This website uses cookies to ensure you have the best experience. Learn more

The Foreign Corrupt Practices Act Essay

1657 words - 7 pages

The Foreign Corrupt Practices Act, or FCPA, is an act that was put into place in 1977 to control the dealings US persons or entities would have with foreign officials. The act make it unlawful for any US party to pay, whether it is directly or indirectly, with money or anything else of value, to a foreign official in exchange for obtaining or retaining a business (FCPA Enforcement). In addition to this, any company that trades securities in the US is required to file periodic report to the Securities and Exchange Commission to have record of any business transactions in order to maintain effective internal controls (Department of Justice).

In the US, most contracts are formed privately allowing entities to control their business effectively preventing the problem the FCPA tries to resolve. No party is going to take a bribe that is not in their benefit and most of entities do not have jurisdiction over the contracts of others to be able to take any control. In many other countries, however, it is quite the opposite. It is the government that controls the contracts for major construction and manufacturing. Because of this, many entities in these countries will pay or bribe officials in order to get business contracts in their favor. Since this type of policy also applies to foreign entities doing business in these countries, many US businesses would follow this practice even though in the US this was not the norm (Miller & Hollowell, 2011, p. 22). For this reason the FCPA was created. It allowed the US to keep entities from using foreign business as a way to pay their way into beneficial contracts which they could not in the US. It also prevents foreign entities from having this advantage if doing business in the US.

The rules of the FCPA are a lot more complex than simply stating bribery is not allowed. There are many rules under the act to prohibit entities from conducting foreign business in ways that would be unethical and unlawful. When it comes to bribery, the Department of Justice is very strict about what it views as a violation. Any payment or gift that is given towards an official that has the power to manipulate the outcome of a business contract, and is given for this purpose, is prohibited. It can, however, be difficult to determine when a payments or gift was made for this purpose. Because of this the Department of Defense keeps a very close eye on these transactions to make sure that type of behavior is not overlooked. As an example, there was a case of an American corporation that investigated for assisting an official in getting his daughter a US education. Even though it was found it was not for purposes of bribery it shows how strict the Department of Defense can be with these situations (Stackhouse, 1993). It should also be noted that this would not apply to gift given to officials with less power solely for the sake of speeding up the processing of contracts that were already accepted as this would not fall under the...

Find Another Essay On The Foreign Corrupt Practices Act

International Anti-Bribery and Fair Competition Act of 1998

1103 words - 5 pages Bribery has always been a controversial issue, especially in the business world. Many argue that bribes are a necessary cost of doing business while others view them with distain, claiming that they are antiquated and create an unfair advantage. In the late 90’s, the problem reached a boiling point. Although laws such as the Foreign Corrupt Practices Act made bribery illegal in the United States, it still remained an international issue

Titan Case Study- International business law

1944 words - 8 pages makes it a criminal offence for USA companies, as well as any company listed on the New York Stock Exchange, to pay bribes to foreign government officials. However, the Foreign Corrupt Practices Act contains an exception for "grease payments". Basically, this exception concerns payments to officials in order to obtain something which they are legally required to do, but may delay if they don't receive this payment.Politicians receive campaign

Local City Council Is Against Paying Bribes to Acquire New Car Making Plant

1113 words - 5 pages could improve economic development. Moreover, the Foreign Corrupt Practices Act makes it unlawful for certain classes of people and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provision of the FCPA prohibits the willful use of the mails or any means of instrumentality of interstate commerce to be corruptly in furtherance of any offer, payment, promise to pay

Laws for Fair, Balanced and Competitive Business Practice

815 words - 4 pages transactions, and applies to both buyers and sellers. (Samozain, 2013) USA also has several laws that address transparency issues and other fair business practices. For example, the Foreign Corrupt Practices Act of 1977 (FCPA) addresses accounting transparency issues and bribery of foreign officials. History is full of high profile cases of violation of antitrust laws and competitive business practices. Rockefeller’s Standard Oil dropped its price

Corruption of Foreign Governments

1207 words - 5 pages corrupted nations in the world, which are Pakistan, China, and Taiwan. There are corrupted police officers all over the world. However, like in everything else, some nations are more corrupt than the other. Since America practices justice, it should find a way to eliminate corruption in other countries. Although it is not our responsibility to help, we should still do it, since America is trying to spread foreign policies all

Corruption and its impact on the full enjoyment of human rights, in particular economic, social and cultural rights

