THE FOREIGN CORRUPT PRACTICES ACT OF 1977

The Foreign Corrupt Practices Act of 1977

The Foreign Corrupt Practices Act of 1977

The Foreign Corrupt Practices Act of 1977

In 1977, the Government of the United States enacted the "Foreign Corrupt Practices Act" (FCPA) to establish criminal and civil penalties to be imposed on companies or nationals of the United States who pay or promise bribes wine to foreign officials to enter into or retain business. The number of investigations and prosecutions under the FCPA by the Department of Justice of the United States and the SEC has increased considerably in recent years, increasing in effect from 9 in 2003 to 91 in 2008. The law has two parts: the first affects the anti-corruption provisions, which apply to issuers in the United States, the legal and natural persons as well as U.S. foreign and second, provisions for records and files, which apply only to issuers (Bialos & Jeffrey, 1997).

Therefore, even if the FCPA is a law of the United States, companies and organizations in America must assess the risks of non-compliance with the FCPA if the following conditions are met:

They hold a bank account in the United States;

Their shares are traded on a U.S. stock exchange;

They rely on directors or officers based in the United States.

In addition, Canadian companies should be aware that the term "foreign official" in the FCPA has a rather broad, including a business owner who is also Finance Minister of the country concerned or a doctor employed by an agency owned or managed by the state. As housing enforcement under the FCPA and the amount of penalties imposed is constantly increasing, it is important that companies know how to reduce risks and implement effective anti-corruption controls (Jacoby & Neil, 1977).

FCPA helps to develop and implement compliance initiatives in the fight ...