Gesetz über ausländische Korruptionspraktiken (FCPA)

Table of Contents

Expand

• What Is the Foreign Corrupt Practices Act (FCPA)?
• Understanding the FCPA
• Anti-Bribery Provisions
• Internal Control Provisions
• Violating the FCPA
• SEC Sample Rulings in the FCPA

What Is the Foreign Corrupt Practices Act (FCPA)?

The Foreign Corrupt Practices Act (FCPA, the Act) is a United States law that prohibits U. S. firms and individuals from paying bribes to foreign officials to further business deals. The FCPA contains two main articles:

• The anti-bribery provisions
• The books, records, and internal control provisions, which speaks to accounting practices

The FCPA applies to prohibited conduct anywhere in the world and extends to both U. S.  publicly traded companies and privately held companies.

Understanding the Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act targets corruption and bribery internationally. Paying foreign officials for expediting legal processes or obtaining contracts was a common business practice around the world well into the 1970s. In some countries, in fact, corporations routinely wrote-off bribes as normal business expenses when filing their tax returns. Being common, however, does not make this behavior desirable or ethical.

When the act was passed in 1977, it received substantial backing from American businesses because they could not compete fairly in overseas markets where bribery was accepted. The FCPA’s anti-bribery regime—along with the adoption of treaties like the Organisation for Economic Co-operation and Development’s (OECD), which required signatory countries to outlaw all financial crime—has helped to level the playing field abroad for U. S. businesses.

Anti-Bribery Provisions

The act prohibits bribery of foreign officials and intends to deter corruption and abuses of power worldwide. The FCPA contains policies for governing the actions of publicly traded companies, their directors, officers, shareholders, agents, and employees. This includes working through  third parties such as consultants and partners in a joint venture (JV) with the company—meaning that the use of proxies to execute a bribe will not shield the company or individual from culpability.

Books, Records, and Internal Control Provisions

This section of the act outlines the accounting transparency guidelines that are meant to operate in tandem with the anti-bribery provisions. The FCPA requires companies whose securities are listed in the U. S. to meet its accounting provisions, which cite ways of recording assets that make it difficult to mask corrupt payments.

Corporations covered by the act also must devise and maintain internal controls to assure regulators that their business transactions are accounted for properly.

Violating the Foreign Corrupt Practices Act

The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are jointly responsible for enforcing the Foreign Corrupt Practices Act. For its part, the SEC created a special unit within its enforcement division to focus on matters that fall under the auspices of the FCPA.

Violators of the act can face substantial independent auditor to ensure future compliance. Individuals involved in breaking this law can face imprisonment for as many as five years.

SEC Sample Rulings in the FCPA

The SEC publishes current violations of the act, along with its enforcement actions, on the SEC website in press release format. The agency also redacts a summary list, organized by calendar year, of individuals and firms that violated the tenets of the act.

For example, in 2019, some of the SEC’s rulings included actions against:

• Ericsson (NASDAQ: ERIC), the Stockholm based multinational telecommunications company, agreed to pay more than $1 billion to the SEC and DOJ to resolve charges that it violated the FCPA by engaging in a large-scale bribery scheme involving the use of sham consultants to secretly funnel money to government officials in multiple countries.
• Microsoft (NASDAQ: MSFT) agreed to pay more than $24 million to settle SEC charges related to FCPA violations in Hungary, Thailand, Saudi Arabia, and Turkey, and criminal charges related to Hungary.
• Tim Leissner, a former executive of Goldman Sachs (NYSE: GS), agreed to a settlement with the SEC that includes a permanent bar from the securities industry for violating the FCPA by engaging in a corruption scheme, in which he obtained millions of dollars by paying unlawful bribes to various government officials to secure lucrative contracts for Goldman Sachs.
• The SEC charged Walmart Inc. (NYSE: WMT) with violating the books, records, and internal accounting controls provisions of the FCPA by failing to operate a sufficient anti-corruption compliance program for more than a decade as the retailer experienced rapid international growth. Walmart agreed to pay more than $144 million to settle the SEC’s charges and approximately $138 million to resolve parallel criminal charges by the DOJ for a combined total of more than $282 million.