Foreign Corrupt Practices Act
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.
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.  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.
The FCPA requires companies whose securities are listed in the United States to meet the accounting provisions outlined by 15 U.S.C. §78m.
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. 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:
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.
Five elements must be met to constitute a violation of the Foreign Corrupt Practices Act: