"The FCPA Does Not Define the Term ‘Instrumentality,’ and this Court Has Not Either." The 11th Circuit Issues a Decision "Defining" Instrumentality
On May 16, 2014, the U.S. Court of Appeals for the 11th Circuit ruled in U.S. v. Esquenazi that the Foreign Corrupt Practices Act’s (FCPA’s) “instrumentality” provision could include state-owned businesses.Joel Esquernazi and Carlos Rodriquez co-owned Terra Communications (Terra). In 2011, a jury convicted Esquernazi and Rodriquez on 21 counts related to their business dealings with Telecommunications D’Haiti, S.A.M. (Teleco). Esquernazi and Rodriquez were sentenced to prison terms of 15 and 7 years, respectively.Esquernazi and Rodriquez challenged their convictions on the ground that the district court’s FCPA jury instructions were erroneous. The jury was instructed that an “instrumentality of a foreign government is a means or agency through which a function of the foreign government is accomplished. State-owned or state-controlled companies that provide services to the public may meet this definition.”The central question before the court was the meaning of “instrumentality” under the FCPA. The court provided the following list of factors to determine if an entity is an instrument of a foreign government.
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