Insight C & A -SPECIAL EDITION 2025 -The Foreign Extortion Prevention Technical Corrections Act (FEPA) & Its Implications on Global Business Practices

Insight & Counsel – Innovation and the Future of Business -SPECIAL EDITION 2025 -The Foreign Extortion Prevention Technical Corrections Act (FEPA) & Its Implications on Global Business Practices

A Newsletters from José Zambelli, CEO, Director, and CLO of Zambelli International Consulting LLC and Wise Universal Group Holding Company -Private Investor

Dear Colleagues, Partners, and Business Leaders,

We are writing to inform you about a pivotal update to the regulatory landscape that will significantly impact global business operations. As organizations continue to navigate an increasingly complex and interconnected international marketplace, staying ahead of legal developments is crucial to minimizing risk and maintaining the highest standards of integrity.

The Foreign Extortion Prevention Technical Corrections Act (FEPA), which was enacted in July 2024, represents a landmark shift in the United States’ approach to combating corruption. This legislation is a vital addition to the body of laws designed to prevent bribery and unethical conduct across borders, further reinforcing the U.S. commitment to fighting corruption on a global scale. As the regulatory environment evolves, companies must adapt and implement measures to remain compliant with this new law, which could have far-reaching implications for how businesses conduct international transactions and engage with foreign officials.

The Foreign Extortion Prevention Technical Corrections Act (FEPA) directly builds upon the foundation laid by the Foreign Corrupt Practices Act (FCPA), which for decades has been a key tool in the fight against bribery and corruption. However, FEPA goes beyond the scope of previous regulations by focusing on the demand side of foreign bribery. Whereas the FCPA primarily addresses the offeror or giver of bribes, FEPA criminalizes the act of foreign officials soliciting or demanding bribes, marking a significant step toward more comprehensive anti-corruption enforcement.

FEPA, therefore, does not just tighten existing laws; it expands the scope of accountability and highlights a shift in the U.S. legal framework’s approach to corruption prevention. The new law creates a stronger deterrent against corrupt practices by penalizing foreign officials who demand or seek payments in exchange for favorable decisions in business dealings. This change not only impacts U.S. companies but also foreign entities engaged in transactions within the U.S. jurisdiction or those with U.S. ties. As a result, business leaders and global organizations will need to ensure that their operations align with these heightened standards of compliance.

For companies with international operations or dealings involving foreign officials, understanding the intricacies of FEPA is essential. The law sets out strict criminal penalties for violations, which can lead to substantial fines and significant prison sentences for individuals found guilty of violating its provisions. These penalties underscore the seriousness with which the U.S. government treats extortion and bribery in international business transactions. Thus, business leaders must ensure that their organizations are prepared to meet the challenges posed by these new regulations.

The enactment of FEPA signals a more aggressive stance by the U.S. government in preventing foreign bribery and extortion and highlights the importance of adhering to global compliance standards. This development emphasizes the need for businesses to adopt comprehensive compliance strategies that not only prevent illegal activities but also promote a culture of ethical conduct and transparency.

In this context, it is crucial for business leaders to understand that the legislative changes introduced by FEPA are not simply a matter of legal compliance, but also a strategic consideration. Upholding compliance with such regulations is essential for protecting a company’s reputation, maintaining trust with stakeholders, and minimizing exposure to legal or financial risks.

As this new law continues to shape the landscape of international business, it is imperative that your organization remains vigilant, proactive, and responsive to the requirements set forth under FEPA. The need for thorough due diligence, robust internal controls, and a commitment to corporate governance has never been greater. By aligning your company’s operations with these evolving regulatory standards, you can help ensure that your business not only meets legal requirements but also contributes to a more ethical global marketplace.

In conclusion, understanding and navigating the complexities of the Foreign Extortion Prevention Technical Corrections Act will be an ongoing priority for businesses engaged in global commerce. Adapting to these changes is not just about legal compliance; it’s about safeguarding the integrity of your organization and ensuring that it operates responsibly and ethically in all markets. Now, more than ever, it is essential that we, as business leaders, remain vigilant in our commitment to maintaining the highest standards of integrity, transparency, and compliance.

Overview of the Foreign Extortion Prevention Technical Corrections Act (FEPA)

The Foreign Extortion Prevention Technical Corrections Act (FEPA), codified under 18 U.S.C. § 1352, represents a crucial step forward in strengthening U.S. anti-corruption laws. As an important amendment to the Foreign Corrupt Practices Act (FCPA), FEPA significantly enhances the ability of U.S. authorities to combat global bribery and corruption. While the FCPA has been instrumental in preventing the offering or giving of bribes to foreign officials, FEPA goes a step further by targeting the demand side of bribery, effectively closing a key enforcement gap in the existing legal framework. This makes FEPA a major evolution in how the U.S. addresses foreign bribery and corruption on the international stage.

At its core, the Foreign Extortion Prevention Technical Corrections Act criminalizes the actions of foreign officials who demand or seek bribes. Under FEPA, it is now illegal for a foreign official to engage in extortion or coercion by soliciting or requiring payments, either directly or indirectly, from companies in exchange for favorable treatment or decisions related to business dealings. This is a marked shift from the original scope of the FCPA, which primarily focused on the actions of companies and individuals offering bribes, rather than the foreign officials receiving or demanding them.

By focusing on the demand side of bribery, FEPA ensures that foreign officials cannot misuse their positions of power and influence to extract illegal payments from businesses. This could include seeking or accepting payments in exchange for facilitating business transactions, influencing government contracts, or securing favorable regulations. Under FEPA, these demands by foreign officials are now expressly prohibited, creating a more comprehensive and robust legal framework for combatting corruption.

