Oe Does the FCPA Apply to Cases of Principles of Corporate Liability for Extortion or Duress? Anti-Bribery Violations Situations involving extortion or duress will not give General principles of corporate liability apply to the rise to FCPA liability because a payment made in response to FCPA. Thus, a company is liable when its directors, officers, true extortionate demands under imminent threat of physical employees, or agents, acting within the scope of their employ- harm cannot be said to have been made with corrupt intent ment, commit FCPA violations intended, at least in part, to or for the purpose of obtaining or retaining business.’? In benefit the company.’ Similarly, just as with any other stat- enacting the FCPA, Congress recognized that real-world ute, DOJ and SEC look to principles of parent-subsidiary situations might arise in which a business is compelled to pay and successor liability in evaluating corporate liability. an official in order to avoid threats to health and safety. As Congress explained, “a payment to an official to keep an oil Parent-Subsidiary Liability rig from being dynamited should not be held to be made with There are two ways in which a parent company may the requisite corrupt purpose.”!” be liable for bribes paid by its subsidiary. First, a parent may Mere economic coercion, however, does not amount to have participated sufficiently in the activity to be directly extortion. As Congress noted when it enacted the FCPA: liable for the conduct—as, for example, when it directed its “The defense that the payment was demanded on the part of subsidiary’s misconduct or otherwise directly participated a government official as a price for gaining entry into a mar- in the bribe scheme. ket or to obtain a contract would not suffice since at some Second, a parent may be liable for its subsidiary’s con- point the US. company would make a conscious decision duct under traditional agency principles. The fundamental whether or not to pay a bribe.