Foreign Corrupt Process Act

3060 Words13 Pages
This Foreign Corrupt Practices Act was established in 1977. This act is a United States federal law, it is widely known primarily for two of its main requirements. The first one called Trade Act, addresses accounting transparency requirements that were under the Act of Securities Exchange of 1934. The other one concerns bribery of foreign officials. The Trade Act intended for the Attorney General to give guidance concerning the branch of justice's enforcement guidelines with respect to the Act to possible exporters and small businesses that are not able to obtain specialized counsel on facts related to the foreign corrupt practices. The United States of American firms in search of doing business in foreign markets must be conversant with the…show more content…
The Foreign Corrupt Process Act focus is on the purpose of the payment as an alternative of the exact functions of the officials receiving offer, the payment or promise of payment, and there are exceptions to the anti-bribery stipulation for "facilitating payments for routine governmental action"; the last is ‘Business Purpose Test' Here the Foreign Corrupt Process Act does not allow payments made in order to help the firm in retaining or obtaining business with or for directing business to, any person. The Department of Justice interprets retaining business broadly such that the term encompasses more than award or renewal of a contract. Notice that the business to be retained or obtained does not need being with a foreign government instrumentality. The Foreign Corrupt Process Act prohibits corrupt payments through intermediaries says it is illegal to make a disbursement of cash to a third individual, all through knowing that a portion or all of the payment will go indirectly or directly to a foreign official. The term "knowing" included conscious disregard and intentional ignorance. The fundamentals of a crime are basically the same as explained above, only that in this case the "recipient" is the go-between who is doing the payment to the requisite "foreign official." An intermediary includes joint venture partners or…show more content…
It state that without effective education in the business environment in other counties, employees and business partners are more likely to make incorrect judgments by putting themselves as well as the company at risk of a infringement. The United States companies and their representative and subsidiaries offices must establish strong interior accounting control. The U.S. employers also must ask the tough questions of employees and must work with the persons to come out with a legal solution that still allows them to be competitive. This act cannot be a one time discussion or a few comments after a preparation sitting. It should be an ongoing exchange of ideas that helps the company expand a sound approach for meeting the market necessities within the limitations of the Foreign Corrupt Process

More about Foreign Corrupt Process Act

Open Document