FEPA's approach is designed to protect companies from the unethical practices of foreign officials who might otherwise exploit their official roles for personal gain. For instance, foreign officials may demand bribes as a condition for awarding government contracts, facilitating permits, or simply taking actions that benefit a company in return for illegal payments. With FEPA in place, these types of demands are criminalized, and businesses are given an additional layer of protection in their dealings with foreign officials. This shift not only reinforces existing anti-bribery laws but also establishes a deterrent against corrupt behavior by foreign officials who might otherwise feel emboldened to extract payments from businesses with little risk of prosecution.

Furthermore, FEPA’s application is broad, extending to not only direct payments but also indirect demands. This means that even if a foreign official is indirectly receiving or benefiting from a bribe—for example, through a third-party intermediary—the conduct can still be prosecuted under the new law. This makes FEPA particularly impactful in addressing the often complex and opaque networks through which international bribery and extortion can occur.

In essence, FEPA creates a more balanced and effective legal framework by targeting both the offeror and the recipient of bribes in foreign bribery schemes. While companies are still held accountable for offering or paying bribes under the FCPA, FEPA ensures that foreign officials who demand bribes are also held accountable for their actions. This comprehensive approach to anti-bribery enforcement not only strengthens the overall anti-corruption regime but also underscores the U.S. commitment to ensuring that all parties involved in bribery, regardless of their role, face the full weight of the law.

This new legislation thus provides enhanced legal clarity and protection for businesses operating internationally, ensuring that they are shielded from the corrupt demands of foreign officials. By closing this loophole, FEPA makes it more difficult for corrupt practices to thrive and promotes a culture of ethical conduct, where businesses and officials alike are held accountable for their actions. It also signals a stronger stance from the U.S. government in addressing the global issue of corruption, reinforcing the importance of integrity in international business dealings.

Ultimately, FEPA not only strengthens the U.S. legal framework but also aligns with the global movement toward greater transparency and accountability in business practices. As the business community continues to expand its reach into international markets, compliance with anti-corruption laws such as FEPA will be essential in mitigating legal risks, safeguarding reputations, and maintaining a competitive edge in a world where ethical conduct is increasingly demanded by consumers, investors, and regulatory authorities alike.

Key Provisions of FEPA

At the core of the Foreign Extortion Prevention Technical Corrections Act (FEPA) is the criminalization of certain actions involving foreign officials who engage in corrupt practices. Specifically, the Act makes it illegal for foreign officials—or individuals selected to be foreign officials—to corruptly demand, seek, receive, accept, or agree to accept any form of payment in return for taking specific actions or using their influence to benefit an individual or organization in connection with obtaining or retaining business. These actions might include decisions related to awarding contracts, issuing permits, or any other official act that could impact the ability of a company or individual to conduct business effectively. The payments can be made directly or indirectly, and they may be channeled through the use of the U.S. postal system, interstate commerce, or any other form of instrumentality of interstate commerce, such as telecommunications or electronic transfers.

By targeting both direct and indirect methods of bribery, FEPA casts a wide net in its effort to prevent corrupt practices. This expansive language ensures that even if an illicit payment is funneled through a third party, or if the exchange occurs in a jurisdiction outside the U.S., but involves U.S. commerce or U.S. citizens, the actions are still punishable under U.S. law. The law also ensures that foreign officials cannot avoid accountability simply by structuring transactions in a way that circumvents traditional bribery methods.

In terms of enforcement, FEPA is designed to hold accountable not only the foreign officials themselves but also those who facilitate or engage in such corrupt behavior. The law specifies certain groups of individuals and entities that may be involved in transactions subject to FEPA’s provisions. These include:

Issuers and Domestic Concerns: As defined under U.S. law in 15 U.S.C. §§ 78c(a) and 78dd-2, these are entities that are incorporated or based in the United States. In addition to the companies themselves, the law also covers their officers, directors, employees, agents, and stockholders acting on behalf of the company. This broad definition means that anyone who is directly or indirectly involved in the company’s activities, particularly in international transactions or dealings with foreign officials, can be held liable for violations of FEPA. For example, if a company based in the U.S. engages with foreign officials and any of its employees or agents is involved in a transaction that involves extortion or bribery, both the company and the individual(s) could face legal consequences.

Persons: As defined under 15 U.S.C. § 78dd-3, this category includes individuals or entities that are subject to U.S. jurisdiction or those engaged in business activities within the United States, provided that the foreign official (or someone acting on their behalf) is located in U.S. territory. This provision is particularly significant for global businesses and foreign entities operating in or with the U.S. market. If any part of a transaction, even a small aspect of it, involves the U.S. — whether through communication, financial transfers, or goods and services crossing U.S. borders — it could bring the transaction under the scope of FEPA, even if the primary parties involved are located outside the U.S.

These provisions make it clear that FEPA is not confined only to U.S. companies but applies to any individual or entity with ties to the U.S. market, regardless of their country of origin. In other words, if your company operates across international borders, has business dealings involving foreign officials, or maintains any connection to the U.S., FEPA is highly relevant to your global operations. This law, therefore, broadens the scope of anti-corruption enforcement, impacting businesses and individuals across the globe that interact with or have a presence in U.S. jurisdiction.

Global Implications for Businesses?For companies with international operations, the implications of FEPA are significant. It is not only critical for U.S.-based businesses to be aware of the law, but also for any foreign entities that do business in the U.S. or with U.S. citizens. The extraterritorial reach of FEPA means that companies involved in cross-border business transactions will need to ensure robust compliance programs are in place to detect and prevent any acts of extortion or bribery by foreign officials.

