Under the 1977 Foreign Corrupt Practices Act, an individual or a business may face charges over allegations of bribery. Examples of bribery include offering foreign officials money, services or property in exchange for profitable contracts.
According to the Securities and Exchange Commission, FCPA violations may result in penalties such as disgorging profits and paying fines. Punishment could also include a requirement for a company to begin reporting its activities to an independent third-party supervisor.
Maintaining accurate records to remain in compliance and avoid charges
The FCPA requires companies that operate internationally to maintain detailed books and records. A company’s officers, managers and representatives all need to remain in compliance with the record-keeping requirements. If charges arise, a detailed log of verified contacts and authorized transactions may serve as proof of payments made for legitimate commerce.
The FCPA allows the U.S. Justice Department to charge a company for violations that take place in another country. As reported by CNBC, a multi-billion-dollar global nutrition company recently agreed to pay extensive civil and criminal charges. The agreement deferred prosecution against the company after it paid more than $123 million in profit disgorgement and a fine.
Alleged falsified transactions and “quid pro quo” benefits
Authorities alleged that the charged company’s representatives offered Chinese officials money in exchange for licensing and permits to sell its products. The company allegedly also falsified its records so that certain prohibited transactions appeared as though they had a legitimate purpose.
Other purported “quid pro quo” benefits offered to foreign officials included travel, entertainment and meals. Prosecutors claimed that the U.S. corporation allegedly intended to entice China’s government-controlled media to avoid reporting negative news about the company.