To ensure compliance with the FCPA, companies should have policies to ensure that employees who have possible dealings with international matters have no knowledge of any activities that are unlawful under the FCPA.
What is the FCPA?
In response to illegal political contributions and bribery payments to foreign officials by large corporations in the 1970s, Congress enacted the FCPA in 1977 to prohibit foreign bribery. The FCPA consists of two parts: (1) an anti-bribery provision, and (2) for public companies, an accounting requirement.
Anti-bribery Provisions
The FCPA anti-bribery provisions make it illegal for any company, whether publicly traded or not, to bribe any foreign official for purposes of obtaining or retaining business. A foreign official is any officer or employee of a foreign government or any department or subdivision thereof; or any person acting in an official capacity for or on behalf of any foreign government or any department or subdivision of that foreign government.
In 1988, Congress amended the FCPA to allow for payments that facilitate, expedite, or secure the performance of routine governmental actions. Routine governmental actions are those that are commonly performed by foreign officials. Routine governmental actions do not include decisions by foreign officials that involve whether, or on what terms, to award new or continued business with a particular entity, or actions that involve discretion or encouragement of decision-making.
Accounting Requirement
The FCPA established record keeping and internal accounting control requirements. The accounting standards apply to all business activities, including domestic activities.
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