By Aruna Viswanatha

WASHINGTON (Reuters) - U.S. corporations asked the government to explain what it considers a bribe of a foreign official, saying the lack of clarity has had a chilling effect on business.

The Chamber of Commerce and dozens of other trade groups wrote a letter Tuesday to law enforcement officials laying out the guidance they want regarding the Foreign Corrupt Practices Act, which bars such bribes.

The letter comes days after two Democratic senators urged the U.S. Justice Department to provide information about how it enforces the law to offer more "predictability" to companies subject to it.

The U.S. government has stepped up its enforcement of the FCPA, extracting $1.8 billion in sanctions from 23 companies in 2010, according to an industry blog, the FCPA Blog.

However, the government has also experienced some recent setbacks in court on FCPA cases and has also promised to update its guidance on the law.

In its letter, the chamber and other groups ask for bright lines that companies should stay within for specific scenarios. They ask, for example, whether there are instances when an employee at a company controlled by a sovereign wealth fund is considered a "foreign official".

The law prohibits bribes to employees of any "instrumentality" of a foreign government, but fails to clearly define that word, the letter said.

They also want to know in what instances covering flight costs on a business trip, or making donations to charities connected to foreign governments could be considered a bribe.

And they asked under what circumstances a company is liable for past actions by another company it acquires, even if it did its due diligence on that corporation.

"The threat of successor liability even if a thorough investigation is undertaken prior to a transaction has had a significant chilling effect on mergers and acquisitions," the groups said in their letter to the Justice Department and the Securities and Exchange Commission.

Law enforcement officials are pursuing several high-profile investigations, including one into whether Avon Products used bribes to win the first-ever license given by China to a Western company to sell products door-to-door.

The SEC is also looking into Wynn Resorts' $135 million donation to the University of Macau and its gaming licenses in the Chinese gambling hub.

However, the department has recently been on the defensive after setbacks in some high-profile FCPA cases at trial.

Earlier on Tuesday, the DOJ moved to dismiss charges against more than a dozen defendants in one of its biggest bribery cases in the military equipment business, after prosecutors were unable to convince two juries that what the executives did was illegal.

NEW GUIDANCE COMING

In the past year the U.S. Chamber of Commerce has led a campaign to amend the 1970s-era law, and several senators have expressed support for legislative changes.

The Justice Department has said it would not support any legislation to change the law, but Lanny Breuer, who heads the department's criminal division, promised in a November speech the agency would soon offer "detailed new guidance" on the criminal and civil enforcement provisions of the law.

In addition to the guidance, expected in the form of updates to a document called the "Lay Person's Guide to the FCPA," the groups asked the agencies to publish information about those cases it decides not to prosecute.

The Justice Department is considering releasing that information, people familiar with the matter said.

(Reporting By Aruna Viswanatha; Editing by Tim Dobbyn)