In order to assist in obtaining or retaining business for or with, or directing any business to, any person. A violation of the FCPA consists of five "elements." That is, a person or organization is guilty of violating the law if the government can prove the existence of: The DOJ interprets the FCPA to confer jurisdiction whenever a foreign company or national causes an act to be done within the territory of the United States by any person acting as the agent of that company or national. enforcement authorities have charged and prosecuted a number of foreign corporations for bribing non-U.S. corporations and nationals can be held liable for bribes paid to foreign officials even if no actions or decisions take place within 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 United States or organized under the laws of a state of the United States or a territory, possession, or commonwealth of the United States. "Domestic concerns" is a broader category, encompassing any individual who is a citizen, national, or resident of the United States. An "issuer" is any company that has securities registered in the United States or is otherwise required to file periodic reports with the SEC. "issuers" and "domestic concerns" must obey the FCPA, even when acting outside the country.
Who Is Covered by the FCPA? The FCPA applies to two broad categories of persons: those with formal ties to the United States and those who take action in furtherance of a violation while in the United States. The latter are designed to prevent accounting practices designed to hide corrupt payments and ensure that shareholders and the SEC have an accurate picture of a company's finances. The FCPA contains both antibribery prohibitions and accounting requirements. With this knowledge and commitment to ethical business practices, an organization can implement an effective compliance program to avoid the pitfalls of international corruption. Finally, the managers who run the organization must be able to recognize "red flags"-circumstances under which the risk of corrupt practices is high and enforcement authorities expect corporations to be particularly vigilant. Leaders and legal advisors must also remain up to date on trends in enforcement. regulations against money laundering, racketeering, and conspiracy. In order to minimize the risks posed by foreign bribery, an organization must have a clear understanding of the practices prohibited by the FCPA and other applicable laws, such as U.S. The United States Department of Justice ("DOJ") and the Securities and Exchange Commission ("SEC") are leading the international fight against corruption by increasing the number of investigations, settlements, and prosecutions for violations of the Foreign Corrupt Practices Act ("FCPA" or the "Act").īecause of this increased enforcement activity, managers and directors who run multinational corporations are rightfully concerned about their compliance efforts. Corruption poses a significant legal and economic risk for corporations doing business around the world, particularly in developing and transitioning countries.