Foreign Corrupt Practices Act
Foreign Corrupt Practices Act In today’s ever changing and competitive modern world of business, it is critical for the companies to have activities internationally. In order to prohibit frauds and illegal activities, several acts and documents have been elaborated. One of the documents is Foreign Corrupt Practices Act that has been enacted in the 1970’s, as a result of SEC investigation of several U.S. companies that made illegal payments to foreign governmental officials, politicians, and political parties (Barnes 73). The FCPA had a critical impact on the way U.S. firms do business. Companies that did not comply with FCPA have been subject of criminal and civil enforcement actions that later resulted in huge fines and sentences for their officers and employees. In addition, SEC is responsible for all civil enforcement while Department of Justice is responsible for all criminal enforcement. As a consequence, firms developed specific compliance programs that helped to avoid such actions. Event though the FCPA was passed, the Congress became concerned that U.S firms were disadvantaged to foreign companies who periodically paid bribes. Therefore, after years of negotiation in 1997, United States and other thirty three countries signed the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transaction. The FCPA is enforced by Department of Justice and SEC and its violation often occur outside of the United States. Therefore, business people must be knowledgeable about all business activity, including overseas activities (“FCPA Enforcement”). It is imperative for the companies to comply with FCPA regulations. The Department of Justice requires the board of directors to exercise review of the compliance program and encourage ethical conduct and commitment to comply with the law. Therefore, it is crucial for firms to have written policies and standards to guide employees and
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