Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (FCPA) is a key U.S. law enacted in 1977 that prohibits American companies, citizens, and certain foreign entities from bribing foreign government officials to gain or maintain business advantages. It reflects the U.S. commitment to promoting ethical business conduct worldwide and safeguarding fair competition. The law is enforced by the Department of Justice and the Securities and Exchange Commission and applies broadly to U.S. businesses and their representatives operating domestically and internationally.

What the FCPA Prohibits

The FCPA makes it illegal to offer, pay, or promise anything of value to foreign officials to influence their decisions or secure improper business benefits. This includes direct payments as well as indirect ones made through intermediaries. The law covers officials of foreign governments, political parties, and candidates, and extends to third parties when there is knowledge that payments will benefit a foreign official.

Accounting and Transparency Requirements

In addition to anti-bribery provisions, the FCPA requires publicly traded companies to keep accurate books and records and to maintain strong internal accounting controls. These rules help prevent companies from concealing corrupt payments through false financial records, ensuring greater transparency and accountability. To learn more about how the U.S. government combats global corruption and protects American business interests, see how the U.S. government fights global corruption to protect American business.

Enforcement and Penalties

Violations of the FCPA carry serious criminal and civil penalties enforced by the DOJ and SEC. The law applies to U.S. companies and individuals worldwide, as well as foreign companies trading securities in the U.S. This enforcement framework helps maintain a level playing field for American businesses in global markets.