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Foreign Corrupt Practices Act (FCPA): An Overview

The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. (“FCPA”), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.

The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.

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More Asian nations passing own anti-corruption laws, says report

Several Asian jurisdictions have passed legislation similar to the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA) in recent years as part of a bid to ensure the operations of multinational organisations are adequately regulated, according to a new report. The report, issued by law firm Herbert Smith in Hong Kong, found that while the FCPA and UKBA remain the key drivers of anti-corruption reform in Asia, firms had to deal with an increasing amount of similar local regulation.

FCPA US and Non-US Defendants

U.S. FCPA – US and Non-US Defendants

The highest profile anti-corruption statutes in the ‘enforcement world’ remain the FCPA and the UKBA, which are foreign anti-bribery statutes that are extra-territorial in nature and which have been the subject of much attention in the media, said Kyle Wombolt, head of Herbert Smith’s Asian investigations and compliance practice in Hong Kong.

“While these statutes have been the focus of most of the attention, our report also focuses on the domestic enforcement environment across the different Asian jurisdictions. The reason for the local focus is that, in recent years we have seen increased attention to the operations of multinational organisations by a number of domestic regulatory and prosecutorial agencies in Asia,” he told Thomson Reuters. “Many of these organisations are now paying much more attention to the local regulatory environment.”

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Myanmar’s clothing industry has a hard road ahead

Jun 7, 2012. The clothing industry in Burma (Myanmar) looks set to grow as the country once shunned by the West starts to reform. But there is still a long way to go if it is to become the new Asian outsourcer of choice.

Before US sanctions were imposed in 2003, the US was the premium buyer of Burmese textiles.

U.S. Imports of clothing produced in Burma are still banned under the Burmese Freedom and Democracy Act of 2003. It’s up for renewal this summer, although it may now be allowed to lapse.

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Walmart’s Debacle – What PE Firms Can Learn

The recent allegations against Wal-Mart that the company engaged in bribery to assist in its expansion efforts illuminates the great challenges facing multinational companies transacting overseas.

Tyson Foods, Diageo, IBM and Pfizer have been alleged to violate the Foreign Corrupt Practices Act (FCPA).

And while these larger corporations have been subject to scrutiny, the Department of Justice is sure to be taking a closer look at smaller companies too as it ramps up its effort to clean its international house.

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Updated Walmart Statement in Response to Recent NY Times Article About Compliance with the U.S. FCPA

“Walmart has been working diligently on U.S. Foreign Corrupt Practices Act (FCPA) compliance and has a rigorous process in place to quickly and aggressively manage issues like this when they arise.

“In the last year, we have taken a number of specific, concrete actions to investigate this matter and strengthen our global FCPA compliance processes and procedures around the world and in Bentonville and Mexico.

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Updated Walmart Statement in Response to Recent New York Times Article About Compliance with the U.S. Foreign Corrupt Practices Act,” PR Newswire Press Release, Apr 24, 2012

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The Corruption Law that Scares the Bejesus Out of Corporate America (FCPA)

Walmart’s Mexican bribery scandal is shining the spotlight on the Foreign Corrupt Practices Act, an obscure law that’s become a bane for some of the world’s largest corporations.

Up until this past weekend, there was a very good chance that the average New York Times business page reader had never heard of the Foreign Corrupt Practices Act. It’s the sort of law that the public ordinarily doesn’t have much reason to think about, even as it keeps corporate lawyers and c-suite executives tossing in their sleep. But thanks to the the paper’s damning investigation into Walmart’s cover-up of bribery at its Mexican subsidiary, this low-key statute is suddenly getting its turn in the spotlight.

The statute, generally referred to as the FCPA, was passed in 1977 and bans individuals and companies from bribing foreign government officials to win business or influence their decision making. Those who run afoul of the law can face large fines or prison time. For decades after it was enacted, it was barely used. But in the last five years, it has evolved from an obscure vestige of the post-Watergate era into into one of the most talked about and feared laws in America’s board rooms.

