The Foreign Corrupt Practices Act: recent cases and enforcement trends

Abstract

Purpose

The purpose of this article is to explain recent enforcement trends under the Foreign Corrupt Practices Act (FCPA), providing examples of recent cases.

Design/methodology/approach

The paper describes recent trends in FCPA enforcement, including increased enforcement by US authorities, greater vigilance by private industry, and global anti‐corruption efforts. It provides an overview of the FCPA, including the original reason why the Act was passed, its anti‐bribery provisions, the need to show corrupt intent, the interstate commerce requirement, exceptions and affirmative defenses, record‐keeping and control provisions, and penalties. It describes recent FCPA prosecutions and enforcement actions and draws conclusions on how to reduce FCPA risk.

Findings

The FCPA is a Watergate‐era law that was passed in response to disclosures by a number of large US corporations that they had made illicit payments to foreign government officials. The FCPA applies to bribes by any US issuer or domestic concern, paid to any foreign official, foreign political party, official or candidate, or official of a public international organization in order to assist in obtaining, retaining, or directing business. To prosecute, the government must show corrupt intent. The FCPA also contains provisions that require accurate record‐keeping and internal controls of US issuers. Violations of the FCPA are subject to both criminal and civil penalties.

Originality/value

The paper presents a thorough explanation, practical advice, and examples of recent violations and penalties by experienced lawyers specializing in FCPA compliance as well as white‐collar defense, securities regulatory matters, internal investigations, and anti‐money laundering.

Citation

Santangelo, B., Stein, G. and Jacobs, M. (2007), "The Foreign Corrupt Practices Act: recent cases and enforcement trends", Journal of Investment Compliance, Vol. 8 No. 3, pp. 31-55. https://doi.org/10.1108/15285810710824071