succession of several corruption cases in the United States led the Securities and Exchange Commission (the equivalent in our country to the CNMV) to carry out an investigation that revealed that more than 400 companies had paid millions of dollars in bribes to public officials.

The direct consequence of this investigation was that in 1977 the U.S. government passed the Foreign Corrupt Practices Act (FCPA), which became one of the main tools in the fight against corruption and is considered the “mother” law of compliance. From the point of view of its application, the FCPA attacked corruption from the perspective of active bribery, that is, from who offers the bribe.

It took until December 14, 2023 for the U.S. Congress to approve the Foreign Extortion Prevention Act (FEPA), which fills the loophole left by the FCPA by regulating passive bribery, i.e., the solicitation of bribes by a foreign public official.

Thus, while the FCPA applies to individuals and companies that pay or agree to pay bribes to foreign officials in exchange for business; FEPA makes it a crime for a foreign government official to demand, receive, or agree to receive a bribe from a U.S. company or individual. And it’s not just cash payments that are collected as bribes, “anything of value” is also included.

Foreign officials who solicit or accept bribes from U.S. entities could face up to $250,000 in fines and up to 15 years in prison.

The rule applies in addition to foreign government officials, to the “high-ranking political figure” that includes senior officials of political parties and senior executives of companies owned by the foreign government.

For the first time, and this is one of the novelties of the FEPA, the criminal liability of foreign public officials is included, which means that this rule has extraterritorial scope, although it remains to be seen what fit extradition agreements or power relations between governments have here.

The approval of the FEPA is part of the Biden Administration’s policy of fighting corruption as a key element of U.S. national security, positioning this country as one of the most advanced in the fight against corruption as it aims to eradicate foreign corruption at its source.

In this framework, the Biden Administration also approved the so-called 2021 Strategy to Counter Corruption, which together with FEPA provides the Department of Justice with new legal tools that allow it to criminally prosecute corrupt foreign officials who often escape justice in their countries of origin.

The FEPA has been approved as part of the National Defense Authorization Act for the year 2024, which in our country would be equivalent to the accompanying law, and had the support of both Republicans and Democrats, which shows how all American political parties join forces in the fight against corruption.

In the same way that the passage of the FCPA led to the birth of compliance and a greater awareness of the importance of the fight against corruption, it is expected that this new FEPA will also be a boost towards greater levels of ethics and integrity around the world.

Amalia López Acera

Head of institutional relations, communication and participation unit of the AVAF

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Questions and Answers for Professional of the Law 2/2023. Vol. I.

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Coordinated by Juan Vega Felgueroso, Lawyer of the Valencian Anti-Fraud Agency Law 2/2023, which regulates the protection of persons who report regulatory and anti-corruption breaches, has established a series of obligations and original investigation procedures that were previously unknown in our legal system. These novelties and the absence of normative and doctrinal references give rise to numerous doubts in the application of this Law by legal operators, a circumstance that advises the exposition and systematization of those aspects that offer greater doubts to these professionals in a series such as the one that begins today. The questions and answers for professionals that will be offered in this set of articles are a compilation of the doubts that are most frequently raised by those responsible for Information Systems, as well as by Lawyers of Public Administrations or by Lawyers in free and independent practice or, in short, by all legal experts. These questions and answers, without prejudice to their possible academic interest and for the public, are therefore eminently professional in nature, and they avoid historical explanations and extensive doctrinal debates to systematically and concisely establish the solutions to the gaps that arise from Law 2/2023. The series of questions, which will try to follow a homogeneity, begin in this first chapter with three topics of obvious importance for those responsible for the systems: First, the particularities of the expiry in the procedure of Law 2/2023 will be analyzed, which will be presented by Miguel Ángel Carbajo Domingo, Contentious-Administrative Magistrate, by answering the following questions: What is the deadline for fully processing the investigation file of Law 2/2023? Can this deadline be extended in order to fully process the investigation file? What happens if the investigation has not been initiated within three months of the complaint being made? What happens if the investigation proceedings had already been initiated within 3 months, but the procedure has not been completed within that period? Secondly, Pablo Rodríguez Ramallal, head of contracting and purchasing in a public company of the City of Gijón and lawyer of the ICAM expert in COMPLIANCE, will shed light on the new evidence of the interview with the affected party, an issue with which the legislator comes to include the principles of the Criminal Law, orality and concentration, in the administrative procedures of Law 2/2023, through the following issues: Is the new test of the interview with the affected party contemplated in all the investigation procedures of Law 2/2023? Is it imperative in all procedures to conduct an interview with the person concerned? What is the consequence for the investigation procedure if the person concerned is not interviewed? Finally, Telma Vega Felgueroso, Labour and Social Security Inspector in Barcelona, will respond to the problem regarding the scope of complaints in the field of labour law in Law 2/2023, and this by offering answers to the following questions: Should complaints of serious or very serious infringements with economic damage to Social Security be processed? Should complaints of minor infractions received through labour law reporting channels be processed in accordance with Law 2/2023? Do all complaints that are made in the field of labour law give rise to the protection of the complainant? Without further ado, here are these first 10 questions and answers for Law 2/2023 professionals. The expiry date in Law 2/2023. MIGUEL ÁNGEL CARBAJO DOMINGO. Magistrate of the Contentious Court 3 of Oviedo. Law 2/2023, due to the sensitivity and transcendence of the matters it deals with, has chosen to establish a rigid expiry system that must be taken into consideration by those responsible for information systems, both public sector entities (City Councils, Autonomous Communities, General State Administration, Universities, etc.), as well as by the Independent Authority for the Protection of Whistleblowers (AAI) or, where appropriate, the corresponding regional authorities or bodies. 1.  What is the deadline for the full processing of the investigation file? The law establishes that, both in the regulation of the information management procedure of the City Councils, Autonomous Communities, AGEs, Universities, etc. (art. 9) and, where appropriate, in the procedure regulated for the AAI or regional authorities (art. 20), the term for the investigation file will be fully processed within 3 months from the receipt of the complaint, and in those cases in which the informant is not acknowledged (think of voice messaging systems or through postal mail) the period of three months will be counted from the period of 7 days from the date the complaint was made. 2.  Can the deadline for the full processing of the investigation file be extended? In the case of information management procedures of the City Councils, Autonomous Communities, AGEs, Universities, etc., it is possible (art.9), but exclusively for another three additional months, and the reason for such extension must be justified and may only be based on the complexity of the investigation. On the other hand, there is no legal provision for an extension of the 3-month period for the AAI or regional authorities, which must in any case resolve the investigation procedures within 3 months (art.20). 3.  What happens if the investigation has not been initiated within three months of the complaint being made? In this case, an investigation procedure can no longer be initiated in any case, and this is because there is a mandatory rule, the one contemplated in article 32.4 of Law 2/2023, which requires the suppression of complaints received that have not been processed within 3 months, and this both for the information received by the City Councils,  Autonomous Communities, AGEs, Universities, etc., as the case may be for those received by the AAI or regional authorities. 4.  What happens if the investigation proceedings had already been initiated within 3 months, but the procedure has not been completed within that period? In this case, contrary to the answer to question 3, if the investigation proceedings have been initiated within the 3-month period, but have not been resolved within that period of time, the file will expire and must be declared…

