Foreign Corrupt Policies Act (FCPA)

Who does the FCPA Apply to?

"Issuer" or "domestic concerns"; US company or affiliated w/ US company working in a foreign country

What are the two US departments concerned with fighting corruption abroad?

1) Department of Justice 2) Securities Exchange Commission

What are the 3 exceptions to the FCPA?

1) Facilitating payments for ROUTINE gov't actions 2) Payments permitted by written laws (although no countries permit bribery) 3) Reasonable or bona fide expenditures; such as travel or lodging

What does the FCPA prohibit?

1) Payment OR promise of anything of value 2) to a foreign gov't official or affiliated 3rd party 3) with corrupt motive 4) for the purpose of influencing an action, act in violation of lawful duty, or secure an improper advantage 5) to assist business

What are the elements of a good corporate compliance program?

1) Policy of business ethics 2) Detailed procedures 3) Compliance training for all employees 4) Systems to detect + investigate violations + monitor effectiveness of compliance program

What are red flags?

1) Unusual payment patterns or financial arrangements 2) History of corruption (Corruption Perceptions Index for each country) 3) Prospective business partner rejects compliance provisions 4) Unusually high commissions 5) Lack of accounting transparency 6) Lack of qualifications for a prospective business partner 7) Recommendation of a company by a gov't official

Are foreign owned subsidies subject to FCPA rules?

Yes