This includes companies in industries such as government contracting, energy, pharmaceuticals, telecommunications, and any other sector where foreign officials may play a role in facilitating or obstructing business operations. Additionally, companies involved in international trade, financing, or investment activities must also recognize that FEPA could apply if their dealings in any way involve U.S. commerce.

Key Considerations for Compliance

Given the broad scope of FEPA, businesses should take proactive steps to ensure compliance. Some key considerations include:

Strengthening Due Diligence and Monitoring: It is crucial for companies to enhance their due diligence processes to identify and assess risks associated with foreign officials. This includes scrutinizing not only potential payments but also any indirect methods of facilitating transactions that could involve bribes or extortion. Implementing comprehensive background checks and continuous monitoring of international transactions will help mitigate risks.

Implementing Internal Controls and Reporting Mechanisms: Companies should adopt strong internal controls that monitor and track transactions involving foreign officials. Ensuring transparency, establishing whistleblower protections, and providing employees with clear reporting mechanisms will help detect and deter any illicit conduct.

Training and Education: It is essential to educate employees, especially those in international markets, on the specific provisions of FEPA. Training programs should highlight the risks of dealing with foreign officials and stress the importance of maintaining ethical standards. Ensuring that employees understand both the legal and ethical implications of their actions will go a long way in fostering a compliance-oriented corporate culture.

Adapting Compliance Programs to New Laws: As laws like FEPA continue to evolve, companies must ensure their compliance programs remain up-to-date with the latest legal developments. This means consulting with legal and compliance experts, as well as staying informed about ongoing regulatory changes, to ensure full compliance with all relevant laws.

In conclusion, FEPA significantly broadens the scope of U.S. anti-bribery law, creating new challenges and responsibilities for businesses with international operations. The law's extraterritorial reach means that any company with connections to the U.S. must be diligent in monitoring their dealings with foreign officials and ensuring compliance with the new legal standards. As the global business landscape continues to evolve, understanding and adhering to these laws will be essential for maintaining a reputation for ethical business practices and minimizing legal and financial risks.

Penalties for Violations of FEPA

As with the Foreign Corrupt Practices Act (FCPA), violations of the Foreign Extortion Prevention Technical Corrections Act (FEPA) carry severe criminal penalties. The penalties for a FEPA violation underscore the seriousness with which the U.S. government addresses bribery and corruption, both domestically and internationally. A person or entity found guilty of violating FEPA's provisions could face up to 15 years of imprisonment and a fine of up to $250,000, or three times the monetary equivalent of the value of the demanded bribe, whichever amount is greater. This means that the financial repercussions of violating FEPA can be immense, particularly if the demanded bribe involves large sums of money. The substantial penalties reflect the U.S. government's commitment to cracking down on foreign bribery and extortion, ensuring that businesses and individuals understand the risks associated with engaging in such activities.

The severity of these penalties serves as a powerful deterrent, warning businesses, foreign officials, and individuals that the U.S. legal system will not tolerate corrupt behavior or attempts to exploit power for financial gain. For corporations, these penalties could also include significant reputational damage, making it all the more crucial for companies to take proactive steps in implementing compliance measures that mitigate the risks of being involved in illegal transactions.

However, unlike the FCPA, FEPA does not offer any civil remedies. This means that companies or individuals who violate FEPA will not be subject to civil fines or penalties under this law, which is a notable difference from the FCPA. The absence of civil remedies under FEPA means that there is no provision for private individuals or entities to file lawsuits seeking financial compensation for the harm caused by violations of the law. As such, the enforcement of FEPA is exclusively criminal in nature, and the penalties are designed to target the direct legal consequences of engaging in extortion or bribery with foreign officials.

Another key difference between FEPA and the FCPA is that FEPA does not grant enforcement authority to the U.S. Securities and Exchange Commission (SEC). While the SEC plays a central role in enforcing the FCPA, FEPA places sole enforcement responsibility with the U.S. Department of Justice (DOJ). This means that only the DOJ has the authority to investigate and prosecute criminal cases involving violations of FEPA, making the enforcement process more centralized and focused on criminal prosecution rather than regulatory oversight.

The DOJ's role in enforcing FEPA reinforces the criminal nature of the law, emphasizing that violations of FEPA will result in serious criminal charges and potential incarceration. The DOJ’s focus on criminal prosecution also means that businesses need to be extremely vigilant about their internal controls and corporate governance to ensure compliance and avoid attracting the attention of law enforcement authorities. As the primary body responsible for investigating and prosecuting FEPA violations, the DOJ will likely prioritize cases involving significant corruption or egregious violations, but even smaller-scale offenses could lead to criminal prosecution if they are deemed to involve extortion or bribery.

Given the lack of civil enforcement authority and the exclusive role of the DOJ in criminal cases, companies must recognize the heightened risk of prosecution for any potential violation of FEPA. This places an even greater burden on businesses to take proactive steps to prevent such violations. Robust internal compliance programs, thorough training for employees, regular audits, and a culture of zero tolerance for corruption are essential measures that can help businesses mitigate the risk of FEPA violations. Implementing effective internal controls not only protects the business from legal repercussions but also ensures that the company is acting in an ethical and responsible manner when dealing with foreign officials or international transactions.

Furthermore, given the significant criminal penalties associated with FEPA violations, businesses and executives should be particularly mindful of the personal liability they could face under the law. This liability extends to individuals, including corporate officers, directors, and employees, who may be held personally accountable for violating FEPA. The potential for long prison sentences and substantial fines increases the stakes for both companies and their leadership teams, making it all the more important to foster a culture of compliance and ethical decision-making within the organization.

