The Foreign Corrupt Practices Act of 1977 (FCPA) is an American federal law that makes it illegal to bribe foreign government officials to obtain or keep business. This law covers both domestic and foreign companies and individuals that have operations in the United States. The FCPA was signed into law by President Carter in 1977 and has since been amended several times.
What Does the FCPA Prohibit?
The FCPA prohibits companies and individuals from offering bribes, or anything of value, to foreign government officials in exchange for business advantages. It also bans companies and individuals from engaging in accounting practices designed to deceive or conceal payments to such officials. The law also extends to cover actions taken to facilitate such arrangements, such as providing money to third parties to pay bribes or withholding records on payments to foreign government officials.
What Are the Penalties for Violations of the FCPA?
Violations of the FCPA can be subject to significant monetary fines, incarceration, or both. Depending on the severity and scope of the offense, individuals can face fines of up to $2 million and up to five years in prison. Companies can be fined up to $25 million for each offense.
How Does the FCPA Impact Businesses?
The FCPA has far-reaching implications for companies that do business internationally. Companies must ensure full compliance with the FCPA and other anti-bribery and corruption laws, or else risk severe repercussions from the U.S. government. As a result, companies have invested heavily in internal compliance programs and other measures designed to ensure that they are operating within the bounds of the law.
Conclusion
The Foreign Corrupt Practices Act of 1977 (FCPA) is a federal law that makes it illegal to bribe foreign government officials to gain or maintain business advantages. Those who are found in violation of the law can be subject to significant fines and even imprisonment. Companies must ensure full compliance with the FCPA in order to avoid severe penalties from the U.S. government.