The Importance of Understanding the FCPA

Category: Blogs
Author Name: TrainingABC
Posted: 09-05-2021 03:16 AM
Views: 2104
Synopsis: So, who does this apply to now, and how is bribery actually defined under this law? This article will lay out what you need to know, and why getting the proper training for FCPA is so critical for companies and individuals doing international deals.

Bribery is illegal in many forms, but the Foreign Corrupt Practices Act (FCPA) makes it punishable by law in the United States to engage in such acts with foreign entities.

What is the FCPA

The Foreign Corrupt Practices Act was passed by Congress in 1977 and was intended to stop the use of bribery to influence foreign officials.

Bribery Provisions:

There are a few key elements of bribery under the FCPA that makes bribery a crime to:

  1. Make a payment of, offer or promise to pay, or authorize payment of money or anything of value, directly or indirectly;
  2. To any foreign official, politician, party official, candidate for office;
  3. Engage with corrupt intent;
  4. Engage with the purpose of influencing one of these person’s official acts or decisions in violation of his or her lawful duty;
  5. Assist in obtaining or retaining business

Businessman refuses to accept bribeAccounting Provisions

There are also provisions regarding accounting for corporations, including the need to make and keep books and records that accurately and fairly reflect transactions, and devise and maintain an adequate system of internal accounting controls.

The FCPA is designed to prevent the influence of foreign officials in their official capacity to grant favors, obtain or retain business, or do something against their lawful duty for payment. 

Defining Bribery

The FCPA does not just mean payment of money. Under the anti-bribery law, anything of value falls under scrutiny.

While cash is a form of payment, so are things like discounts, gifts, use of materials, training, entertainment, meals and drinks, transportation, lodging, future employment, and the list goes on.

This component is critical for any organization, company, or individual to understand.  By simply doing business with a foreign official, you may be subject to the FCPA for things such as company dinners or tickets to a show. Understanding the law is critical to avoid penalties.

Business makes a bribeConsequences of Corruption

Violating the Foreign Corrupt Practices Act comes with some hefty penalties. For the law’s anti-bribery and accounting provisions, penalties include:

  • Up to $2 Million in Fines (anti-bribery)
  • Up to $250,000 fine and imprisonment up to 5 years for individuals (anti-bribery)
  • Up to $25 Million fine for corporations and other business entities (accounting)
  • Up to $5 Million fine and imprisonment up to 20 years for individuals (accounting)

That’s not all. The Alternative Fines Act also allows courts to impose even higher fines than the ones laid out by the FCPA. Criminal violations can also lead to a business being subject to suspension and debarment actions to limit the business any opportunities with the U.S. government.

How Training Can Help

Understanding the FCPA and how to comply can be overwhelming for some companies. That’s why the proper training course can make a huge impact on the overall business. Not only does a well-constructed course give employees a clear picture of what to avoid, but it also prepares the entire corporation to be on the lookout for any proposal of bribery from foreign officials.

Being well-informed and diligent will protect your business for years to come.

Check out TrainingABC's course on the FCPA.

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