The Foreign Corrupt Practices Act (FCPA) is a United States federal law enacted in 1977, aimed at prohibiting the bribery of foreign officials for business purposes. The FCPA is designed to ensure fair competition by prohibiting U.S. individuals and entities from making corrupt payments to foreign government officials to obtain or retain business.
Under the FCPA, bribery is broadly defined and encompasses various forms of unethical behavior, including offering, promising, giving, or authorizing payments or other items of value to foreign officials, either directly or indirectly through third parties. It also includes using intermediaries or agents to facilitate bribes.
The FCPA requires companies to maintain accurate books and records and have internal accounting controls to prevent bribery and corruption. The law extends liability beyond just the bribe-giver to encompass anyone involved in the corrupt activity, including company executives and employees.
Enforcement of the FCPA is primarily carried out by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). Violating the FCPA can result in severe penalties, including hefty fines, imprisonment, and reputational damage for individuals and organizations involved in corrupt practices.
While primarily applicable to U.S. individuals and entities, the FCPA also has extraterritorial jurisdiction, meaning non-U.S. companies that operate in the United States or use U.S. financial institutions are subject to its regulations. The FCPA has significantly influenced global anti-corruption efforts and has encouraged other countries to adopt similar legislation.
