Foreign Corrupt Practices Act (FCPA) News and Updates

Background Information about the FCPA

Generally, the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA” or the “Act”) prohibits U.S. companies, their subsidiaries, as well as their officers, directors, employees, and agents from bribing “foreign officials” and also requires U.S. companies that issue debt or equity to maintain internal accounting controls and to keep books and records that accurately reflect all transactions.

Both the anti-bribery and the record-keeping and internal accounting controls provisions apply to worldwide operations. The FCPA is enforced jointly by the Securities & Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).

U.S. Department of Justice FCPA Information

U.S. Department of Justice: Lay-Persons’ Guide to the FCPA

U.S. Securities & Exchange Commission

Key Contacts regarding Anti-Corruption Efforts in Vietnam – to be provided

The FCPA Blog News and Views About The United States Foreign Corrupt Practices Act. There are as many as 70 investigations ongoing, not including “dozens of internal company probes that haven’t been reported to the government [yet], and may never be.”

FCPA News and Updates

Foreign Corrupt Practices Act (FCPA) investigations growing – are you at risk? FCPA legal conferences on corporate bribery ten years ago had maybe 60 people in the audience, and half were speakers from the various sessions. But in the fall of 2007, an FCPA conference had more than 400 people packed into the hotel ballroom. FCPA business is booming, advising multinational companies on how to design and implement compliance systems meant to deter and ferret out corrupt practices. 25 Apr 2008.

Bribery Abroad: Lessons from the Foreign Corrupt Practices Act Those involved in cross-border business, from directors in the U.S. to factory managers in Vietnam, now live and work by codes of conduct shaped by the FCPA. Avoiding the pitfalls of overseas bribery, and knowing how to respond if corrupt payments somehow happen, are required tools for international executives and managers, professionals and entrepreneurs. 18 Apr 2008.

Intel in Vietnam Vietnam, a country riddled with corruption, is set to be a major target for foreign investors. Intel is setting an impressive precedent with its commitment to do business cleanly. The world’s largest electronic components manufacturer, Intel, has pledged to build its $ 1 billion factory in graft-ridden Vietnam without corruption. The company has even signed an anti-corruption agreement with state-owned Saigon Hi-Tech Park (SHTP), where its largest chip plant will be located. 28 Feb 2008

U.S. firm to pay $ 300,000 penalty to resolve Foreign Corrupt Practices Act violations in India The firm has acknowledged responsibility for the actions of a subsidiary firm in India and its employees and agents who made various payments to officials of the Indian Railway Board (IRB), a government agency which is part of India’s Ministry of Railroads. These payments were made in order to: assist Pioneer in obtaining and retaining business with the IRB; schedule pre-shipping product inspections; obtain issuance of product delivery certificates; and curb what the subsidiary considered to be excessive tax audits. 14 Feb 2008.

Foreign Corrupt Practices Act: the Next Big Corporate Scandal? The Department of Justice and the Securities and Exchange Commission have picked up the pace of enforcement. The average number of FCPA criminal prosecutions and civil enforcement actions increased fourfold, and the average fine for corporate violators has steadily increased over the last several years. 2007 was a watershed year for FCPA enforcement for several reasons: Public companies disclosed over 50 pending government investigations relating to potential FCPA violations; enforcement actions brought by the DOJ and SEC doubled compared with the number brought in 2006; and enforcement actions brought against individuals hit an all time high. 29 Jan 2008.

Ethics must be global, not local The only way to build a great global company is with a single global standard of business practices, vigorously communicated and rigorously enforced. Applying “situation ethics” in developing countries is the fastest way to destroy a global organization. To sustain their success, companies must follow the same standards of business conduct in Shanghai, Mumbai, Kiev, and Riyadh as in Chicago.

Foreign Corrupt Practices Act Enforcement Trends in 2007 Signal Vigorous Enforcement U.S. Government enforcement of the FCPA will continue to send the message that *“bribery is bad for business.”* 2007 saw record fines, punishment of individuals with fines and jail sentences, international enforcement and cooperation, industry-specific investigations, and transactional due diligence reporting of FCPA violations. 25 Jan 2008.

Gauging Risk in Acquisition Due Diligence: The Hidden Deal Killer? (FCPA) Corruption is particularly challenging to investigate because of the generally limited evidence within the company itself. During an acquisition, forensic due diligence must proceed on a timeframe that does not threaten to derail the deal. 25 Jan 2008.

Film executive and spouse indicted under FCPA for corrupt payments to a Thai tourism official The Department of Justice announced the indictment of Gerald and Patricia Green, owners and operators of Film Festival Management (a private Los Angeles based private entertainment company), for conspiring to bribe an official with the Tourism Authority of Thailand (TAT) and for making improper payments to the TAT official in violation of the FCPA. According to the indictment, the Greens conspired to make and made more than $900,000 in improper payments to the TAT official in order to obtain film festival contracts and other contracts from TAT. According to the DOJ, the improper payments were part of an inflated budget scheme by which the TAT official would receive “commission” payments which were paid by the Greens to foreign bank accounts held by the TAT official’s daughter and friend. FCPA. 17 Jan 2008.

Lucent Technologies Pays US$ 1 Million Fine to Resolve Foreign Corrupt Practices Act Allegations According to the U.S. Department of Justice, the company provided travel and other things of value to Chinese government officials and improperly accounted for certain corporate expenditures on behalf of those officials. Lucent spent millions of dollars on approximately 315 trips for Chinese government officials that included primarily sightseeing, entertainment and leisure. 21 Dec 2007.