Last Updated on: 14th March 2023, 02:45 pm

Foreign Corrupt Practices Act: Protecting Businesses from Corruption and Bribery

Introduction

The Foreign Corrupt Practices Act of 1977, as amended, United States Code Title 15 Sections 78dd–1 et sequitur (15 US Code 78dd–1 et seq), is a crucial law that aims to safeguard businesses from corruption and bribery. At Spodek Law Group, we understand the complexities of this law and are here to assist individuals and organizations who may be at risk of exposure to corrupt practices. Our experienced attorneys, led by Attorney Todd Spodek, are well-equipped to handle any legal situation related to the Foreign Corrupt Practices Act.

The Anti-Bribery Provisions

The anti-bribery provisions of the Foreign Corrupt Practices Act prohibit certain individuals and entities from making payments to foreign government officials to obtain or retain business advantages or opportunities. To ensure compliance, it is crucial to understand that the law prohibits the willful use of the mails or any instrumentality or medium of interstate commerce to make any offer, payment, promise to pay, or authorization to pay money or anything of value to any person to influence a foreign official to violate a legal duty or to secure any improper advantage in obtaining or retaining business for or with any person.

Expanded Scope of the Anti-Bribery Provisions

Since 1977, the anti-bribery provisions have applied to all Americans and to certain foreign issuers of securities. Since 1998, they have also applied to foreign firms and persons who act to cause corrupt payments to occur within the USA. This expanded scope highlights the importance of having a deep understanding of the law to avoid any potential violations.

Accounting Requirements

In addition to the anti-bribery provisions, the law also requires companies with securities listed in the USA to meet accounting requirements (15 US Code 78m). These requirements are designed to operate in tandem with the anti-bribery provisions to ensure that corporations (a) make and keep books and records that reflect corporate transactions accurately and fairly and (b) maintain adequate internal accounting controls. At Spodek Law Group, we have the experience necessary to handle the complexities of the accounting requirements to ensure compliance and avoid any potential violations.

Enforcement

Enforcement of the Foreign Corrupt Practices Act is a high priority for both the United States Department of Justice (DOJ) and the United States Securities and Exchange Commission (SEC). In 2010, the SEC Enforcement Division created a specialized enforcement unit for enhanced deterrence of American businesses that might bribe foreign officials to obtain or retain government contracts and other business arrangements. Violations of the law may incur hefty fines and potential jail time. For example, an anti-bribery violation by a company director, officer, or stockholder may result in a fine of up to $100,000 and up to five years in prison per 15 US Code 78dd-2(g)(2)(A), 78dd-3(e)(2)(A).

Civil Enforcement Actions

In recent years, the SEC has charged several companies with violating the law, including Goodyear Tire & Rubber Company and Avon Products Inc. Goodyear agreed to pay $16 million, and Avon agreed to pay $135 million to settle the charges against them. These financial penalties demonstrate the severe consequences of violating the law and the importance of having skilled legal counsel to avoid any potential violations.

Attorney General Advisory Opinions

The subject matter of the law is complex, and its provisions can seem arcane and unclear. To help organizations and individuals at risk of exposure to corrupt practices, the DOJ has established a Foreign Corrupt Practices Act Opinion Procedure, as provided expressly by 15 US Code 78dd–(e), promulgated in the Code of Federal Regulations at Title 28 Part 80 (28 CFR Part 80). The procedure offers access to opinions of the Attorney General as to whether certain specified, prospective conduct would be unlawful under present enforcement policy on the anti-bribery provisions of the law.

Abundance of Caution

At Spodek Law Group, we understand the risks involved in potential violations of the Foreign Corrupt Practices Act. The DOJ recommends consultation with legal counsel whenever there is any question about whether contemplated conduct would be in complete compliance. We encourage consideration of the use of the opinion procedure, in which the best way to proceed is with skilled, experienced trial counsel, former prosecutors who are competent, comfortable, and confident in courtrooms and fully familiar with every intricacy and pitfall of the law’s provisions.

Expert Legal Assistance

At Spodek Law Group, we have a deep understanding of the Foreign Corrupt Practices Act and are here to assist individuals and organizations who may be at risk of exposure to corrupt practices. Our experienced attorneys, led by Attorney Todd Spodek, have the knowledge, expertise, and professionalism to handle any legal situation related to the Foreign Corrupt Practices Act. We understand the importance of compliance with the law’s provisions and the severe consequences of potential violations.

Conclusion

Don’t risk violating the Foreign Corrupt Practices Act. Call us today for a risk-free consultation and expert legal assistance. Let us help you navigate the complexities of the law and protect your business from corruption and bribery. With Spodek Law Group, you can rest assured that you have the experience and expertise necessary to handle any legal situation related to the Foreign Corrupt Practices Act.

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Table of Penalties for Violations