Foreign Corrupt Practices Act Essay examples

1802 Words Apr 24th, 2011 8 Pages
Foreign Corrupt Practices Act In today’s ever changing and competitive modern world of business, it is critical for the companies to have activities internationally. In order to prohibit frauds and illegal activities, several acts and documents have been elaborated. One of the documents is Foreign Corrupt Practices Act that has been enacted in the 1970’s, as a result of SEC investigation of several U.S. companies that made illegal payments to foreign governmental officials, politicians, and political parties (Barnes 73). The FCPA had a critical impact on the way U.S. firms do business. Companies that did not comply with FCPA have been subject of criminal and civil enforcement actions that later resulted in huge fines and sentences for …show more content…
However, not all companies succeed to comply with all regulation, even though apparently it looks that all operations are lawful. For instance, United States vs. Kay case, No. 05-20604, 2007 U.S. could lead to broader enforcement actions under the FCPA (“FCPA Gets Broader Reach”). The company President (Douglas Murphy) and Vice President for Caribbean Operations (David Kay) at American Rice, Inc. took several steps in order to reduce sales and taxes costs to rice exported to Haiti. Even though their actions included paying officials to resolve tax issues, underreporting imports to reduce duties and taxes, paying officials to accept the underreporting, the district court granted a motion to dismiss the indictment, holding that the scope of FCPA did not extend to paying foreign officials for the purpose of reducing taxes. In contrast, the court of appeal reversed in United States vs. Kay, holding that bribes paid to foreign officials in consideration for unlawful evasion of sales taxes fall within FCPA. As a result, the jury found Kay and Murphy guilty of violating the FCPA by paying foreign officials to retain their business in Haiti (“FCPA Gets Broader Reach”). Moreover, the court rejected defendants’ argument that its interpretation of the FCPA extended criminal liability under the statute

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