Korean Shakedown

IBUS 480 Fall 2015

Case Study #2: “Korean Shakedown”

Case Questions

1. Refer to the attachment related to the FCPA Overview provided with this case study on the course Bb site. Based on the specific criteria of the act as outlined on the first two pages of this attachment (10 points):

a. Is Ringo subject to the FCPA based on the facts of this case? Yes or No. Explain your answer.

Yes he is subject to the FCPA, because he is a U.S. citizen, which means he has formal ties to the United States. According to the FCPA, U.S. “issuers” and “domestic concerns” must obey they FCPA, even when acting outside the country. The definition of “domestic concerns” is any individual who is a citizen, national, or resident of the United States. The category of “domestic concerns” also includes any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship with its principal place of business in the U.S. or organized under the laws of a state of the U.S. So, U.S. corporations and nationals can be held liable for bribes paid to foreign officials even in no actions or decisions take place within the U.S.

b. Would the payment outlined in the case to Mr. Lee be a violation of the FCPA? Yes or No. Explain your answer.

According to the FCPA, a violation consists of a few elements. If a person or organization is guilty of violating the law and the government can prove the existence of:

• A payment, offer, authorization, or promise to pay money or anything of value

• For the purpose of influencing any act or decision of a person, inducing a person to do or omit any action in violation of his lawful duty, securing an improper advantage, or inducing such person to use his influence to affect an official act or decision

• In order to assist in obtaining or retaining business for or with, or directing any business to, any person, along with a couple more elements.

To answer...