Case Studies

FCPA Case Studies

Case #1: McDonald’s in China, 1998

No, these are not sanctioned by the Chinese government and would not fall under the exceptions for payments that are found under the Permissible Payments and Affirmative Defenses section of the FCPA.

Case # 2: Enterprise Investors in Warsaw, 1990

Yes, they should pay for quick installation because this is allowed under the permissible exceptions for expediting phone service. In the FCPA it states this would fall under the exception for expediting performance of a “routine governmental action”.

Case # 3: Alpha Media in Budapest, 1994

No, they should not pay this payment. Under section Basic Prohibition, Part B it states that it is illegal if there is corrupt intent. When the auditor states that he knows a person that they could hire and then the auditors would not be as inclined to dig as deep into there financial records creates a perception of corrupt intent.

Case # 5: Saybolt International, 1995

Yes, they should make the payment. Mead is a British Citizen employee of the company and resides in the U.S. If he makes the payment or arranges the payment on behalf of the company then it would be prohibited under the FCPA, but if the company makes the payment directly and excludes Mead from the process it should be okay. The lawyer was correct to tell Mead not to do it because he is a resident of the United States. If it permissible under Netherlands law then it should be legal.

Case # 8: Retaining a Local Lawyer

I would not hire the Parliament member because that could be perceived as a payment to a governmental official to gain unfair advantage in the negotiations. This would fall under section Sanctions Against Bribery of the FCPA, Part E ‘Business Purpose Test’.

Case # 9: Charitable Contributions

No, even though the donation may not directly benefit the foreign official, there could be an indentified gain to the company that would fall under Part B, ‘Corrupt Intent’ based on...