Primer: Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) is codified at 15 U.S.C. §78dd-1, et. seq. [See also, Section 30A of the Securities & Exchange Act of 1934.] The FCPA has two primary sections. The first section makes it illegal for U.S. persons, including U.S. companies and their subsidiaries, officers, directors, employees and agents, and any stockholders acting on their behalf, to bribe foreign officials. The anti-bribery provisions of the FCPA make it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person. Since 1998, the FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States.
The second section requires U.S. companies and their subsidiaries to keep accurate and complete books and records and to maintain proper internal accounting controls. The FCPA 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, require corporations covered by the provisions to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls.
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