In conclusion, FEPA’s criminal penalties are severe, and the sole enforcement by the DOJ emphasizes the seriousness of its provisions. The lack of civil remedies and SEC enforcement authority underscores the importance for companies to take proactive measures to prevent and detect potential violations. In the current regulatory environment, compliance with FEPA is not just about avoiding penalties; it is also about preserving a company’s reputation, ensuring ethical business practices, and maintaining trust with customers, investors, and regulatory authorities alike. Companies must invest in robust compliance frameworks to navigate the complexities of international business and avoid the significant legal and financial risks associated with bribery and extortion.

The Strategic Implications for Your Business

The enactment of the Foreign Extortion Prevention Technical Corrections Act (FEPA) introduces several critical considerations for organizations with global operations. While this law further strengthens the U.S. anti-corruption framework, its specific focus on foreign officials demanding bribes creates new and complex compliance challenges for businesses and executives operating across borders. These challenges are compounded by the fact that FEPA’s scope extends to any conduct involving foreign officials, including those who are in the process of being appointed or selected to hold such positions. As a result, companies must address these challenges with comprehensive, proactive measures that ensure compliance with both U.S. law and international anti-corruption standards.

While the Foreign Corrupt Practices Act (FCPA) has long served as the foundation for U.S. anti-bribery laws, FEPA's explicit focus on criminalizing the extortion of payments by foreign officials creates a need for businesses to revise their existing compliance programs. Organizations must now evaluate the risks posed by foreign officials demanding bribes, in addition to the traditional risks associated with offering or giving bribes. As the international business landscape evolves, these changes highlight the need for companies to strengthen their anti-corruption frameworks to prevent exposure to legal, financial, and reputational harm.

Key Compliance Recommendations for Organizations Operating Globally

1. Review and Strengthen Due Diligence Practices :?FEPA requires businesses to assess the integrity of foreign officials and their actions with a heightened level of scrutiny. In light of the new law, companies should expand their due diligence practices to specifically account for the potential extortion risks posed by foreign officials in international transactions. This includes conducting thorough background checks on officials with whom the company interacts, as well as evaluating the potential for bribery or extortion throughout the course of business dealings.

Organizations should be particularly diligent when doing business in countries with high corruption risks or where foreign officials are known to wield significant influence over business operations. By identifying red flags early on, companies can take steps to protect themselves from engaging in illegal or unethical transactions. Strengthening due diligence processes not only helps mitigate risks but also fosters transparency and trust in business relationships.

2. Enhance Training and Awareness Programs :Education is crucial in ensuring that employees understand the implications of FEPA and how to comply with its provisions. Training programs should be implemented to educate staff, particularly those operating in regions with a high risk of corruption, about the specifics of FEPA and other relevant anti-corruption laws, such as the FCPA. This training should emphasize the legal, financial, and reputational consequences of participating in bribery schemes, whether as the offeror or the recipient of illicit demands.

It is essential that all employees—whether they work in senior management, procurement, legal, or operations—understand the ramifications of engaging in extortion, even if the conduct is perpetrated by foreign officials. Training should also include real-world scenarios to help employees identify potential extortion or bribery situations. Employees should be encouraged to act ethically and report any suspicious activity that could potentially lead to violations of FEPA or other anti-corruption laws.

3. Implement Effective Reporting Mechanisms :Having a clear and confidential whistleblower system is essential to creating a culture of accountability and transparency within the organization. Establishing secure, anonymous channels for employees to report suspicious activities or potential violations of FEPA helps detect problems before they escalate. These reporting mechanisms should be accessible to all employees, no matter where they are located, and should guarantee that employees feel safe from retaliation when reporting violations.

It is important that companies demonstrate a zero-tolerance policy toward bribery and extortion. This includes supporting whistleblower protections and ensuring that all reports of misconduct are taken seriously and investigated thoroughly. Prompt action in response to reports of suspicious behavior will help reinforce a culture of ethical conduct and compliance.

4. Audit and Monitor International Operations :Given the complexities of global business transactions, companies should implement enhanced auditing procedures to focus on transactions involving foreign officials, particularly in regions where corruption risks are higher. Regular internal audits and third-party assessments can help identify any patterns of suspicious activity that might indicate illicit demands for bribes or extortion.

Technological solutions, such as AI-powered compliance tools, can be a powerful ally in monitoring international transactions. These tools can assist in automating monitoring processes, helping companies quickly detect anomalous behavior or deviations from standard practices. By integrating advanced technology into their compliance efforts, companies can ensure that they stay ahead of potential risks and regulatory requirements.

5. Strengthen Internal Controls and Corporate Governance :A robust set of internal controls is critical for ensuring that foreign officials cannot exploit their positions to demand bribes or extortion payments from the company. Organizations should regularly review and tighten controls around financial transactions, particularly those involving foreign officials. This includes implementing checks and balances, approval processes, and audit trails to ensure transparency in all dealings.

Furthermore, companies should strengthen their corporate governance frameworks, ensuring that ethical behavior and compliance with international anti-corruption laws are prioritized at all levels of the organization. A strong commitment from senior leadership to uphold anti-bribery and anti-extortion measures will set the tone for the entire organization, signaling the importance of compliance and ethical conduct.

6. Stay Informed on Legal Developments?The regulatory landscape surrounding corruption and bribery is continuously evolving. Companies must stay informed about any updates or changes to FEPA, the FCPA, or any other related laws, particularly in jurisdictions where their business operates. Legal teams should monitor any developments or amendments to the laws that could impact operations and compliance efforts.

It is also important to consult regularly with compliance and legal experts to assess emerging risks and to ensure that the organization’s compliance program remains up-to-date with the latest legal requirements. Staying ahead of changes in the law will help companies maintain compliance and avoid exposure to potential violations.

