Post 10 July

10 Key Facts About the Foreign Corrupt Practices Act (FCPA)

1. Scope and Purpose
   • Primary Objective: Prevents bribery of foreign officials to obtain or retain business, promoting ethical practices and fair competition.
   • Dual Provisions: Consists of anti-bribery and accounting provisions.
2. Anti-Bribery Provisions
   • Prohibited Actions: Illegal to offer, promise, or give anything of value to foreign officials to influence their actions or gain an improper advantage.
   • Foreign Officials: Includes foreign government employees, public international organization staff, political candidates, and anyone acting in an official capacity.
3. Accounting Provisions
   • Books and Records: Requires accurate records reflecting all transactions and asset dispositions.
   • Internal Controls: Mandates an adequate system of internal accounting controls for financial accuracy and accountability.
4. Jurisdiction and Applicability
   • U.S. Companies: Applies to U.S. persons, including corporations, citizens, and entities organized under U.S. law.
   • Foreign Entities: Also applies to foreign entities if they cause corrupt payments to occur within the U.S.
5. Third-Party Liability
   • Agents and Intermediaries: Companies can be liable for corrupt actions by their agents or intermediaries if they knew or should have known about the corrupt practices.
   • Due Diligence: Companies should conduct thorough due diligence on third parties to mitigate FCPA risk.
6. Facilitation Payments
   • Exception: Allows payments to expedite routine governmental actions (e.g., processing visas) but is narrowly defined.
   • Caution: Companies must ensure such payments strictly meet the definition of permissible facilitation payments.
7. Penalties and Enforcement
   • Civil and Criminal Penalties: Violations can result in substantial fines and imprisonment for individuals.
   • Enforcement Agencies: The DOJ and SEC are responsible for enforcing the FCPA.
8. Whistleblower Provisions
   • Dodd-Frank Act: Provides monetary rewards and protection to whistleblowers reporting FCPA violations.
   • Confidential Reporting: Whistleblowers can report violations confidentially and may receive a share of the monetary sanctions collected.
9. Compliance Programs
   • Corporate Responsibility: Encourages robust compliance programs to prevent and detect violations.
   • Best Practices: Includes clear policies, regular training, risk assessments, due diligence on third parties, and confidential reporting mechanisms.
10. International Cooperation
    • Global Efforts: Part of broader international anti-corruption efforts, with cooperation from countries and organizations like the OECD and the UN.
    • Mutual Legal Assistance: U.S. government often works with foreign counterparts on cross-border corruption cases.