Every company doing business abroad needs to be cognizant of the provisions of the Foreign Corrupt Practices Act (“FCPA”). FPCA was enacted in 1977 to make unlawful the bribing of foreign government officials in order to obtain or retain business. It prohibits paying, offering or promising to pay money or anything of value to a foreign official, foreign political party or party official or any candidates for foreign political office.
Last week, I noticed that the Criminal Division of the Department of Justice and the Enforcement Division of the Securities and Exchange Commission published a booklet on November 14, 2012 for American companies doing business abroad entitled A Resource Guide to the U.S. Foreign Corrupt Practices Act.
As stated in the Foreword, the Guide “endeavors to provide helpful information to companies of all shapes and sizes–from small businesses doing their first transaction abroad to multi-national corporations with subsidiaries around the world.”
The Guide covers the anti-bribery and accounting provisions under FPCA as well as provisions pertaining to money laundering and mail and wire fraud in other Acts. Violations can lead to civil and criminal sanctions, imprisonment, fines and penalties.
There is a Department of Justice opinion procedure which may be availed if a U.S. company is not certain if its prospective conduct would be violative of the anti-bribery provisions of FCPA. The Department of Justice will endeavor to render an opinion within 30 days of the submission of all required materials. This procedure is not available for speculative or hypothetical questions.
This 120 page document is a valuable resource for any company doing business abroad–whether veteran or beginner and whether in sales, manufacturing or other activity and whether alone or in a joint venture arrangement. Even companies dealing through sales agents and distributors need to examine their agreements to insure compliance with FCPA and whether they have effective compliance programs in place to insure foreign agents and distributors are aware of FCPA.
Obviously, there is more to FCPA that what is set out above. But awareness of the potential problem is the first step to avoid the issue.
Michael W. Margrave