Essay about 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

OECD published Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents to prevent bribery and corruption. The aim of this convention was making the bribery of a foreign public official a crime under their laws (International Monetary Fund, OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 2001). This document recommends to member countries that:

Fraudulent financial reporting is one form of corporate corruption and may involve the manipulation of the documents used to record accounting transactions, the misrepresentation of accounting events or transactions, or the intentional misapplication of Generally Accepted Accounting Principles (GAAP) (Crumbley, Heitger, and Smith, 2013). Examples of fraudulent schemes befitting of this category abound and usually involve financial statement items that have been misclassified, omitted, overstated, undervalued, or prematurely recognized. One case involving CEO Bill Smith of Moonstay

When U.S business are thinking about going abroad, they need to be aware of the other country’s laws and regulations. “All businesses must, of course, follow the laws of the countries in which they are physically present and operating. Businesses may also be required, even in their foreign operations, to continue to follow certain laws of their home country. Also, businesses operating across national borders will also be subject to international law (Tony McAdams, 2014)”.

The Foreign Corrupt Practices Act has been pursued by government agencies recently as the SEC, the FBI, and Department of Justice are cracking down on international business corruption. Companies are working harder at expanding economically in the market by doing business with individuals and other companies in foreign countries. Foreign countries are not always in compliance with US laws and regulations, causing US companies who deal with them issues with compliance on the home front. Because of these ongoing issues congress decided to introduce the Foreign Corrupt Practices Act and to prosecute foreign companies for corrupt activities within the United States. The Foreign Corrupt Practices Act is a federal law that was amended in 1977,

The largest impact internationally has been the result of the awareness of the FCPA. Since the U.S. government enacted the FCPA, it has raised awareness in foreign countries, many of which have enforced their own anti-bribery laws and have also signed on to the Organization for Economic Co-Operation and Development’s (OECD) Anti-Bribery Convention to show their commitment to the regulations of the anti-bribery laws. The OECD actually has no authority to enforce legislation and relies on the member countries to regulate the anti-bribery law. Foreign companies who are associated with U.S. markets and foreign government officials are now aware of the consequences of violating the FCPA.

The Foreign Corrupt Practices Act of 1977- is a U.S. Federal Law that prohibits any U.S. citizen from bribing a foreign official for the purpose of obtaining

Under the Racketeer Influenced and Corrupt Organization Act (RICO) in a criminal or civil law suit a pattern of racketeering activity must be ascertained by proving at least two acts of racketeering activity have been performed within an interval of ten years. This law could not be upheld in Sedina, SPRL v Inrex Co., 473 US 479 (1985) as two predicate acts could not be maintained (Twomey, 2013).

The act requires management to disclose all material information or changes within their accounting processes. By requiring senior management to review the reports they are held accountable for the financial accounting of the firm, and procedures to prevent employees and other members within an organization from committing fraud or theft and management is legally responsible if material misstatements have been made. By making management accountable then they are less likely to commit fraud if faced with jail time. Management and stockholders frequently have different goals. Management often wishes to expand and use the company’s assets in different ways than a stockholder. Management’s accountability of the financial reports often helps encourage management to use company assets in appropriate ways. Disclosures were also a reduction in risk of fraud because all material information must be disclosed. By requiring this disclosure if a company’s net income increased this year due to a

Corruption is something that can hit businesses very hard. Foreign corruption used to be something that would hurt businesses majorly. Due to this The Foreign Corrupt Policies Act (FPCA) was signed into law on December 19, 1977 by President Jimmy Carter.

Many companies are trying to expand economically in the market by doing business with an individual or another company in foreign countries. These businesses are engaging in into using improper ways of payments that are leading to secret bribes to the foreign public officials. Foreign countries are not always in compliance with the laws and they tend not to follow them. Having these problems with the US and all the millions of dollars that have been passed they wanted to take a more affirmative approach and be able to correct the problem. That is when congress decided to introduce the Foreign Corrupt Practices Act to prosecute foreign companies for corrupt payments within the United States. The Foreign Corrupt Practices Act is a federal

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

While reading this case analysis, The Foreign Corrupt Practices Act came into discussion as an underlying factor in Weihardt’s decision. The Foreign Corrupt Practices Act was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. This practice applies to Weinhardt in the fact that he was given the opportunity to give Lee a bribe to obtain Lees’ business.

The unlawful use of a person’s position while in power leads to multiple problems with today’s government. The corrupt methods politicians use are ideas that are strictly in place for personal gain. Present throughout history and still prevalent within today’s world, government corruption has consisted of a number of negative issues including bribery, economic and social impacts, and the misuse of power. Government’s role within daily life has been shown to have negative effects as seen in many aspects of life as well as in literature.