The Foreign Corrupt Practices Act

Bribery weakens competition and diminishes free trade which can affect companies, shareholders, and stakeholders. Jacob Franklin knowingly extended bribes to governments and contractors while knowing it was against company policy. Jacob engaged in bribery even though he knew it was wrong because he was advised that it was common practice at Richard Drilling. “In 1977, President Carter signed the Foreign Corrupt Practices Act (FCPA). The law made it illegal to bribe foreign officials. The maximum punishments for violators were set at $100,000 and 5 years in jail. Companies can be fined millions” (Bredeson, 2012, p.301). Not only was extending the bribe against company policy, it was against law and could cost Jacob and Richardson Drilling money and freedom.

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.

With my limited knowledge of the act, I would agree with many corporations that the FCPA seems to apply to a very broad range of situations that a company could find itself in and it does not seem to have clear guidelines. Corrupt acts include not only monetary bribes, but also “anything of value” (Wikipedia) which is intended to obtain a business advantage such as leisure travel, gifts, entertainment, real estate, or even student internships (SEC Spotlight). Foreign officials are not explicitly defined in the act, and can include the obvious political officials, candidates, parties, but also some not so obvious persons such as doctors or employees of the United Nations (Wikipedia). The accounting standards seem to be clearer, things need to

The FCPA explicitly state that it is illegal for foreign business entities and individuals to engage in unlawful practices that include, making payments to foreign officials in an effort to attaining or retaining business (DOJ.gov, 2016). This is the United States law and holds true for Chinese government healthcare officials who worked under the reformed Healthcare system.

Before 1998 any foreign enterprise or foreigner was not limited by FCPA except foreign enterprise issuers. But the amendment of FCPA in 1998 greatly extended the jurisdiction of U.S government. If any independent foreign enterprise or individual directly or through agent had bribery on foreign officials in U.S they would violate the regulations of FCPA. Except that all the issuers above mentioned, domestic enterprise or employee in foreign enterprises, senior staff, directors, shareholders and agent were restrained by the law. The ministry of justice was authorized to convict the employee of enterprise according to regulations of FCPA whether the enterprise was guilty or not.

Moreover, the Foreign Corrupt Practices Act makes it unlawful for certain classes of people and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provision of the FCPA prohibits the willful use of the mails or any means of instrumentality of interstate commerce to be corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money on anything of value to any person. While knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official. Through his or her official capacity inducing the foreign official to do or omit to do an act in violation of he is or her lawful duties, or to secure any improper advantage in order to

America has always been a land of freedom, prosperity, and rules. 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.

This essay requires that I identify the main provisions of the the Foreign Corrupt Policy Act (FCPA) and then set forth the manner in which American businesses can comply with this act so as to compete with foreign businesses. The FCPA was enacted in 1977 during the term of President Jimmy Carter and is codified at 15 U.S.C. Sections 78-dd-1 et. seq..

The Foreign Corrupt Practices Act (FCPA) of 1977 and the corresponding amendments set forth by the Omnibus Trade and Competitiveness Act of 1988 and Amendments of 1998 have tremendous ramifications for U.S. multinational companies at large, their subsidiaries, and foreign partners.  While the main purpose of the original policy was to make it “unlawful to bribe foreign government officials to obtain or retain business”, the many statutes, their exceptions, and enforcement have gone through several iterations and most recently expanded jurisdiction of the law to non-U.S. territories.  In bribery cases, several conditions involving the perpetrator, intent of the act, and the recipient of the bribe,

However, they are also its greatest risk. Additional surveillance over employees is essential when it comes to engaging in risky activities. BHP Billiton’s employees did not receive proper training. Training is a preventive control to combat high-level inherent risk activities such as bribery. Employees should be well-versed in company policy because their actions may incur liability under the FCPA (U.S. Department of Justice et al., 2012). The hospitality applications in the BHP case highlight this issue. BHP Billiton’s failure to properly account for these applications helped facilitate a bribery scheme. As a consequence, the company faced repercussions in the form of a large monetary fine and mandatory anti-corruption training (U.S. Securities and Exchange Commission,

The first part of FCPA applies to all U.S. companies and their officers, directors, employees, stockholders, and agents. Agents can include third party agents, consultants, distributors, joint-venture partners, and others. This part prohibits the bribery of most officials of foreign government if the intend of a payment is to obtain business opportunities.

Bribery has become a common term in the corporate world, specifically when international business deals are discussed. Until 1977, it was legal in the United States to bribe foreign officials in order to receive preference or a better business deal. But, the passing of the Foreign Corruption Practices Act of 1977 and its subsequent amendments made it a criminal act for any organization within the U.S. or foreign organization doing business in the United States, to practice any form of bribery and also required the President of the United States to engage other nations in creating similar laws. Since, many nations have chosen to band together against bribery and have formed the Organization for Economic Cooperation and Development that ultimately created the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. This now makes it illegal to practice bribery in any of the countries that are part of this organization. While the United States and the world has come a long way in stamping out bribery, there are still some organizations that think they can get away with it but end up with massive fines and prison time. But, with so many nations banding together, one can still be hopeful for a world in which we can do business ethically with other ethical businesses around the world.

Interior control is a key component of the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act of 2002, which required upgrades in inward control in United States open companies (Meaghan and Nick, 2012). For the most part, setting objectives and goals, thinking of arrangements, spending plans and different desires set up a criteria for control (Mattila, 2007). Inside administration control includes associations' structure, work and power streams, people and organization information systems expected to help the affiliation accomplish specific destinations. Legitimate execution incorporates the veritable yield or results of a relationship as measured against its normal yields. It incorporates the limit of a relationship to

This likewise applies to outside firms and people who take any demonstration in duration of such a degenerate installment while in the Assembled States. This demonstration was executed by "Congress to convey an end to the payoff of outside authorities and to reestablish open trust in the respectability of the American business framework" ("FCPA and AntibriberyMeasures". Exim.gov. Web. 23 July. 2010.)

By taking such unethical decisions, Wal-Mart de Mexico violated laws from both Mexico and the U.S. Mexico has been known as a country where foreign companies have a significant risk for corruption. Bribery is common in many parts of the country, however, “attempted corruption, bribery, extortion, abuse of office, bribery of foreign public officials and facilitation payments are criminalized under Mexico’s Federal Penal Code” (Business Anti-Corruption Portal). As for the United States, the company violated the Foreign Corrupt Practices Act (FCPA), more specifically the Anti-bribery provision. This provision states “A company cannot corruptly make an offer, promise, or payment of anything of value to a foreign government official or politician