This month the Justice Department and Securities and Exchange Commission (SEC) released a guide on maintaining compliance with the Foreign Corrupt Practices Act (FCPA). The FCPA, which makes it illegal for certain individuals to make payments to foreign officials to assist in obtaining or retaining business, has been largely criticized for being vague and overly punitive. This new guide is to serve as a reference for businesses seeking to comply with the law and the prosecutors charged with enforcement.
The FCPA was passed by Congress in 1977 with the goal of prohibiting US businesses from corrupting foreign officials. With a new focus on combatting international corruption, enforcement of the FCPA has recently become a priority. US companies, who are exposed to both civil and criminal penalties for violations, have complained that the statute’s tremendous breadth allows many law enforcement authorities to be overly aggressive and creative in their prosecution methods.
As a result of US companies requesting a clearer structure on compliance and prosecution processes, a 130-page FCPA compliance guide was released. The guide covers topics such as:
- Who and what is covered by the FCPA’s anti-bribery and accounting provisions
- The definition of a ‘foreign official'
- What constitutes proper and improper gifts, travel and entertainment expenses
- Facilitating payments
- The hallmarks of an effective corporate compliance program
- The different types of civil and criminal resolutions available in the FCPA context
With the increase in enforcement, companies need to implement an effective FCPA compliance plan. Businesses must ensure that their plan stays current with changing regulations and is regularly audited. Employees must participate in regular training sessions and learn how to spot potential FCPA violations. With combatting corruption cited as the Justice Department’s highest priority, companies cannot afford to ignore FCPA compliance.
For more information, check out this article.
