The anti-bribery provisions of the FCPA make it unlawful for a U.S. person, including issuers of securities regulated by the SEC and domestic concerns, as well as certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.4 The FCPA applies to individuals, firms/corporations, officers, directors, employees, agents of firms/corporations and any stockholder acting on behalf of a firm/corporation.5 The FCPA also applies to foreign firms and persons who take any act in furtherance of a corrupt payment while in the United States.6 U.S. parent corporations are liable for the acts of foreign subsidiaries where they authorize, direct or control the activity in question.7
Notably, the FCPA applies to payments to any public official, regardless of rank. The payment can be money or anything of value, and it must be made with corrupt intent. It is also a violation of the anti-bribery provisions to make a payment to an intermediary or third party while knowing that all or a portion of the payment is designed to influence a foreign official.8
The anti-bribery provisions exclude payments to facilitate or expedite performance of “routine governmental action” such as granting permits or licenses; processing visas or work orders; or providing police protection, telephone service, power or water.9 The FCPA also provides an affirmative defense where a payment made to a foreign government official is lawful under the written laws of the foreign official’s country, or where a payment was a reasonable and bona fide expenditure directly related to the promotion, demonstration or explanation of products or services or to the performance of a particular contract between a company and a foreign government.10
Criminal penalties for violating the anti-bribery provisions for corporations and other business entities include a fine of up to $2 million; directors, officers, employees, stockholders and agents are subject to a fine of up to $100,000 plus up to 5 years imprisonment. No corporate indemnification is permitted for fines against individuals.13
Aside from the threat and costs of multijurisdictional investigations and litigation, in-house counsel are particularly concerned with the exorbitant dollar amounts disgorged, the considerable size of criminal fines,16 payments to the SEC, monitoring arrangements with the DOJ if a plea deal is struck, the costs of internal investigations which can run from $2 million to $20 million, and damage to reputation/brand image.