The Foreign Corrupt Practices Act: Taking a Bite out of Bribery in International Business Transactions

By Pacini, Carl | Fordham Journal of Corporate & Financial Law, April 1, 2012 | Go to article overview

The Foreign Corrupt Practices Act: Taking a Bite out of Bribery in International Business Transactions


Pacini, Carl, Fordham Journal of Corporate & Financial Law


ABSTRACT

Enforcement of the Foreign Corrupt Practices Act ("FCPA") has reached an all-time high. FCPA violations can result in many significant costs, both monetary and non-monetary. FCPA compliance has become a top corporate governance issue and has triggered shareholder litigation, tax investigations, and money laundering probes. While many corporate managers, financial officers, board members, internal and external auditors, and forensic accountants are aware of the FCPA's basic objectives and mandates, many may not do an adequate job of protecting their firms and/or clients from the dangerous consequences that can result from FCPA non-compliance. The purposes of this paper are to: (1) analyze and describe bribery and FCPA case filings, sanctions, payments (bribes), and value of business to be obtained; (2) describe and analyze the important provisions of the FCPA; and (3) make recommendations to help firms improve their compliance with the FCPA.

INTRODUCTION

In February 2010, BAE Systems reached settlements with the U.S. Department of Justice ("DOJ") and the United Kingdom Serious Fraud Office totaling $450 million.1 The settlements involved an alleged violation of the Foreign Corrupt Practices Act ("FCPA")2 in connection with the sale of a radar system to Tanzania.3 In January 2010, the DOJ arrested 22 employees and executives of firms in the military products industry.4 They were indicted on charges of bribing government officials in an African country to obtain a presidential guard business.5 In April of 2010, Charles Jumet of Virginia was "sentenced to 87 months in prison for paying bribes to former Panamanian government officials to secure maritime contracts."6 In May of 201 1, "a jury convicted Lindsey Manufacturing Co., two of its executives, and a Mexican sales agent in a bribery case."7 This marked the first time a company has been convicted at trial for violations of the FCPA.8

In 2000, there was one FCPA case pursued by the federal government. In 2009, there were 67 cases filed by the DOJ and the Securities and Exchange Commission ("SEC") (see Table 1). These facts highlight the growing priority given to FCPA enforcement by the DOJ and the SEC. The Assistant Attorney General Lanny A. Breuer, insists that aggressive prosecution of the FCPA "should make clear to every corporate executive, every board member, and every sales agent that [the DOJ] will seek to hold you personally accountable for FCPA violations."9 "The increase in FCPA prosecutions over the past several years can be attributed to an increase in voluntary reporting by corporations . . . increased international law enforcement cooperation, . . . a renewed focus on internal controls, the Sarbanes-Oxley requirement of executive certifications," proactive law enforcement investigations, and the global anti-fraud climate.10

U.S. firms competing for international business need to pay close attention to several trends. First, the number of FCPA cases and the severity of penalties will increase as the DOJ and SEC emphasize enforcement. Second, FCPA compliance will become a top corporate governance issue leading to more rigorous compliance. Third, international harmonization of antifraud and anticorruption regulation will lead to more parallel investigations and increased penalties. Fourth, "FCPA investigations may trigger other actions such as shareholder litigation, tax investigations, and money-laundering probes."11 While many corporate managers, financial officers, general counsels, compliance officers, and internal and external auditors are aware of the FCPA, "companies could benefit considerably from both increasing their knowledge and awareness of the FCPA and improving their capabilities to mitigate the risk of bribery and corruption."12

This Article provides a close look at the requirements imposed on U.S. and some foreign firms by the FCPA in the context of the emerging trends noted above. The purposes of this article are to: (1) analyze and describe bribery and FCPA case filings, sanctions, payments (bribes), and value of business to be obtained; (2) describe and analyze the important provisions of the FCPA; (3) analyze vicarious liability under the FCPA; and (4) make recommendations to help firms improve their compliance with the FCPA. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Foreign Corrupt Practices Act: Taking a Bite out of Bribery in International Business Transactions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.