Service of Process Abroad for FCPA Enforcement Actions
by Stephanie Keats
Prosecution of white collar crime, such as the recent Foreign Corrupt Practices Act (FCPA) case brought against Siemens executives who allegedly agreed to pay more than $100 million in bribes, often goes hand in hand with the prosecution of individuals residing in foreign countries. These sorts of crimes are often committed by individuals outside of the United States because practices that are illegal in the United States, such as bribery, are considered the norm (sometimes even a necessity) in foreign countries. The Securities and Exchange Commission (SEC) is seeing an increase in the amount of international prosecutions due to the recent focus on enforcing the FCPA. Although the anti-bribery portion of the FCPA was originally only enforced sporadically, it has now become a main priority and has resulted in more prosecutions of individuals. Although the SEC brings civil enforcement actions, it still must effectuate service of process on individuals against whom it wishes to bring proceedings. There are certain procedures in place that assist with service of process when bringing suit against individuals residing in a foreign country.
Due process requires that, in any proceeding, there be service of process by a method reasonably calculated to provide notice and an opportunity to respond. Rule 4(f) of the Federal Rules of Civil Procedure governs service of process on individuals living abroad. According to Rule 4(f), service is proper by any internationally agreed means of service, but if there is no such agreement or the agreement allows other means, service is proper by: (A) a method prescribed by the foreign country’s law; (B) a method directed by the foreign authority in response to a letter rogatory or letter of request; or (C) personal service or mail unless prohibited by the foreign country’s law. Service may also be effectuated by any other means not prohibited by international agreement, as the court orders. The Hague Convention is a multilateral agreement intended to effectuate international service of process. The primary method prescribed by the Convention involves sending process to the Central Authority of the jurisdiction in which process is to be served, who then must arrange to have process served on the individual.
Although the method prescribed by the Hague Convention satisfies due process, problems arise when signatories to the Convention do not abide by the terms set forth in the agreement. In such circumstances, courts will often look to Rule 4(f)(3), which essentially permits any type of service that comports with due process as long as it is court-directed and not prohibited by an international agreement. Although any court-ordered means must also not be prohibited under the Convention, the Convention itself does not actually prohibit any method and instead leaves it up to the individual signatories to reject specific alternative means of service. The Convention specifically permits the sending of judicial documents through postal channels, which may or may not include personal service, unless it has been disclaimed, but does not foreclose on other methods. The only methods prohibited by the Hague Convention are ones that the receiving country specifically rejects at the time of signing.
Courts have shown that they are very willing to exercise their discretion under Rule 4(f)(3) in these situations and order service of process by alternate means, such as email. In the Siemens case, the SEC was given permission by a federal judge to serve former Siemens executives charged with violating the FCPA by publication in the International Herald Tribune after the German government refused to cooperate because it did not believe the Hague Convention applied to this type of suit. These unique forms of service have allowed for service in situations where it would not otherwise be possible. It has also made it more difficult for countries wishing to avoid service by U.S. courts. Because countries must specifically reject means of alternate service under the Hague Convention, this means that they must foresee the types of service an American court may order. The more unique the means, the less likely that the country has already rejected it. This is opening more doors for the SEC to prosecute individuals in foreign countries when those countries refuse to comply with the Hague Convention for one reason or another.
Suggested Citation: Stephanie Keats, Service of Process Abroad for FCPA Enforcement Actions, GEO. J. INT’L L. ONLINE: THE SUMMIT (Dec. 27, 2012, 5:08P.M.), http://gjilsummit.blogspot.com/2012/10/update-fcpa-service-of-process.html.
