The Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) makes it unlawful for certain individuals and entities to pay foreign government officials in exchange for retaining or obtaining business. The provisions of the FCPA apply to all U.S. residents, some foreign securities issuers, and foreign firms or individuals who are involved, whether directly or through agents, in making corrupt payments in the U.S. If you fall under one of these categories and are being investigated for your involvement in a scheme to make unlawful payments to foreign entities, please contact an experienced federal crime attorney who can begin working on your behalf.
The FCPA prohibits the willful use of the mails, or any instrumentality of interstate commerce, to make an offer, pay, promise, or authorize payment to a foreign official, while knowing that at least a portion of the funds being offered will be used as a bribe to induce the recipient to:
- Do or omit to do an act in violation of that individual’s lawful duty;
- Secure an improper advantage in obtaining or retaining business; or
- Direct business to any person.
In addition to governing direct payments to foreign officials, parties, and candidates, the FCPA also prohibits making or sanctioning payments to any recipient if those payments are being made in furtherance of influencing a foreign official. Furthermore, payments are not restricted to monetary forms, so a person or company could be charged with violating this law even if no funds were actually involved in an exchange.
These prohibitions apply to individuals and entities all over the world, including publicly traded companies and their directors, officers, stockholders, employees, and agents. Agents can include third party agents, such as consultants, joint-venture partners, and distributors, regardless of whether they are actually present in the U.S.
In addition to these prohibitions, the FCPA also requires companies whose securities are listed in the U.S. to comply with its accounting regulations, which include:
- Making and keeping accurate records of a corporation’s transactions; and
- Devising and maintaining a system of internal accounting controls.
These requirements are meant to ensure that all of a company’s transactions are being executed in accordance with management’s orders.
Violating the FCPA’s provisions can result in serious sanctions for issuers, as well as their officers, employees, directors, stockholders, and agents, all of which can be held civilly liable for failing to adhere to the statute’s anti-bribery or accounting rules. In addition to paying prejudgment interest and hefty penalties, companies that are found in violation of this law may also be required to repay any ill-gotten gains, and to receive oversight from an independent consultant.
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