Foreign Corrupt Practices Act Essay Example | Topics and Well Written Essays - 1250 words

Foreign Corrupt Practices playact - Essay ExampleWhile the Act was initially seen as being bad for US business abroad, the long-term effects have been for the pull in of US companies both domestically and internationally.The Foreign Corrupt Practices Act (FCPA) of 1977 was implemented to further restrain the rules of Ameri toilette business in the areas of victimization undue influence in international business. According to the Congressional look Service the FCPA was, ...enacted principally to prevent corporate bribery of outside(prenominal) officials (Seitzinger). Before the Act was passed, there were cases of breadbaskets using secret funds to influence and bribe outside(prenominal) officials. The giving medication contended that these unlawful payments, ...affected adversely Ameri flowerpot foreign policy, damaged abroad the image of American democracy, and impaired public confidence in the financial single of American deals (Seitzinger). The FCPA likewise reasserted the ideals of fair trade and anti-trust policies by curtailing the unfair practices that might place a corporation in an unfairly advantageous position over a competitor through a dilute practice. While these business practices had been outlaw by the array of previous legislative acts, the FCPA codified and focused the illegal activity under one act.The FCPA of 1977, and the amendments of 1988 and 1998, specifically prohibits the bribery of any foreign official and making simulated or misleading entries into a companys financial records. Prior to the FCPA, companies would use slush funds to make payments to foreign officials to gain a business advantage. Often these payments would be incorrectly described in their accounting practices (Johnson). In addition the FCPA also expanded the definition of foreign official to include not only highly placed disposal officials but also private persons who may have a function similar to a government employee. This could include contractors working on government contracts or doing business with a foreign government. The FCPA further outlawed the practice of influencing regulatory policies and the obtaining of permits or licenses through fraud and bribery. The FCPA also further defined and prohibited the practice of willful blindness where a company pays money and does not make an inquiry that any valid person would make as to the use of said money (Johnson). The FCPA does not differentiate between a bribe that succeeds and an offer that fails or is declined. The Act defines corruption as the intent to unfairly influence.There are two sections that define the enforcement of the FCPA. There is the criminal provision that is enforced by the US Department of referee and the civil portion that is enforced by the Securities and Exchange Commission (SEC) (Foreign Corrupt Practices). The SEC also has responsibility to monitor and enforce the accounting standards set forth in the Act. The criminal fines for violation can be q uite extensive. The corporation can be fined up to $2 million, while individual violators can face fines of up to $100,000 and be sentenced to 5 years in prison (Shaheen and Geren, 3). Shaheen and Geren further note that the corporation is banned from reimbursing the fines and penalties levied against an individual violation. The fines that can be levied by the SEC for