Norwegian oil company subjected to US law?
May 23, 2011 5:38 AM   Subscribe

In 2006, Norwegian petroleum company Statoil was ordered by a US court to pay $21M in fines for breaking the Foreign Corrupt Practices Act when paying bribes to an Iranian public servant. While Statoil's primary listing is with the Oslo stock exchange, it is also listed with the NYSE. To what extent is Statoil's activities outside of the US subjected to US law?
posted by klue to Law & Government (4 answers total)
If a foreign company has registered securities to trade on US exchanges they have to abide by various US laws. It may matter whether the shares in question are American Depository Receipts.

And other issues may pertain, as well, to the question of whether this fine could be enforced.
posted by dfriedman at 6:00 AM on May 23, 2011

Here is a short article discussing the extraterritorial reach of the FCPA.
posted by hawkeye at 6:25 AM on May 23, 2011

This is not legal advice and IANYL, but the US DoJ has a layperson's guide to the FPCA:

and taken from that guide:

A. Who -- The FCPA potentially applies to any individual, firm, officer, director, employee, or agent of a firm and any stockholder acting on behalf of a firm. Individuals and firms may also be penalized if they order, authorize, or assist someone else to violate the anti-bribery provisions or if they conspire to violate those provisions.

Under the FCPA, U.S. jurisdiction over corrupt payments to foreign officials depends upon whether the violator is an "issuer," a "domestic concern," or a foreign national or business.

An "issuer" is a corporation that has issued securities that have been registered in the United States or who is required to file periodic reports with the SEC. A "domestic concern" is any individual who is a citizen, national, or resident of the United States, or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States, or a territory, possession, or commonwealth of the United States.

Issuers and domestic concerns may be held liable under the FCPA under either territorial or nationality jurisdiction principles. For acts taken within the territory of the United States, issuers and domestic concerns are liable if they take an act in furtherance of a corrupt payment to a foreign official using the U.S. mails or other means or instrumentalities of interstate commerce. Such means or instrumentalities include telephone calls, facsimile transmissions, wire transfers, and interstate or international travel. In addition, issuers and domestic concerns may be held liable for any act in furtherance of a corrupt payment taken outside the United States. Thus, a U.S. company or national may be held liable for a corrupt payment authorized by employees or agents operating entirely outside the United States, using money from foreign bank accounts, and without any involvement by personnel located within the United States.

Prior to 1998, foreign companies, with the exception of those who qualified as "issuers," and foreign nationals were not covered by the FCPA. The 1998 amendments expanded the FCPA to assert territorial jurisdiction over foreign companies and nationals. A foreign company or person is now subject to the FCPA if it causes, directly or through agents, an act in furtherance of the corrupt payment to take place within the territory of the United States. There is, however, no requirement that such act make use of the U.S. mails or other means or instrumentalities of interstate commerce. Finally, U.S. parent corporations may be held liable for the acts of foreign subsidiaries where they authorized, directed, or controlled the activity in question, as can U.S. citizens or residents, themselves "domestic concerns," who were employed by or acting on behalf of such foreign-incorporated subsidiaries.
posted by Mattat at 7:09 AM on May 23, 2011

Pretty much any large company doing any kind of international money transfers is affected. Many, if not most, electronic funds transfers are routed through banks in New York at some point, thereby becoming subject to seizure by US authorities. The FCPA is (and Treasury sanctions programs, too) so effective because 1) they rely on the implicit threat of seizure of a company's assets having even that fleeting "US presence", and 2) because often, the wording of the regulations is intentionally vague. Companies tend to "play it safe" rather than risk running afoul of vaguely-worded statutes/regulations.
posted by holterbarbour at 7:09 PM on May 23, 2011

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