Complying with the Foreign Corrupt Practices Act (FCPA)

Is your organization complying with the Foreign Corrupt Practices Act (“FCPA”)? If you are like many executives, business owners and/or managers, you may not even know what this law is, nor that it prohibits certain forms of payments to foreign government officials.  You also may not know that substantial penalties (including jail time) are imposed if your business fails to comply with FCPA requirements.  

What is the FCPA? 

The FCPA, 15 U.S.C. § 78dd-1 et seq., is a United States criminal law that prohibits bribery of foreign government officials and requires companies to maintain accurate records.  The FCPA was enacted for the purpose of outlawing certain classes of persons from making payments to foreign government officials for the purpose of obtaining new business or retaining existing business.   All United States companies are subject to the FCPA, regardless of where they are doing business. 

The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls. 

Who is Charged with Enforcing the FCPA and What Are the Penalties for Violation of this Law? 

Enforcement of the FCPA is a priority for the US Department of Justice, the Securities and Exchange Commission (SEC) and many foreign governments.  Penalties for violating the FCPA are severe, and include the following: 

 Corporation:  

  • $2 million criminal fine per violation or twice the gain (in reality, fines can be tens of million of dollars); 
  • Debarment (co. cannot do business with the government); 
  • Disgorgement of profits from unlawful business; 
  • Expensive investigations and legal fees; and 
  • Terrible press coverage. 

Individual:  

  •  up to 5 years in prison per violation (in some recent cases, jail terms have been even higher due to multiple violations); 
  • $100,000 criminal fine per violation; 
  • $10,000 civil penalty or gross gain; 
  •  The fine shall not be paid, directly or indirectly, by the company; and 
  • Loss of job.  
Online Training to Prevent FCPA Violations 

Training managers and anyone in your organization that does business with foreign officials on the provisions of the FCPA is essential to protect them and the company from accusations of illegal business practices.   

Syntrio, Inc. specializes in providing business Ethics and HR Compliance Training.  Contact us today at 888-289-6670 to learn more about our FCPA: Anti-Corruption and Bribery course.  

 

Posted in Compliance Training, Managing Within the Law and tagged , , , , , .