The Foreign Extortion Prevention Technical Corrections Act (FEPA) represents a significant shift in the U.S. government's approach to anti-corruption enforcement, focusing specifically on the demand side of bribery and extortion by foreign officials. For companies with global operations, this law introduces new challenges, particularly in how they assess risks associated with foreign officials and their potential to demand bribes or extort payments.

By reviewing and strengthening due diligence, enhancing training and awareness programs, implementing effective reporting mechanisms, and ensuring strong internal controls and governance, businesses can mitigate the risk of FEPA violations. Staying informed about legal developments and seeking expert guidance will also ensure that your organization remains compliant with the evolving regulatory landscape.

With proactive measures in place, companies can continue to operate in global markets while adhering to the highest ethical standards, reducing the risks of legal exposure, and maintaining their reputation as responsible corporate citizens.

Introduction: The business landscape of 2025 is marked by significant shifts in regulations, with a particular focus on foreign corruption, compliance, and ethical standards. In this special edition of Insight & Counsel, we delve into the implications of a recent landmark piece of legislation—the Foreign Extortion Prevention Technical Corrections Act, or FEPA, which was enacted in July 2024. This critical piece of law enhances the framework of global anti-corruption practices, complementing the long-standing Foreign Corrupt Practices Act (FCPA), and is set to reshape the way companies, both domestic and international, navigate foreign bribery and extortion risks.

The Foreign Extortion Prevention Act (FEPA) - A Game-Changer for Global Business Compliance

The Foreign Extortion Prevention Technical Corrections Act (FEPA), codified under 18 U.S.C. § 1352, introduces a pivotal amendment to the landscape of international business ethics and compliance. Its enactment represents a decisive move by U.S. lawmakers to strengthen global anti-corruption efforts, particularly in tackling the demand side of foreign bribery. While the Foreign Corrupt Practices Act (FCPA) has long been a cornerstone of U.S. anti-bribery enforcement, the introduction of FEPA fills a critical gap by focusing on the corrupt activities of foreign officials who actively demand, seek, or extort bribes. This is a clear and strong message from the U.S. government that extortion and bribery will not be tolerated, no matter where they occur in the world, or who is involved.

By targeting the demand side of bribery, FEPA aims to not only penalize foreign officials but also to reduce the systemic corruption that can have wide-reaching consequences for businesses and their ethical operations worldwide. The act’s influence extends beyond U.S. borders, providing a robust tool for combating the abuse of power by foreign officials who leverage their positions for financial gain. As a result, businesses must re-evaluate their compliance frameworks to account for these new regulatory requirements.

FEPA’s Core Principles

At its core, FEPA criminalizes the actions of foreign officials who demand, seek, receive, accept, or agree to accept payments in exchange for actions or decisions related to securing or retaining business. The law targets foreign officials, or even those in the process of being selected to hold such positions, and their demand for illicit payments in return for favorable business decisions. These bribes may take the form of money, gifts, or any other thing of value. Importantly, these demands can be made directly or indirectly, and the bribes are often funneled through interstate commerce channels (e.g., mail, internet transactions, or other means of interstate or foreign commerce).

The primary goal of FEPA is to reduce the coercive influence that foreign officials may wield in facilitating business deals, decisions, or actions that benefit corrupt entities, often to the detriment of ethical companies and organizations. By criminalizing this conduct, FEPA provides the necessary legal tools for enforcement and the protection of companies from undue foreign influence. The key aspects of FEPA’s principles include:

Demanding, seeking, receiving, or agreeing to accept bribes: FEPA specifically targets foreign officials who solicit bribes in exchange for favorable decisions that benefit the paying entity, either directly or indirectly.

Utilizing interstate commerce for illicit payments: The payments involved in the bribery scheme are made using the U.S. postal system or any means of interstate commerce such as telecommunications or digital services.

Business-related actions: The bribes are tied to actions that relate to obtaining or retaining business, or influencing business decisions. This reflects FEPA’s comprehensive scope, ensuring that it covers both high-level decision-making and more operationally-focused actions.

The Extortion Side of Bribery

What sets FEPA apart from its predecessor, the Foreign Corrupt Practices Act (FCPA), is its focus on the demand side of bribery, particularly extortion. While the FCPA primarily targeted individuals or organizations offering or giving bribes to foreign officials, FEPA shifts the focus to the other side of the equation—the foreign official actively seeking or demanding illicit payments in exchange for favorable treatment.

This shift is critical, as it addresses a growing global concern regarding the coercive nature of bribery. Under the FCPA, companies and individuals were already at risk of prosecution for offering or giving bribes. However, there was no parallel criminalization of the conduct by foreign officials who, in many instances, were the ones initiating corrupt transactions by making demands for bribes. With the introduction of FEPA, the focus is now on stopping extortion and preventing the abuse of power by foreign officials, thus creating a more balanced and comprehensive framework to tackle corruption.

For businesses operating internationally, this means that they are now at risk of criminal liability not only for offering bribes but also for succumbing to extortion by foreign officials. The shift in focus expands the scope of corporate responsibility, as companies must be vigilant not only about their own conduct but also in preventing and reporting any attempts by foreign officials to extract bribes. This proactive approach provides businesses with an additional layer of protection, while simultaneously imposing higher compliance standards.

Furthermore, FEPA’s provisions ensure that even if a company does not actively participate in the bribery scheme but succumbs to coercion or extortion, they may still face significant penalties. This is crucial in regions where foreign officials have significant control over business operations, such as permitting, licensing, or regulatory approvals. The fear of potential extortion often places companies in a vulnerable position, and FEPA provides a mechanism to counteract such undue pressure.

