The Foreign Corrupt Practices Act

    November 11, 2011, 06:52 PM

    The Foreign Corrupt Practices Act (FCPA) includes two primary components: (1) the anti-bribery provisions, and (2) the recordkeeping and internal controls provisions. This post will discuss the anti-bribery component, which prohibits the offer or payment of money or anything of value to a foreign official to obtain or retain business. It is important for companies to realize that the phrase anything of value is construed broadly and is not limited to money. In addition, there is no minimum value that would exempt a payment or gift from the anti-bribery provisions of the FCPA. Although the anti-bribery provisions only prohibit bribes to a foreign government official, this term is also construed broadly and includes the officials or employees of a foreign government, including its departments, agencies and instrumentalities, public international organizations, and persons acting in an official capacity for or on behalf of such entities. Furthermore, a foreign government official also includes low level employees of state-owned entities. You should consider the following when determining whether an entity will be interpreted as a state-owned entity:

    • The foreign states characterization of the entity/employees
    • The foreign states degree of control over the entity
    • The entity’s purpose
    • The entity’s obligations and privileges under the laws of the foreign state
    • The creation of the entity
    • The ownership of the entity (financial support)