The Foreign Corrupt Practices Act (FCPA) is a federal law that went into effect here in the United States in 1977. This piece of legislation makes it illegal for anyone to bribe a foreign official to retain or obtain any business. This law has applications far beyond U.S. borders. It applies to any publicly traded corporation that does business anywhere in the world.
This Act applies to both direct and indirect workers of a publicly traded corporation. This means that all of a company’s agents to include distributors, third party agents, joint-venture partners and consultants are all covered by this legislation. So, too, are those individuals directly affiliated with the corporation. This includes any employees, officers, stockholders and directors.
Companies that are subject to FCPA are required to maintain adequate records of their activities. Corporations must document all their transactions and clearly show evidence that all assets have been accounted for or accessed in alignment with how the company’s management intended for them to be used.
Any companies, their employees or agents that violate FCPA may face significant penalties. The U.S. Securities and Exchange Commission (SEC) may impose civil sanctions against stockholders, directors, agents, officers and employees for violating FCPA accounting and anti-bribery provisions.
Anyone who has financially benefitted from their inappropriate relationships with foreign entities may also have to turn over any gains and also pay some type of prejudgment interest. Companies that violate FCPA may be assigned an independent consultant to oversee their business dealings as well.
The stakes are high if you, your employees or an agent violate the FCPA, even if you unknowingly do so. This is why you may choose to consult with an international business attorney here in Orange County if you have plans on expanding your California company into other foreign markets. You’ll keep your legal liability risk low by having an attorney guide you through this process step-by-step.