The Foreigh Corrupt Practices Act

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (FCPA) of 1977 and the corresponding amendments set forth by the Omnibus Trade and Competitiveness Act of 1988 and Amendments of 1998 have tremendous ramifications for U.S. multinational companies at large, their subsidiaries, and foreign partners.  While the main purpose of the original policy was to make it “unlawful to bribe foreign government officials to obtain or retain business”, the many statutes, their exceptions, and enforcement have gone through several iterations and most recently expanded jurisdiction of the law to non-U.S. territories.  In bribery cases, several conditions involving the perpetrator, intent of the act, and the recipient of the bribe, must be met by the “corrupt act” for a breach to be founded. Similar stipulations apply to illegal payments made to third parties, specifically if such payments are used to filter or launder monetary bribes for a government official. The penalties levied if such conditions are proven, however, serve as compelling deterrents against fraudulent acts in global business practices (US Dept. of Justice, Lay-Person’s Guide).

The FCPA was passed unanimously in both chambers of Congress and subsequently signed into law by President Jimmy Carter in 1977. Many initiatives thenceforward have been undertaken to broaden global cognizance of its provisions for US multinational corporations and to increase compliance in international operations.  To facilitate understanding and provide accessible resources, related responsibilities have been divided among the U.S. Department of Justice, the U.S. Department of Commerce, and the Securities and Exchange Commission.  The Department of Justice has even translated the FCPA into over a dozen languages, including Malay, the official language of Malaysia (US Dept. of Justice, Statute and Regulations).  Other references for guidance, such as written responses from the Attorney General to FCPA...