The Foreign Corrupt Practices Act

1028 Words Feb 4th, 2018 4 Pages
Save the times of the Wild West the United States government has attempted to exude a persona of ethicality. It seems that whenever a financial crisis/fraud/bribery scandal arises new laws are passed to help prevent future problems. Such is the case with the Foreign Corrupt Practices Act - passed with the purpose of keeping companies that do business in the US ethical in their business dealings. The main purpose of the act is to prevent companies from paying bribes to foreign officials, though there are other provisions included. It is only fitting that Wal-Mart, the largest retail store in the United States (2013 Top Global Retailers) has had allegations of wrongdoing related to the act. Wal-Mart was reported to have paid over $24 million in bribes to officials in Mexico. Why would Wal-Mart need to be bribing Mexican officials when they are so large and powerful themselves? And how did the US government get involved? These questions are the purpose of this paper.
In many foreign countries, there are barriers to entry. Some may be cultural, some may be political, and some may be both. Wal-Mart faced both as it tried to dominate the retail market in Mexico. “Greasing the palms” of government officials was a long-standing tradition for companies to help speed up (often significantly) the process of obtaining permits. Often countries such as Mexico have a stigma of their officials delaying services for…