The Travel Act: FCPA’s Sidekick Can Ride Alone - Globally
The federal Travel Act, 18 U.S.C. § 1952, which prohibits the use of communications and travel facilities to commit state or federal crimes, is mostly known for its use in prosecutions for domestic crimes. The Justice Department has, however, increasingly included the Travel Act in Foreign Corrupt Practices Act prosecutions, because it applies to foreign, as well as interstate, commerce. More importantly, where the predicate elements exist, the Travel Act applies, not merely to corruption of foreign officials, but also to private commercial bribery. See the July 2009 guilty plea to foreign Travel Act violations by Control Components, Inc., and the ultimately time-barred prosecution in U.S. v. Kozeny, 493 F.Supp. 2d 693 (S.D.N.Y 2007).
The Travel Act elements are: (1) use of a facility of foreign or interstate commerce (such as email, telephone, courier, personal travel); (2) with intent to promote, manage, establish, carry on, or distribute the proceeds of: (3) an activity that is a violation of state or federal bribery, extortion or arson laws, or a violation of the federal gambling, narcotics, money-laundering or RICO statutes. Thus, for example, if in promoting or negotiating a private business deal in a foreign country, a sales agent in the United States offers by telephone and pays by wire transfer a substantial amount to his foreign counterpart to influence his acceptance of the transaction, and such activity is a violation of the state law where the agent is doing business, the Justice Department may conclude that a violation of the Travel Act has occurred.
Particularly as other countries, national consortia and international anti-corruption organizations increase their cooperation with United States authorities, there will be an elevated risk of close scrutiny of private commercial transactions occurring abroad. Corporate compliance programs should consider incorporating this risk in their training and review.