In 2004, the DOJ collected about $11 million in criminal fines. In 2009 and 2010 combined, the DOJ collected nearly $2 billion in criminal fines.
The FBI has trained a special investigative unit for FCPA violations.
FCPA enforcement officials currently have more than 150 criminal and 80 civil investigations underway.
New FCPA whistleblower provisions increase risks.
In 2010, 52 individual businesspeople were indicted, sentenced, or convicted and are awaiting sentencing for FCPA violations.
Enforcement officials resolved 6 FCPA enforcement actions in 2002. In 2010, they resolved 71.
In 2010 alone, five FCPA settlements exceeded $100 million.
The amount of FCPA penalties tripled between 2009 and 2010.
Individuals are facing significant FCPA fines and jail time for authorizing improper payments.
FCPA actions are increasingly brought against small and medium-sized companies as well as high-profile multinational corporations.
What constitutes an improper payment?
The FCPA is intended to prevent companies from making improper payments to foreign officials. It defines improper payments broadly as “anything of value,” which can include not only cash but also gifts, meals, entertainment, transportation, excessive promotional activities, charitable donations, discounts, jobs or internships for relatives, and reimbursement or payment of officials’ expenses. In fact, the FCPA sets no minimum value for what constitutes a bribe.
FCPA violations occur when such payments are meant to obtain or retain business or secure some other advantage. For example, improper payments might be made to obtain government registrations or approvals, win a government contract, clear equipment through customs, reduce customs duties, secure more favorable tax and tariff rates, or disadvantage a competitor.
Books and Records:
The accounting and recordkeeping provisions of the FCPA serve to prevent companies from making improper payments. The provisions require companies to take reasonable steps to protect against off-book accounts and disbursements and other unauthorized payments by implementing adequate controls and keeping accurate books and records.
Of particular concern, payments to foreign officials create liability for a company if they are made “indirectly” by third parties, like a company’s local agents, consultants, representatives, or subsidiaries. Thus, companies cannot “consciously disregard” a “high probability” of a corrupt payment made on their behalf by a third party.
Exceptions and Defenses:
Certain exceptions and defenses apply to the FCPA, though they are often narrowly construed. For example, the FCPA does not prohibit “facilitating payments” (or “grease” payments). Defenses exist for payments that are lawful under the written laws and regulations of the foreign official’s country and for payments that are “reasonable and bona fide” expenses.