Foreign Corrupt Practices Act (FCPA)

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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 (DOJ) 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. Even more recently, the DOJ released in late 2017 additional guidance and changes to the U.S. Attorney's Manual indicating that the Department will presumptively decline to prosecute FCPA cases against companies that voluntarily disclose potential misconduct, fully cooperate with government investigators, and implement timely and appropriate remediation measures.

Suggested Resources

Research
  • ILR Research Review - Fall 2017

    ILR Research Review - Fall 2017

    November 30, 2017

    This special double-issue of the ILR Research Review features a wealth of insight and analysis on the world's rapidly changing litigation environment. The research contained in this issue targets exploitative litigation at home and abroad, examining numerous developments ranging from hyper-aggressive trial lawyer advertising in the U.S. to the imminent expansion of class actions in Europe. Read More

  • DOJ's New Threshold for

    DOJ's New Threshold for "Cooperation": Challenges Posed by the Yates Memo and USAM Revisions

    May 26, 2016

    This paper examines the recent release of the Yates Memo, changes to the U.S. Attorneys' Manual (USAM), and the complicated landscape for business compliance and cooperation. Read More

Additional Resources

All Results for Foreign Corrupt Practices Act (FCPA)

  1. In the News Today - December 5, 2013

    December 05, 2013 | News and Blog

    The SEC's co-director of enforcement said that "FCPA law...is not well developed" at a recent event. The FCPA Professor calls the comment the most notable - and candid - statement by an FCPA enforcement official in recent years.... Read More

  2. In the News Today - November 12, 2013

    November 12, 2013 | News and Blog

    Liquidators for two Bear Sterns hedge funds have sued Standard & Poor's Ratings Services, Moody's Investors, and Fitch Ratings, accusing them of misleading investors about the quality of their ratings. ... Read More

  3. In the News Today - November 4, 2013

    November 04, 2013 | News and Blog

    As the SEC's whistleblower reward program gains momentum, look for more follow-on securities litigation Kevin LaCroix writes in the D&O Diary.... Read More

  4. In the News Today - November 1, 2013

    November 01, 2013 | News and Blog

    A New York lawyer testified that he wanted 'no part' of a lawsuit against Chevron after finding out about ethical violations by the plaintiffs' team.... Read More

  5. In the News Today - October 31, 2013

    October 31, 2013 | News and Blog

    The National Geographic Society is reportedly under investigation for possible FCPA violations in Egypt surrounding its dealings with an Egyptian archaeologist who served as a gatekeeper to the country's antiquities... Read More

  6. In the News Today - October 30, 2013

    October 30, 2013 | News and Blog

    An anticipated settlement between JPMorgan and the Department of Justice is at risk of collapsing, according to people familiar with the talks.... Read More

  7. Legal Reformers Must Act to Heal the Lawsuit System

    October 23, 2013 | News and Blog

    By being proactive and persistent, we can achieve a healthy lawsuit system.... Read More

  8. In the News

    September 18, 2013 | News and Blog

    The world's biggest litigation funder, Burford Capital, announced a 41% increase in operating income from last year. Burford also disclosed it currently has $266 million invested in 29 litigation financing operations.... Read More

  9. George J. Terwilliger, III, and Matthew Miner on Federal Regulatory and Prosecution Policies

    October 26, 2012 | Video | Watch

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

    October 24, 2012 | Research

    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.... Read More