The drug trafficking cartels in Mexico have been a central topic of discussion and concern both nationally and internationally due to their impact on security, economy, and politics in the country. These criminal groups operate on a large scale and are involved in drug trafficking, extortion, kidnappings, and other violent crimes, leading to a widespread violence crisis in several regions of Mexico.

1. Sinaloa Cartel

One of the most well-known and powerful, the Sinaloa Cartel has historically been led by figures like Joaquín "El Chapo" Guzmán, who was captured and extradited to the United States. The Sinaloa Cartel has played a central role in trafficking cocaine, heroin, methamphetamines, and marijuana to the U.S. and other parts of the world. Despite the capture of its leader, the cartel remains a major force in drug trafficking.

2. Jalisco New Generation Cartel (CJNG)

The CJNG has gained notoriety in recent years due to its growing power and brutality. Founded by Nemesio Oseguera Cervantes, known as "El Mencho," the CJNG has rapidly expanded throughout Mexico and has a presence in many key cities, where it fights for control of drug trafficking routes and distribution. This cartel is responsible for many violent confrontations in various regions, especially in Jalisco, Michoacán, and Guanajuato.

3. Los Zetas Cartel

The Los Zetas Cartel was originally an organization made up of defectors from the Mexican armed forces, and at its peak, it was one of the most feared groups due to its military capabilities and violent tactics. While its power has diminished in recent years, it still operates in various regions, engaging in activities such as drug trafficking, kidnapping, and extortion.

4. Gulf Cartel

The Gulf Cartel has been one of the most historic groups in Mexican drug trafficking. In its early years, it had a close relationship with the Zetas, but after an internal feud, the Zetas split off and formed their own group. While the Gulf Cartel has lost much power compared to its peak, it remains an active organization, especially in Tamaulipas, where it is involved in trafficking cocaine, marijuana, and other drugs.

5. Tijuana Cartel

The Tijuana Cartel, also known as the Arellano Félix Cartel, was one of the most prominent organizations in the late 90s and early 2000s. This cartel, which operated primarily in the Tijuana border region, has suffered significant blows due to the capture of its leaders. While its influence has diminished, it still exists and continues to operate, especially in the border region.

6. Juárez Cartel

The Juárez Cartel was, for many years, one of the most powerful players in drug trafficking, controlling key routes into the United States. The internal struggle for control of Ciudad Juárez, and its rivalry with the Sinaloa Cartel, has led to numerous violent confrontations in the region. Although its influence has decreased, the cartel is still relevant in drug trafficking and other criminal activities.

7. La Familia Michoacana Cartel

Although this cartel has lost much power compared to previous years, La Familia Michoacana remains a significant player in organized crime in Mexico, especially in the state of Michoacán. Its involvement in drug trafficking and other illegal activities, such as extortion and violence, continues to affect the region.

8. Beltrán Leyva Cartel

The Beltrán Leyva Cartel was an organization that split from the Sinaloa Cartel after an internal dispute. While the Beltrán Leyvas were largely dismantled with the capture of their leaders, factions still operate in different parts of the country, particularly in Guerrero.

Impact on Security and Society

The drug cartels in Mexico have been responsible for a grave violence crisis, with thousands of deaths every year due to clashes between criminal organizations, as well as innocent victims caught in the crossfire. The competition for control of drug trafficking routes, distribution territories, and the domestic narcotics market has created an environment of extreme violence in many regions.

In addition to the violence, the cartels also have a significant impact on the economy, politics, and daily life in Mexico. Many communities live under the constant threat of extortion, kidnapping, and other forms of direct violence.

The Fight Against Cartels

The fight against drug cartels in Mexico remains an ongoing challenge for authorities, who must deal with both the violence generated by the cartels and the corruption that often allows them to operate with impunity. Despite efforts by the Mexican government to combat the cartels, including military deployments and the capture of high-profile cartel leaders, drug trafficking continues to be a persistent problem due to the growing demand for drugs in the United States and other parts of the world.

In conclusion, the drug cartels in Mexico are powerful and violent players in the global criminal economy. Their impact remains profound, and the fight against them is a priority on both the national and international agenda.

Broader Impact and Implications for Global Business

The introduction of FEPA has profound implications for companies involved in international business. As businesses increasingly operate across borders, they must take proactive steps to ensure they do not fall victim to the extortionate practices of corrupt foreign officials. In addition to their usual anti-bribery compliance efforts, companies must now focus on:

Heightened vigilance when dealing with foreign officials, especially in jurisdictions where corruption and bribery are known to be prevalent.

Thorough due diligence to identify potential extortion risks, particularly in markets where businesses might be coerced into making illicit payments to foreign officials to facilitate business operations.

Enhanced training and compliance programs that inform employees of the risks associated with dealing with foreign officials who may solicit or demand bribes.

Stronger internal reporting systems to allow employees to report suspicious activities related to extortion or demands for bribes by foreign officials.

A Comprehensive Approach to Combating Global Corruption

Ultimately, the introduction of FEPA signifies a broader effort by the U.S. government to combat global corruption and promote ethical business practices across international markets. FEPA represents an important step in creating a level playing field for businesses by ensuring that foreign officials can no longer abuse their positions to extract illegal payments from companies seeking to do business. For global organizations, compliance with FEPA is now essential to mitigating the risks of legal and reputational harm associated with extortion and bribery.

As the global business environment becomes more interconnected, the need for comprehensive anti-corruption frameworks becomes more critical. By addressing both the supply and demand sides of bribery, FEPA strengthens the existing anti-bribery laws and provides a more robust deterrent against corruption. For companies, this means that ethical conduct, transparency, and diligent compliance efforts will be more important than ever in ensuring their continued success in the global marketplace.

