Thursday, December 16, 2010

FCPA Act Anti-bribary provisions

1977 Congress passes FCPA act to stop bribery and restore public confidence in U.S. business systems.
it has 2 sections Anti -Bribery and accounting provision.
Anti-Bribery provison is enforced by DOJ (department of justice) and it helps in Prohibiting corrupt payments (bribes) to foreign government officials, political parties, party officials and candidates in order to obtain or retain business
It has five elements of violation

Recent News - 

SEC Asks Tesco to Retain FCPA Compliance Documents

1- Who comes in its purview :–public companies filing periodic reports with SEC
–Any U.S. citizen, national or resident
- Any corporation, partnership, association, unincorporated organization & sole proprietorship with principal place of business in U.S. or organized in a U.S. state
- If a bribe occured within U.S. then it must use of U.S. mails, interstate telephone, facsimile, wire transfer or interstate or international
- If a bribe occured outside the U.S. then it is not subjected to such requirements
–Foreign companies & nationals if they cause, directly or indirectly through agents, an act in furtherance of a bribe to take place within the U.S.
–U.S. parent corporations if they authorize, direct or control questionable activity of foreign-incorporated subsidiaries
–U.S. citizen & residents employed by or acting on behalf of foreign-incorporated subsidiaries

2- Intent - Payment must be intended to cause foreign official to use his/her influence or misuse his/her position to improperly direct business to payer or some other person.
3-Payment - FCPA violation occurs if there is: A payment or authorization of a payment, An offer to pay or , A promise to pay but there is no minimum value.
4 - Recepients
FCPA applies to:
•Foreign official - Includes officer or employee of a foreign government or public international organization, regardless of rank or position
•Member of a royal family
•Official of state-owned business enterprise?
•Foreign political party or party official
•Candidate for foreign office
5 - Business Purpose
Purpose of payment must be to assist in obtaining or retaining business. However, business need not be with the foreign government, e.g. bribe is made to foreign government official to pressure a private in-country business to award a contract to a U.S. company.

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