• 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.

FCPA

What is the FCPA?

History:

The U.S. Foreign Corrupt Practices Act (FCPA) was enacted in 1977 after post-Watergate investigations into corporate political donations revealed payments to foreign officials on a massive scale. In response, the U.S. Congress passed the FCPA to curtail bribery of foreign officials and restore the public’s trust in the way U.S. companies did business abroad. More than three decades later, the FCPA is a common feature of doing business abroad and has inspired the proliferation of numerous international anti-corruption treaties, foreign bribery laws in other countries, and anti-corruption programs in international organizations. The combined result is growing multilateral enforcement of these rules.

Overview of the Law:

The FCPA broadly prohibits domestic (and some foreign) companies and individuals from bribing or conferring other economic benefits on foreign government officials. The anti-bribery provisions make it illegal for foreign persons acting in the United States or U.S. companies or individuals acting anywhere in the world to give or promise to give anything of value to a foreign official, directly or indirectly, to obtain or retain business or gain an unfair advantage. The accounting provisions of the law require U.S. and foreign companies registered on any U.S. securities exchange to make and keep books and records in reasonable detail to accurately and fairly reflect transactions and disbursements of the company’s assets and to devise and maintain a system of internal accounting controls that ensures transactions are executed in accordance with management’s authorization.

Enforcement Activity:

The U.S. Department of Justice and U.S. Securities and Exchange Commission have dramatically increased their enforcement of the FCPA in recent years, channeling resources into investigations that have resulted in a wave of multi-million dollar settlements and jail time for executives. New U.S. FCPA whistleblower mechanisms, the training of a special FBI unit to investigate bribery, and the implementation of the UK Bribery Act have added to the heightened need for companies to adopt effective global compliance programs to mitigate liability. Enforcement officials expect such programs to be an integral part of a company’s operations.


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