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.  

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

Research

The ILR Research Review - Winter 2014

December 18, 2014 | This edition of the ILR Research Review offers valuable insights from the latest of ILR's research on perpetual prosecution, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), social media, and transnational litigation.

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

October 21, 2014 | 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.

Additional Resources

All Results for Foreign Corrupt Practices Act (FCPA)

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 »

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 »

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 »

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 »

Legal Reformers Must Act to Heal the Lawsuit System

Author: Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform | October 23, 2013 | News and Blog

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

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 »

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

October 26, 2012 | Video

At the 13th Annual Legal Reform Summit on October 24, 2012, we pulled aside George J. Terwilliger, III, Senior Partner, White & Case LLP, and Matthew Miner, Partner, White & Case LLP, to discuss a new paper entitled, "Legal Limbo: Seeking Clarity in How and When the Department of Justice Declines to Prosecute." Watch »

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

Author: George J. Terwilliger, III and Matthew S. Miner of White & Case LLP | 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 »

Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act

Author: Andrew Weissmann and Alixandra Smith of Jenner & Block LLP | October 27, 2010 | Research

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. Read More »

In the News Today - May 19, 2014

December 31, 1969 | News and Blog

"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 »

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