Foreign Corrupt Practices Act

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.

 

Research

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.

Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act

October 27, 2010 | This paper presents a series of amendments that would serve to improve the U.S. Foreign Corrupt Practices Act ('FCPA'). That statute was enacted by Congress and signed into law by President Carter in late 1977. Congress's primary aim in enacting the FCPA was to prohibit U.S. companies and companies operating in the U.S. from paying bribes to foreign government officials, politicians, and political parties for the purpose of obtaining business opportunities abroad.

All Results for Foreign Corrupt Practices Act

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 »

Tags: Foreign Judgment Enforcement, Foreign Corrupt Practices Act

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 »

Tags: Foreign Corrupt Practices Act, Legal Ethics

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 »

Tags: Foreign Corrupt Practices Act, Third Party Litigation Funding

In The News Today - August 29, 2014

August 29, 2014 | Insights

A Pennsylvania appellate court affirmed a judgment in favor of Ford Motor Co. and BorgWarner Corp. in a suit that failed to properly attribute employees' alleged asbestos exposure to the companies. Read More »

Tags: Asbestos, Foreign Corrupt Practices Act

Exposing Corruption in the Chevron Amazon Case

August 20, 2014 | Insights

On March 4, 2014, the U.S. District Court for the Southern District of New York ruled that a $9.5 billion Ecuadorian judgment against Chevron Corporation for alleged contamination was the product of fraud and racketeering activity, finding it unenforceable. Read More »

Tags: Foreign Corrupt Practices Act

In The News Today - August 12, 2014

August 12, 2014 | Insights

The U.S. Supreme Court may hear a case seeking clarity on a key term in the Foreign Corrupt Practices Act (FCPA). Read More »

Tags: Foreign Corrupt Practices Act

In The News Today - May 19, 2014

May 19, 2014 | Insights

"Losing a shareholder lawsuit to a company could soon become more expensive," writes Liz Hoffman of The Wall Street Journal. Hoffman reports on the Delaware Supreme Court's recent decision to uphold, "a corporate bylaw that requires the losing party in litigation against the company to pay the winner's legal fees." Read More »

Tags: Foreign Corrupt Practices Act, Delaware

In the News - April 28, 2014

April 28, 2014 | Insights

The New York Times highlights the dubious BP gulf oil spill settlement claims that ILR has been highlighting for months. Read More »

Tags: Legal Ethics, Lawsuit Abuse Impact, Foreign Corrupt Practices Act

In the News - April 24, 2014

April 24, 2014 | Insights

Montana Attorney General Tim Fox has signaled his intention to defend the state's $10 million limit on the punitive damages a judge or jury can award an individual after a district judge ruled the cap is unconstitutional. Read More »

Tags: False Claims Act, Foreign Corrupt Practices Act, State Legal Reforms

The FCPA Probe that Crumbled

March 24, 2014 | Insights

Federal prosecutors are using stings, wiretaps, and undercover cooperators in FCPA investigations despite a recent operation that fell apart in what a judge called a "sad chapter" for criminal enforcement. Read More »

Tags: Foreign Corrupt Practices Act

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