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Weekly Update Apr 4: U.S. FDA Import Requirements, Cloud Computing, Total Rewards

Highlights

Tu, Apr 5 How to Meet U.S. Food & Drug Administration Import Requirements
Tu, Apr 5 Cloud Computing: Opportunities and Challenges in Vietnam
Tu, Apr 5 Legal Committee Monthly Meeting
We, Apr 6 Total rewards strategy for a diverse, intergenerational workforce
Sa, Apr 9 4th Annual Vietnam-U.S. Education Conference
We, Apr 13 University of Hawaii Executive MBA Information Session
We, Apr 20 Developing an Anti-Corruption Compliance Program
Southern Key Economic Region: Ports, Industrial Parks, and Other Infrastructure
Asia Development Bank: “Skills Enhancement Project” Loan to Vietnam, 2010-2016

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The UK’s new Bribery Act will come into force on 1 July 2011

Unlike the US Foreign Corrupt Practices Act (FCPA), the Act works to prohibit bribes in the private sector as well as in the public sector. Nor does the Act, unlike the FCPA, provide any exception for so called “facilitation payments” to officials to expedite routine non-discretionary governmental actions such as customs clearances etc. Accordingly, under the Act such payments are bribes and therefore a criminal offence.

Facilitation payments are prevalent in many parts of the world. The Guidance sets the UK’s approach to such payments in an international context. Their eradication is recognised internationally as a long term objective that will require economic and social progress and sustained commitment in those parts of the world where the problem is most prevalent. This laudable long term is of little practical help to businesses facing daily requests for such payments. All that the Guidance and prosecutors can do is to suggest that “prosecutorial discretion” will provide a protection against prosecution in situations where, for example, the payments were small in value and they were not systemic.

The foreign public official offence in the Act is particularly wide as it only requires prosecutors to show that a financial or other advantage was intended to “influence” the official, not that the intention was that the official would act improperly. The Guidance has gone some way to allaying fears that the provision of even a cup of tea to an official could amount to an offence. It makes it clear that reasonable and proportionate hospitality and promotional expenditure on public officials to promote a business, demonstrate its products or services or to establish cordial relations can be legitimate. However, the Guidance provides no “bright line” test and it is for individual businesses to assess their risks and practices in their particular circumstances.

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Weekly Update, Nov 22: Cai Mep Deep Water Ports, Thanksgiving Golf & Dinner


Highlights

Tu, Nov 23 Cai Mep Deepwater Ports: The Transit Hub in Southeast Asia
Th, Nov 25 AmCham Thanksgiving Turkey Shoot Scramble Golf Tournament
Th, Nov 25 AmCham Old-Fashioned Thanksgiving Dinner
Tu, Nov 30 Business Networking Night: Enabling a Resilient Business in HCMC
We, Dec 1 Human Resources Factors Influencing Investment in Vietnam
Sa, Dec 4 15th Annual Governors Ball
Tu, Dec 7 VN-US Business Forum: Yr-End Celebration Dinner – 15 Years
We, Dec 8 IT Business Networking Night: Retail Solutions
Tu, Dec 14 Annual General Meeting
AmCham Membership Directory 2011
Fr-Su, Jan 21-23 AmCham Dalat Winter Weekend

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Weekly Update, Nov 15: Consumer Trends, Total Rewards, Cai Mep Deep Water Ports, Thanksgiving Dinner


Highlights

Tu, Nov 16 Vietnam’s Consumer Trends
Tu, Nov 19, Vietnam’s 2010 Autumn Total Reward Survey Briefing
Tu, Nov 23 Cai Mep Port – a Transit Hub in Vietnam
Th, Nov 25 10th Annual Thanksgiving Turkey Shoot Scramble Golf Tournament
Th, Nov 25 Old-Fashioned Thanksgiving Dinner
Tu, Nov 30 Business Networking Night: Enabling a Resilient Business in HCMC
Sa, Dec 4 15th Annual Governors Ball
We, Dec 8 IT Business Networking Night: Retail Solutions
Tu, Dec 14 Annual General Meeting
AmCham Membership Directory 2011
Fr-Su, Jan 21-23 AmCham Dalat Winter Weekend

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