Global Implications of the FEPA

The Foreign Extortion Prevention Technical Corrections Act (FEPA) has far-reaching global implications for businesses engaged in international operations. One of the most significant aspects of the legislation is its extraterritorial reach, which extends the law’s jurisdiction well beyond U.S. borders. This means that businesses, whether U.S.-based or international, need to be mindful of FEPA’s requirements and ensure their operations are in full compliance, no matter where they conduct business. FEPA’s broad scope ensures that companies must adapt to the increasingly complex global regulatory environment. Even if a company is not physically located in the U.S. or has no direct presence there, it is still subject to the law if it engages in any activities that involve U.S. channels, such as interstate commerce or the postal system.

This means that international businesses with dealings in the U.S., or those that use U.S.-based platforms, services, or systems for communication, transactions, or logistics, may still be subject to the law’s provisions. This extraterritorial reach underscores the increasing interconnectedness of global trade and the growing influence of U.S. regulations on international business practices. For instance, any business transaction that involves cross-border communication, financial transfers, or the use of technology systems based in the U.S. could trigger the application of FEPA. In practical terms, this includes using U.S.-based banks for payments, conducting transactions via U.S. websites, or utilizing U.S. postal services or couriers for shipments. In such cases, even if a foreign official is based outside the U.S., the transaction or exchange involving a bribe or extortion demand may fall under the jurisdiction of FEPA if U.S. commerce or mail is involved.

A New Layer of Responsibility for Global Businesses :

This extraterritorial application places an additional layer of responsibility on businesses with international operations. For companies that engage in global transactions or have subsidiaries, suppliers, customers, or other business relationships outside of the U.S., it is crucial to understand how FEPA may affect their day-to-day operations. As a result, multinational corporations must now incorporate the following strategies into their global compliance frameworks: Enhanced Risk Assessments: Businesses must perform a more thorough analysis of all international transactions to assess the potential for extortion demands from foreign officials. Even if a company operates primarily in foreign markets, any action involving U.S. communication channels or commerce could expose it to FEPA liability. Comprehensive Due Diligence: As part of their compliance efforts, organizations must ensure that they have robust due diligence procedures in place to vet foreign officials and entities with whom they interact. This includes identifying any potential risks related to extortion and ensuring that foreign officials involved in transactions do not engage in corrupt practices. Global Compliance Training: Employees at all levels and in all regions must be trained on FEPA and its implications. Global businesses should focus on educating their workforce about the importance of avoiding corrupt practices, including the extortion of bribes. Special attention should be given to employees working in regions or markets with higher risks of corruption, where foreign officials may have more leverage in influencing business outcomes. Monitoring and Reporting Systems: In light of FEPA's far-reaching jurisdiction, organizations should implement enhanced monitoring systems that specifically track interactions with foreign officials, particularly in high-risk jurisdictions. These systems should allow employees to flag any suspicious behavior related to demands for bribes or other forms of extortion. Further, businesses should create confidential reporting channels to facilitate transparency and encourage employees to report any concerns without fear of retaliation. Coordination Between Global and U.S. Operations: For companies with both international and U.S.-based operations, it is essential to foster collaboration between compliance teams in different regions. This coordination helps ensure that international business practices align with U.S. regulatory requirements and that any instances of bribery or extortion are handled in accordance with FEPA and other relevant laws.

Impact on Non-U.S. Companies :While U.S.-based companies have long been subject to the FCPA and other U.S. regulations, non-U.S. businesses that operate internationally will now need to pay close attention to the FEPA. Foreign companies engaging with U.S. interests, conducting transactions through U.S. platforms, or using U.S.-based systems may now be subject to U.S. jurisdiction in instances where foreign officials demand bribes or engage in corrupt conduct.

This creates a complex landscape for non-U.S. companies to navigate, as they may not only have to comply with their own national anti-corruption laws but also with the broader global reach of U.S. anti-corruption regulations. As a result, these companies will likely need to expand their compliance programs to account for U.S. legal requirements, including implementing measures to prevent foreign officials from extorting bribes.

Unlike the Foreign Corrupt Practices Act (FCPA), the Foreign Extortion Prevention Technical Corrections Act (FEPA) does not grant enforcement authority to the U.S. Securities and Exchange Commission (SEC). This is a notable distinction, as the SEC plays a significant role in enforcing compliance with the FCPA, especially when it comes to civil penalties and corporate settlements. However, FEPA focuses exclusively on criminal enforcement, and the U.S. Department of Justice (DOJ) is the sole authority responsible for investigating and prosecuting violations under this law.

The absence of SEC involvement in FEPA means that businesses cannot rely on civil enforcement mechanisms to settle potential violations or avoid criminal prosecution. As a result, organizations must place even greater emphasis on proactive compliance measures, including robust internal controls, training, and reporting systems to detect and prevent violations. Since the DOJ holds exclusive authority, businesses must be prepared for the possibility of extensive investigations, legal proceedings, and significant financial penalties if they are found in violation of FEPA.

This shift also underscores the criminal nature of FEPA violations. While the SEC may issue fines and settlements under the FCPA, the DOJ’s exclusive role in FEPA enforcement means that violations could result in severe criminal penalties, including long-term imprisonment for individuals and substantial fines for companies.

As such, businesses must be especially vigilant about their compliance with FEPA and ensure that their internal procedures are designed to mitigate the risk of foreign officials demanding or seeking bribes. This includes continuous monitoring of international operations, conducting thorough due diligence on foreign officials and entities, and fostering a corporate culture committed to ethics and transparency at all levels of the organization.

By aligning with the DOJ’s standards and ensuring a strong internal compliance framework, businesses can avoid legal pitfalls and mitigate the risk of costly legal consequences, including criminal liability for both individuals and companies.

