The Foreign Corrupt Practices Act (FCPA) is a federal statute or law that generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business. The FCPA can apply to prohibited conduct anywhere in the world and extends to publicly traded companies and their officers, directors, employees, stockholders, and agents. Agents can include third party agents, consultants, distributors, joint-venture partners, and others. The FCPA is located in the United States Code, beginning at 15 U.S.C. §78-dd-1.
The FCPA also requires issuers (persons who issue or propose to issue any security instrument) to maintain accurate books and records and have a system of internal controls sufficient to provide reasonable assurances that transactions are executed and assets are accessed and accounted for in accordance with management's authorization. See 15 U.S.C. §78m.
The sanctions for FCPA violations can be significant. The Securities and Exchange Commission (SEC) may bring civil enforcement actions against issuers and their officers, directors, employees, stockholders, and agents for violations of the anti-bribery or accounting provisions of the FCPA. Companies and individuals that have committed violations of the FCPA may have to disgorge their ill-gotten gains, plus pay prejudgment interest and substantial civil penalties. Companies may also be subject to oversight by an independent consultant.
The SEC and the Department of Justice (DOJ) are jointly responsible for enforcing the FCPA. The SEC's Enforcement Division has created a specialized unit to further enhance its enforcement of the FCPA.
The Foreign Corrupt Practices Act (FCPA) is a federal law that prohibits the payment of bribes to foreign officials for the purpose of obtaining or retaining business. This law is applicable globally, meaning that it affects companies and individuals in Texas when they engage in international business. The FCPA applies to publicly traded companies, their officers, directors, employees, stockholders, and agents, which can include third-party representatives like consultants and joint-venture partners. Additionally, the FCPA mandates that issuers keep accurate financial records and maintain a robust system of internal controls. Violations of the FCPA can lead to severe penalties, including civil enforcement actions by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), disgorgement of profits, interest, and significant civil penalties. The SEC, with a specialized unit for FCPA enforcement, and the DOJ jointly enforce the statute, and companies found in violation may also be subject to independent oversight.
