If you are a U.S. company and conduct business abroad, then the Foreign Corrupt Practices Act should be on your radar. Our uniqueness in this area? Our lawyers are from the developing world and speak English, Portuguese, Spanish, French, and Bulgarian. We can detect “red flags” in legal and cultural terms, and we can train your international workforce in their own language.
The Foreign Corrupt Practices Act (“FCPA”) is a federal anti-bribery statute that applies to all U.S.-based companies, companies registered with the Securities and Exchange Commission, and U.S. citizens and residents that prohibits them from making corrupt payments to foreign officials in order to obtain or retain business or to obtain a competitive advantage. It also imposes accounting requirements upon certain U.S. companies to ensure that business transactions are accurately reflected in the companies’ books and records. The FCPA’s anti-bribery provisions are enforced by the Department of Justice, and the accounting provisions are enforced by the SEC.
The FCPA applies to virtually everyone in the United States, companies and individuals, who conduct business with a foreign official, including:
Issuers of securities. An issuer of securities is a company that either issued securities registered with the SEC or is required to file reports under section 15(d) of the Securities Exchange Act.
Domestic concerns. A domestic concern is a U.S. citizen, national or resident or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization or sole proprietorship that has its principal place of business in the United States, or is organized under the laws of a U.S. state.
Persons other than issuers or domestic concerns. Persons other than issuers or domestic concerns are natural persons other than a national of the U.S. or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization or sole proprietorship organized under the law of a foreign nation.
Companies are not insulated from FCPA liability if they use third-party intermediaries who bribe foreign officials.
Violations of the FCPA’s record-keeping and anti-bribery provisions can have harsh and expensive consequences for violators. The penalties range substantially, from a few thousand dollars to multimillion-dollar fines, and can include imprisonment and disgorgement. Notably, the FCPA prohibits domestic concerns from indemnifying their officers, directors, employees, agents or stockholders for a penalty imposed under the statute.
Every U.S. person or company who can conceivably encounter foreign officials in distribution chains, negotiations, or other business, charitable or commercial activity should consider putting into effect a compliance program carefully tailored to detect warning signs and identify areas of the business where potential violations are most likely to emerge.
