Running head: Foreign Corrupt Practices Act
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The Foreign Corrupt Practices Act
Carla Samuel
Keiser University E-Campus
Foreign Corrupt Practices Act
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Abstract
This paper explores the Foreign Corrupt Practices Act (FCPA) and how it goes against corrupt
corporations and briberies. Due to United States corporation illegally receiving money from
foreign officials the FCPA was created and signed into the law. This paper explains how the
FCPA was created, who it is enforced by, the penalties and violations, and others.
Foreign Corrupt Practices Act
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Foreign Corrupt Practices Act
During the mid-70, and in the wake of the Watergate Scandal, rumors began to circulate
about US corporations paying officials in foreign countries for favors. The United States
Congress demanded action when it was brought to light that the Securities and Exchange
Commission (SEC) solicited and received voluntary disclosure from more than 400 hundred
American companies that they had paid millions of dollars in bribes to foreign public officials
[Don]. To minimize similar situations from reoccurring and introduce accountability in the
corporate sector, the United States Congress and President Jimmy Carter passed and signed into
law the Foreign Corrupt Practices Act on December 19, 1977. It was enacted for the purpose of
making it unlawful for certain classes of persons and entities to make payments to foreign
government officials to assist in obtaining and retaining businesses[For17].
President Jimmy Carter believed that corrupt practices between corporations and foreign
official undermine the integrity and stability of the government and it harms relations with other
countries. He described bribery as being “ethically repugnant” and “competitively unnecessary”
[Pet77]. With the passing of the Foreign Corrupt Practices Act it makes corrupt payment to
foreign official illegal under United States Law. The law requires publicly held corporations and
public officials to keep accurate books and records and establish accounting controls to prevent
the use of “off the book” devices and it also requires more extensive disclosure of ownership of
stocks registered with the Securities and Exchange Commission [Pet77].
The Foreign Corrupt Practices Act, or FCPA, has two main mechanisms: the anti-bribery
provision and the accounting provision. “
Specifically, the anti-bribery provisions of the FCPA
prohibit the willful use of the mails or any means of instrumentality of interstate commerce
Foreign Corrupt Practices Act
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corruptly in furtherance of any offer, payment, promise to pay, or authorization of the
payment of money or anything of value to any person, while knowing that all or a portion
