In Antibribery Law, Some Fear Inadvertent Chill on Business (Foreign Corrupt Practices Act)

The federal government in recent years has dramatically stepped up its pursuit of overseas bribery by corporations. The assault on corruption has spanned five continents and delivered steep fines—$800 million in one case alone.

But as the government cracks down on violators of the Foreign Corrupt Practices Act, some skeptics are pointing out potentially unintended consequences of the initiative that they say could cause corruption to proliferate in emerging markets.

Andy Spalding, a Fulbright scholar in India and former securities-fraud lawyer in Washington who is studying the impact of the FCPA in emerging markets, says enforcement of the act might be deterring corporations from investing in developing countries where corruption is rampant and bribes are commonly sought.

If U.S. corporations stop investing in emerging markets, then other nations that anticorruption advocates say aren’t as committed to fighting bribery will step up their investments, he says.

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Foreign Corrupt Practices Act (FCPA): News, Updates and Important Links