Foreign Corrupt Practices Act Flashcards, test questions and answers
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What is Foreign Corrupt Practices Act?
The Foreign Corrupt Practices Act (FCPA) is a United States federal law that makes it illegal for American companies and individuals to bribe foreign officials for the purpose of obtaining or retaining business. It was enacted in 1977 as part of a larger effort by the U.S. government to address international corruption and ensure that countries are not using their power to unfairly influence US markets or businesses operating abroad. The FCPA has become one of the most important anti-corruption laws in the world, and its provisions are regularly referenced in other nations’ anti-corruption regulations. The FCPA applies to all US persons, including citizens and green card holders living outside the US; corporations organized under US law (including foreign subsidiaries); partnerships with at least one member which is either an American citizen or corporation; joint ventures between any two entities listed above; officers, directors, employees, agents, representatives and stockholders acting on behalf of such organizations or entities; political parties and candidates for office; labor unions and union members who act on behalf of those organizations; accounting firms contracted by any person subject to the FCPA’s jurisdiction; banks registered with the Financial Industry Regulatory Authority (FINRA) doing business outside of the United States; foreign governments that engage in commercial activities within US territory (such as owning a franchise); and certain non-US citizens residing in countries identified by Congress as having excessive levels of bribery activity, like China or India. Under this Act it is unlawful for anyone covered under its provisions to make payments totaling more than $100 dollars directly or indirectly through third parties such funds must be accounted for accurately according to Generally Accepted Accounting Principles (GAAP). Payments made with knowledge that they will be used for corrupt purposes constitute an offense punishable by fines up to $2 million per violation twice as much if corporate officers were involved plus jail time ranging from 5 years maximum imprisonment if found guilty beyond reasonable doubt at trial court level up to 10 years possible incarceration upon appeal before higher court tribunal decisions.