12 Tools for Developing a Code of Ethics

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The approval of a code of ethics is one of the essential preventive measures of the well-known “anti-fraud cycle” and also an obligation imposed by Law 1/2022, of 13 April, on Transparency and Good Governance of the Autonomous Community on all public administrations.

Within the framework of an agreement between the Generalitat Valenciana, the Provincial Councils, the Valencian Federation of Municipalities and Provinces, the University of Valencia and this Agency, on March 12, 2024, I gave the presentation “How to develop a code of ethics so that it is a true framework of public integrity”. And the truth is that few are, limiting themselves to being a “copy-paste” of the principles and duties already regulated and imposed by the regulations or the result of an assignment to private entities that ends with their delivery, without worrying about their operation.

I present here the document “12 tools to develop a code of ethics”[1] and I invite you to use it in your “homes” to develop your own code of ethics using this “toolkit” with  references, examples and guidelines to ensure that every public servant exercises the position or performs his or her functions without deviating from the general interest:

1.– Legal references and key concepts of the code: count on our Code of Integrity of the Valencian Community[2], which summarizes and systematizes in a general and specific way (by areas of practice) the aspects related to integrity.

2.– Support to establish specific reinforcement mechanisms in the areas of practice of municipal competence: consult our Manual “The exercise of public office with integrity” [3]to make use of keys, precautions and useful procedures for its design, and the models attached to our AVAF Guide “The Public Integrity Plan: roadmap and facilitating annexes”,  among others.

3.- Limits inherent to the nature of the code as an internal instrument of self-regulation, without being able to innovate sanctions, reserved to the Law.

4.- On the recipients of the code: both senior officials and public employees of any kind, with extension of provisions for contractors and other recipients of public funds. This is the case of our Code, approved by Director’s Resolution No. 82 of 10/02/2022.

5.- Guidelines for activating the participatory and public process of drafting the code that involves all the recipients of the code and best practices on the involvement of governing bodies.

Examples of principles and values for consideration by each institution, with additional materials and references.

7.– The gift policy: general rule of non-acceptance, examples of courtesy uses and financial limits, forbidden gifts, record-keeping models, return policy, recourse to the OECD “GIFT” list.

8.- Elements of the code to detect, prevent and address risks contrary to integrity such as information leaks, conflicts of interest and lack of planning: regulations, examples of procedures, orientation questionnaire for their detection, practical situations of conflict of interest and irregularities, as well as mechanisms to be applied in the code and its extension to third parties (“two don’t argue if one doesn’t want to”). Possible use of the AVAF Visual Didactic Manual “Conflicts of Interest in the Key of Public Integrity”.

9.- Responsibilities for possible irregularities based on participation in decision-making processes. Guidelines and reference to the Code of Integrity cited above.

10.- Necessary provision for training in the code: the use of the AVAF’s YouTube channel.

11.- The ethics committee as an advisory body and receiver of complaints for non-compliance with the code. Examples of its functions and the regulation of the mailbox.

12.- The code as a living instrument: the need to monitor and update it to ensure its application. It’s not enough to “approve it and put it in the drawer.”

From the AVAF we hope that the document will be useful to advance in the important challenge of planning and managing public policies with integrity.

Do not hesitate to contact us if you have any questions at the following email: prevencion@antifraucv.es.

Irene Bravo Rey, Director of Prevention, Training and Documentation at the AVAF.

[1] https://www.antifraucv.es/wp-content/uploads/2024/03/12_herramientas_Codigo_Etico__.pdf

[2] https://www.antifraucv.es/codigo-de-integridad/

[3] https://www.antifraucv.es/recomendaciones-guias-y-manuales/

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