4308 words - 17 pages doors to foreign investment and long term growth, invariably impacting negatively on the enjoyment of human rights by the citizens of the affected country or countries.II. CORRUPTION: ITS FORMS AND CAUSESA. Forms of corruptionIt is possible to identify few interrelated forms of corrupt practices in many countries, though they may vary in intensity, depending on the country as well as during certain phases of national life such as military

FCPA Siemens Case

653 words - 3 pages , Venezuela, Russia, and Vietnam via kickbacks and other forms of bribery. (Witten, McLucas, Weissman, Parker, & Holtmeier, 2008) Such methods are in violation of the Foreign Corrupt Practices Act [15 U.S.C. § 78dd-1]: “It shall be unlawful for any issuer which has a class of securities registered pursuant to section 78l of this title . . . to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of

Corruption In China

800 words - 3 pages . Throughout this case there were many corrupt ways of doing business presented. One of the most common practices when negotiating large trade deals with foreign companies seems to be offering trips abroad. Offering trips is extremely popular when dealing with officials in China because they often do not get to travel abroad. If the trip includes learning more about the product, or the contract is always signed in a particular place, then the

Impact of Environmental Factors on Marketing Decisions of Costco

2014 words - 8 pages Health Sciences.Jobber D. (2001). Principles and Practice of Marketing (3rd Editions). New York: McGraw-Hill Publishing Company.Kristen, M.B. (2004). A legal win for Costco: It can challenge rules on selling wine and beer. Retrieved March 4, 2009, from http://seattlepi.nwsource.com/business/201985_costco02.htmlNorton, P.M. & Myers, M. (2004, November). The Foreign Corrupt Practices Act: A Minefield for US Companies in China. Retrieved June 15

Walmart’s Domestic and Global Marketing

1261 words - 5 pages Act of 1977 The Foreign Corrupt Practices Act of 1977 was enacted to help in stopping payments from being made to foreign governments to help obtain business dealings. Walmart has to comply with the FCPA or incur several investigations and hefty fines. “Walmart allegedly violated federal law by bribing Mexican officials, it began working behind the scenes to weaken the very law that it allegedly broke. Sure, this is a violation of the company’s

Corruption & Bribery in Differing Societies

1278 words - 6 pages questionable payments were made to Chinese officials and third-party consultants. Avon’s actions have violated the Foreign Corrupt Practices Act(FCPA) that bars U.S. companies from paying bribes to foreign officials. Under FCPA, it is incorrect to treat government officials to dinners and entertainment, however in China it is an essential practice to manage their “guanxi”. It might have been harder for Avon to obtain licenses to operate in China

Similar Essays

Foreign Corrupt Practices Act Essay

1691 words - 7 pages The Foreign Corrupt Practices Act was intended to prohibit bribery of foreign officials by American corporations. This report discusses the Foreign Corrupt Practices Act of 1977, the 1988 amendments, the 1998 amendments bringing the Act into conformance with the Organization for Economic Cooperation and Developments agreements on bribery, and the hits the Anti bribery laws have taken.The Foreign Corrupt Practices Act was implemented principally

The Indian Removal Act Of 1830: Corrupt From The Outset

1805 words - 8 pages The Trail of Tears was one of the deadliest and most gruesome act of violence ever carried out in the 19th century. It would result in the death of 4000 Indians in a forced relocation of 15000 Cherokee. This march was directly carried out by the United States Government and the Jackson administration. It was characterized at the time as a humanitarian alternative to letting the Native Americans die at the hands of land hungry white settlers

Healthcare Practices And The Affordable Care Act

578 words - 3 pages Healthcare practices must contend with many challenges throughout the year, from adopting new technologies to managing health outcomes for any number of patients. Numerous factors can add up to have a dramatic effect on revenue cycle management, creating positive - and negative - changes in providers' bottom lines. Medical practices are businesses, and funds must be controlled to maintain profitability. According to a survey from TransUnion

The Foreign Intelligence Surveillance Act: Analysis, Pros And Cons

1779 words - 7 pages The Foreign Intelligence Surveillance Act: Analysis, Pros and ConsIntroductionThe Foreign Intelligence Surveillance Act (FISA) is an Act of Congress passed in 1978 and signed by the then President Jimmy Carter. The Act stipulates the procedures to be followed when obtaining intelligence from foreign powers and agents of foreign powers both physically and electronically. The Act has been amended severally. In 2001, it was amended to involve