Foreign Corrupt Practices Act

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newratings.com  Dec 22  Comment 
PETAH TIKVA (dpa-AFX) - Teva Pharmaceuticals Industries Ltd., (TEVA) Thursday announced that it has agreed with U.S. Department of Justice and Securities and Exchange Commission to resolve an investigations into conduct relating to three countries...
Insurance Journal  Feb 17  Comment 
Berkley Life Sciences, a W. R. Berkley Co., has launched Corporate Lifeline, a new coverage for life science companies seeking to effectively address increased government scrutiny of company practices under the Foreign Corrupt Practices Act. In...
New York Times  Mar 4  Comment 
Information disclosed last week about two prominent investigations are more evidence of how mindful companies need to be about the antibribery law.
New York Times  Apr 30  Comment 
Though business groups are pushing for changes in the Foreign Corrupt Practices Act, recent scandals may put legislative efforts to change it on the back burner.
Insurance Journal  Sep 16  Comment 
The U.S. Chamber of Commerce has put reshaping a U.S. anti-bribery law near the top of its legislative wish list, setting up a battle pitting the powerful business lobby group against supporters of the statute who say it helps fight …
Insurance Journal  Jul 12  Comment 
Marsh has created a new form of insurance protection designed to provide coverage for Foreign Corrupt Practices Act (FCPA) investigations. Developed by Marsh’s Financial and Professional Liability Practice (FINPRO), FCPA Corporate Response...
StreetInsider.com  Mar 1  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Las+Vegas+Sands+%28LVS%29+Receives+Subpoena+from+SEC+Related+to+Concerns+Over+Foreign+Corrupt+Practices+Act/6331990.html for the full story.




 
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The Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.) or FCPA is a U.S. Federal Law primarily intended to prohibit corrupt payments to foreign officials and to maintain transparency requirements for business accounting as outlined by the Securities Exchange Act of 1934.

This law is enforced by the Department of Justice with a coordinate role played by the Securities and Exchange Commission (SEC). The Office of General Counsel of the Department of Commerce provides information to U.S. exporters concerning the details of the Foreign Corrupt Practice Act's requirements and constraints.[1]

History of the Foreign Corrupt Practices Act

SEC investigations in the mid-1970's revealed that numerous U.S. companies had engaged in a series of questionable actions, ranging from making payments in the excess of $300 million to foreign governments and their respective officials to circumventing the ministerial and clerical duties of a given country. [2] The FCPA was enacted by Congress in order to halt this bribery while simultaneously attempting to restore public confidence in the integrity of the American business system.[3]

The FCPA requires companies whose securities are listed in the United States to meet the accounting provisions outlined by 15 U.S.C. §78m.

Results of the Foreign Corrupt Practices Act

The FCPA has had a significant impact on the manner in which U.S. firms conduct their business abroad. Many firms, since the passing of the FCPA, have initiated detailed compliance programs so as to prevent infractions of the law through improper payments by its employees and agents.[4] Several firms have been subject to criminal and civil enforcement actions which have resulted in large fines, suspensions, debarment from federal procurement contracting, and jail time. Examples of companies that have faced enforcement actions as a result of the Foreign Corrupt Practices Act include:

Subsequent International Efforts for Normalizing Fair Business Practices

Concerns were raised that American companies would operate at a disadvantage after the passing of the FCPA compared to foreign companies who routinely engaged in various forms of bribery. Accordingly, in 1988, negotiations in the Organization of Economic Cooperation and Development (OECD) obtained the agreement of the United States' major trading partners to enact legislation similar to the FCPA. By 1997, in addition to the United States, thirty-three other countries had the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In coming years, the FCPA would also apply to foreign firms and persons who engage in any such corrupt action.[8]

Antibribery Provisions

Five elements must be met to constitute a violation of the Foreign Corrupt Practices Act[9]:

  1. Who-- The FCPA applies to any individual affiliated with or acting on behalf of a firm.
  2. Corrupt Intent-- Corrupt intent must be evident and payment must be intended to induce the recipient to misuse his official position to direct business wrongfully.
  3. Payment-- The FCPA prohibits paying, offering, promising to pay (or authorizing to pay or offer) money or anything of value.
  4. Recipient-- The FCPA applies to payments received by foreign officials, political parties, party officials, or candidates for foreign political office.
  5. Business Purpose Test-- The FCPA prohibits payments made in order to assist the firm in obtaining or retaining business for or with, or directing business to, any person.

References

  1. Lay Person's Guide to FCPA
  2. Ibid.
  3. Ibid.
  4. Ibid.
  5. SEC v. Lucent Technologies Inc., For Bribery in China
  6. Indictments allege bribes were paid for Kazakstan oil
  7. SEC SETTLES CHARGES AGAINST INVISION TECHNOLOGIES FOR $1.1 MILLION FOR VIOLATIONS OF THE FOREIGN CORRUPT PRACTICES ACT
  8. Lay Person's Guide to FCPA
  9. Ibid.
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