The Rise and Rise of the FCPA

Mar 24, 2011. Deloitte’s fourth version of its ‘Look before you leap’ survey on global risk includes much more focus on the Foreign Corrupt Practices Act (FCPA), due in part to increased enforcement of the regulation over the past decade.

The regulation has been on the books for significantly longer – it was enacted in 1977 to make it unlawful to make payments to foreign government officials in order to obtain business – but given increased international trade and commerce over the last 30 years and, more cynically, the profitability enforcement has garnered for the government, Deloitte’s new focus makes perfect sense.

Almost two thirds (63 percent) of respondents, who included corporate executives, investment bankers, private equity executives and hedge fund managers, say the FCPA and anti-corruption legislation have led to aborted or renegotiated deals such as M&A, joint ventures and distributor relationships.

As the trend toward increased enforcement is expected to continue, insiders say it behooves US businesses to implement compliance programs, keep careful records and thoroughly train their employees if they want to remain competitive on the global stage. And even though anti-corruption legal experts agree the FCPA may hinder US competitiveness in certain respects, they also say it may point to the need for an international set of anti-corruption standards.

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