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Foreign Corrupt Practices Act

NCJ Number
American Criminal Law Review Volume: 49 Issue: 2 Dated: Spring 2012 Pages: 825-862
James A. Barta; Julia Chapman
Date Published
38 pages
This article reviews the development of the Foreign Corrupt Practices Act (FCPA), with attention to its elements, available defenses, and possible civil and criminal penalties.
Congress enacted the FCPA in 1977, amending the Securities Exchange Act of 1934. Its passage followed an extensive Securities and Exchange Commission (SEC) investigation and voluntary disclosure program during the 1970s that revealed millions of dollars in bribes made by U.S. companies to foreign officials in order to secure business. Congress passed the FCPA in order to prevent such bribery and impose accounting requirements on certain securities issuers. Congress twice amended the FCPA, first in 1988 and again in 1998. The amendments created affirmative defenses and expanded the FCPA's reach to include some foreign nationals in order to encourage international anti-corruption efforts that would make global economic competition fair while penalizing countries that inject bribery and corrupt practices into global economic markets. The FCPA has two main provisions. First, the accounting provisions require regular reports to the SEC, mandate the maintenance of accurate records, and require the creation of internal compliance controls. These provisions apply to domestic and foreign companies traded on U.S. stock exchanges. Second, the FCPA's anti-bribery provisions criminalize the transfer of money or other gifts to foreign officials and political actors for purposes of influence intended to obtain or retain business. The anti-bribery prohibitions apply to activity by securities issuers, U.S. citizens and entities, and certain foreign nationals and entities. The FCPA creates one exception and two affirmative defenses to potential anti-bribery violations. The "grease payments" exception permits payments for routine governmental actions. The affirmative defenses remove liability for payments that are legal in the country in which they are made, or considered "reasonable and bona fide expenditures." 269 notes


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