If you have made payments to government officials in other countries and are now being investigated, you may be in violation of the Foreign Corrupt Practices Act of 1977. While not all payments or entities are bound by the act, it's a good idea to understand what it is and what it aims to protect.
The Foreign Corrupt Practices Act of 1977 was created to make it illegal for certain people and entities to provide payments to foreign officials in exchange for retaining or obtaining their business. Essentially, it is not legal to bribe a foreign official to get him or her to work with your company or to keep him or her in support of your company.
What does the Foreign Corrupt Practices Act specifically ban?
The FCPA bans the use of mail to transfer funds to other countries for the above purposes. It also prohibits any means of instrumentality of interstate commerce to create an agreement to pay, to offer a payment, to make a payment, or to authorize a payment or the transfer of assets with the knowledge that the asset will influence a foreign official.
Whom does this act apply to?
All U.S. citizens are bound by the FCPA. Some foreign issuers of securities are also bound by the rules of the FCPA. In 1998, the act was amended. Now, any foreign firm or person who furthers a corrupt payment within the United States is also included in those bound by the FCPA.
The FCPA also requires companies with securities in the United States to keep accurate books and accounts. Additionally, the companies need to have internal accounting controls to continue working within the United States.
If you are accused of violating the FCPA, or if you believe you may be under investigation, it is crucial to seek legal intervention as soon as possible. In many cases, it is possible to prevent the filing of charges or to have existing charges dropped with the help of an experienced white-collar attorney.