Business in a Global Society: A Guide to Understanding the Foreign Corrupt Practices Act
Table of Contents
- History of the Foreign Corrupt Practices Act (FCPA)
- FCPA Overview
- Anti-Bribery Provisions
- Enforcement of the Anti-Bribery Provisions
- Accounting Provisions
- Know Your Business Partners
- Mergers and Acquisitions
- Key Elements of an Effective FCPA Compliance Program
- Current FCPA Trends
- Additional Resources
History of the Foreign Corrupt Practices Act (FCPA)
In the mid 1970s, the Securities Exchange Commission (SEC) discovered that 450 companies had made questionable or illegal payments in excess of $300 million to foreign public officials. In 1977, Congress enacted the Foreign Corrupt Practices Act (FCPA) as a means to stop the bribery of foreign officials and in an attempt to change the way U.S. firms conducted business overseas. In the 1980s, Congress began to realize that American companies were at a disadvantage as foreign companies routinely paid bribes and could even deduct them as a business expense. As a result, the U.S. government sought to negotiate an agreement with its major trading partners to pass similar legislation. In 1997, the United States and 33 other trading partners signed the Organization of Economic Cooperation and Development (OECD) Convention on combating bribery of foreign public officers in international business transactions.
The FCPA contains two complementary sets of provisions: the antibribery and books and records provisions. The first prohibits the bribery of foreign public officials. The second requires publicly traded companies to maintain an adequate system of internal accounting controls and to keep proper accounting standards that provide an accurate and fair reflection of the transactions of the corporation.