Foreign Corrupt Practices Act (FCPA)

Enacted in 1977, the Foreign Corrupt Practices Act (FCPA) makes it illegal for U.S. citizens, U.S. companies and certain foreign companies to bribe a foreign government official in order to obtain or retain business. However, despite the law’s good intentions, the government’s recent FCPA enforcement practices have created major uncertainty for American businesses and highlighted the need for reforms. read more...

Since the FCPA was enacted, trade’s importance to the U.S. economy (as a percentage of GDP) has grown more than fifty percent, and exports of U.S. goods exceeded $2 trillion in 2012. At the same time, foreign governments have increasingly enmeshed themselves in private businesses. 

Unfortunately, the FCPA has not evolved to reflect these changes in the global economy – creating unprecedented uncertainty for American businesses selling goods and services overseas. They are now exposed to civil and criminal penalties for conduct that is, in many cases, beyond their control and knowledge.

For example, when an employee of an American company takes an employee of a company partially owned by the Chinese government to lunch or pays for his cab ride, does that constitute an FCPA violation? And what happens when a rogue employee knowingly violates a company’s internal FCPA compliance system? Should the company be held liable too?

To help address these and other questions, the Department of Justice and the Securities and Exchange Commission released unprecedented joint guidance on their enforcement of the FCPA in November 2012. While this guidance was an important first step towards providing businesses with much-needed clarity and certainty, more reforms are needed. These include ensuring that U.S. companies implementing robust anti-bribery programs are not punished for the actions of rogue employees. The government should also provide a clearer definition of who constitutes a “foreign official” under the statute. It is currently unclear when or whether a foreign government’s involvement in a business makes the company’s employees foreign officials. 

More information about ILR’s proposals for FCPA reform can be found in its 2010 white paper Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act.



The ILR Research Review - Volume 1

December 18, 2014 | The second issue of the ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports.

Legal Limbo: Seeking Clarity in How and When the Department of Justice Declines to Prosecute

October 24, 2012 | This paper addresses the need for change and improvement in the process by which the Department of Justice ("DOJ" or "the Department") notifies subjects of its investigations that matters have been closed with no prosecution and in how the Department documents publicly the generic reasons behind these decisions.

All Results for Foreign Corrupt Practices Act (FCPA)

In the News Today - November 19, 2015

November 19, 2015 | Insights

Prosecution Rests its Case in Sheldon Silver Trial: Throughout the trial of the indicted former New York Assembly Speaker, prosecutors "focused on advancing the notion that Mr. Silver systematically masked any involvement he had with asbestos litigation in an effort to obscure one of the alleged schemes: that he was receiving fees from a law firm for referring patients recommended to him by a doctor in exchange for directing state grants to that doctor's field of research." (Wall Street Journal) Read More »

In the News Today - November 18, 2015

November 18, 2015 | Insights

Editorial Hits Sheldon Silver for 'Lying' to Editorial Board About True Nature of His Legal Work: "Actually, he had siphoned state funds out of a secret account, given that money to a doctor who treated mesothelioma patients, persuaded the doctor to refer the patients to Weitz & Luxenberg and bagged referral fees. Oh, and Silver had never met any of the clients and did no work on their cases." (New York Daily News) Read More »

In the News Today - November 13, 2015

November 13, 2015 | Insights

DoJ Considering Policy Shift in FCPA Enforcement? The U.S. Justice Department is "considering a new policy that gives companies a clearer idea of what to expect when self-reporting foreign corruption violations to the government." Said ILR's Harold Kim: "The business community is situated to help cut off corruption at its inception. Trying to get more cooperation upfront is the best way of enforcing anti-corruption laws." This article also highlights ILR's 2010 FCPA reform report, "Restoring Balance." (Wall Street Journal) Read More »

High-Profile Federal FCPA Probe into Wal-Mart Finds 'Little in Way of Major Offenses'

October 19, 2015 | Insights

The three-year Foreign Corrupt Practices Act (FCPA) investigation into Wal-Mart's activities in Mexico "has found little in the way of major offenses, and is likely to result in a much smaller case than investigators first expected." Read More »

In the News Today - August 19, 2015

August 19, 2015 | Insights

In a case that "essentially establishes that 'valuable student internships' are covered" under the Foreign Corrupt Practices Act (FCPA), the U.S. Securities and Exchange Commission reached a $14.8 million settlement with Bank of New York Mellon Corp. over accusations the bank provided internships to relatives of foreign officials in violation of the FCPA. The bank has not admitted any wrongdoing. (Wall Street Journal) Read More »

AG Nominee Lynch Forced to Respond to ILR's FCPA Proposals

February 18, 2015 | Insights

In a written exchange with U.S. Senators, U.S. Attorney General nominee Loretta Lynch was forced to counter the views expressed by the now-chief of DoJ's Criminal Division's Fraud Section, Andrew Weissman, in a 2010 paper he authored for the U.S. Chamber Institute for Legal Reform. Read More »

The ILR Research Review - Volume 1

Author: Institute for Legal Reform | December 18, 2014 | Research

The second issue of the ILR Research Review offers valuable insights from our preeminent experts and specialists on key topics addressed in the latest of ILR's research reports. Read More »

Federal Cases from Foreign Places: How the Supreme Court Has Limited Foreign Disputes From Flooding U.S. Courts

Author: George T. Conway III, Wachtell, Lipton, Rosen & Katz, John Bellinger, III and R. Reeves Anderson, Arnold & Porter LLP, James L. Stengel, Orrick, Herrington & Sutcliffe LLP | October 21, 2014 | Research

This collection of essays examines the shifting legal landscape of federal claims by foreign plaintiffs in the federal courts and focuses on the most common statutes invoked by foreign plaintiffs, as well as the threshold issues of personal jurisdiction and pleading standards that govern such suits. Read More »

In The News Today - October 7, 2014

October 07, 2014 | Insights

The U.S. Supreme Court has refused to consider an appeal that sought to limit the scope of the Foreign Corrupt Practices Act (FCPA) by "narrowing the law's definition of a 'foreign official.'" Read More »

In The News Today - September 22, 2014

September 22, 2014 | Insights

Companies that hire third parties to send unsolicited text messages can be liable for Telephone Consumer Protection Act violations, the Ninth Circuit held Friday in a published opinion reviving a proposed class action that blamed U.S. Navy contractor Campbell-Ewald Co. for recruitment messages cellphone users received. Read More »

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