Global Compliance in the Era of FEPA?In today’s globalized world, the FEPA emphasizes the shared responsibility of businesses, governments, and law enforcement in tackling corruption at all levels. It signals to companies worldwide that ethical business practices are expected and will be enforced, regardless of geographical boundaries. The law’s extraterritorial reach ensures that businesses—whether they operate domestically or abroad—cannot turn a blind eye to the influence of corrupt foreign officials.

For businesses engaged in global trade, the FEPA presents both challenges and opportunities. Companies now have an opportunity to enhance their compliance efforts, foster ethical leadership, and be recognized as companies that take a strong stand against corruption. However, they must remain vigilant and proactive, continually assessing risks, strengthening due diligence practices, and ensuring that all employees are well-informed about the law’s provisions.

In conclusion, the FEPA’s extraterritorial reach is a game-changer for businesses worldwide. It reflects the U.S.’s commitment to combating corruption globally and sends a powerful message to foreign officials who may seek to exploit their power for financial gain. Companies that take the necessary steps to adapt their compliance strategies to meet the law’s requirements will be better positioned to navigate the complexities of the global marketplace and avoid the potential legal and reputational consequences of non-compliance.

As we navigate the increasingly complex terrain of international business, compliance with global standards becomes not just a matter of legal responsibility but also one of corporate integrity. The introduction of the Foreign Extortion Prevention Technical Corrections Act (FEPA) serves as a timely reminder of the need for vigilance and due diligence in all international dealings, particularly in regions where bribery and corruption may still be prevalent. The law’s explicit focus on foreign extortion sends a clear and powerful message: businesses must be prepared to evolve and adapt to an ever-changing regulatory landscape. It underscores the need for proactive measures to safeguard against the exploitation of power, ensuring that foreign officials can no longer extort payments or demand bribes in exchange for favorable business outcomes. In this new era of compliance, it is critical for companies to adopt a comprehensive approach to monitoring and managing risks. As stewards of our companies, we have a duty to ensure that our business operations, especially those abroad, reflect the highest standards of ethics and compliance. Whether it’s assessing new markets, engaging with foreign officials, or managing international partnerships, every step must be measured, thoughtful, and compliant with the evolving legal frameworks set forth by authorities like the U.S. Department of Justice (DOJ). Business leaders must take the time to ensure that their internal processes, controls, and risk management structures are aligned with FEPA’s provisions. At Zambelli International Consulting LLC, we have long championed the need for robust risk management frameworks, and I encourage each of you to consider the implications of FEPA for your organization. Now is the time to revisit your compliance strategies and ensure that your teams are equipped to navigate this evolving legal environment. It's not just about avoiding legal penalties; it's about preserving the reputation and integrity of your organization, making sure that your actions align with your corporate values. FEPA presents both a challenge and an opportunity for business leaders across the globe. By addressing these new challenges head-on, we can help ensure that we are not only compliant but also setting new standards for business ethics. This is an opportunity to demonstrate leadership, not just in terms of revenue generation and innovation, but in fostering a culture of transparency and corporate responsibility. It’s a call to action to uphold the values of integrity, fairness, and accountability in all aspects of business dealings. Together, let’s continue leading by example and set new standards for business ethics, transparency, and innovation. By remaining vigilant, educated, and proactive, we can rise to the occasion and shape a business environment where ethical decision-making and compliance are at the forefront of everything we do. Let’s be the change-makers in this new era of international commerce, setting the stage for a more ethical and sustainable future for all.? "Leading Compliance, Driving Global Success..............Integrity in Every Transaction, Excellence in Every Solution."??

Warm Regards, José Zambelli CEO, Director, and CLO Zambelli International Consulting LLC & Wise Universal Group Holding Company

Stay Ahead with Zambelli International Consulting LLC

At Zambelli International Consulting LLC, we understand that the landscape of international business is constantly evolving, with new laws, regulations, and compliance challenges emerging regularly. As part of our ongoing commitment to providing you with top-tier strategic guidance, our team is dedicated to staying at the forefront of regulatory changes—especially in areas related to business ethics, legal compliance, and anti-corruption. This ensures that we can deliver the most relevant and timely advice to our clients, helping them successfully navigate the complexities of global business.

The Foreign Extortion Prevention Act (FEPA) represents one such significant development, and we are actively monitoring how this legislation will shape the future of international commerce. Our goal is to ensure that you are not only aware of the implications of FEPA but also equipped with the right tools and strategies to stay ahead of compliance risks.

If you have any questions or concerns regarding the impact of FEPA on your business or operations, or if you are unsure how this law might affect your existing compliance framework, our team at Zambelli International Consulting LLC is here to provide expert advice and tailored solutions. We offer detailed consultations to help businesses understand how to effectively comply with FEPA and other relevant regulations, especially in complex, high-risk international markets.

We can guide you through the process of assessing your current compliance practices, identify potential vulnerabilities, and help implement best practices for foreign bribery prevention. Whether you need assistance with due diligence on foreign officials, employee training, or internal auditing to detect illicit activities, we have the experience and expertise to ensure your business remains on track.

At Zambelli International Consulting LLC, we’re not just advisors—we’re partners in helping you navigate the challenges of the modern regulatory environment. By staying informed and proactive, we can assist you in mitigating risks, avoiding legal pitfalls, and ultimately strengthening your organization’s reputation in the global marketplace.

For additional insights on FEPA, its potential effects on your business operations, and how you can align your practices with U.S. compliance standards, don’t hesitate to reach out to us. Our team is ready to help you tackle the complexities of global compliance and ensure your business thrives in an ever-changing landscape.

Together, we can foster a culture of transparency, integrity, and compliance, safeguarding your organization against the risks of bribery and corruption.