They say that the Foreign Corrupt Practices Act is among the statutes most feared by companies with foreign operations, and to be sure, if you do business overseas or across the border, you’d better contend with it.
The FCPA, which was enacted in 1977, is America’s—and perhaps the world’s—foremost anti-bribery law aimed at combating corporate corruption abroad. It punishes you for bribing foreign public officials to win business, and it requires your company to maintain adequate books, records, and accounting controls to foster compliance.
The statute provides for criminal prosecution by the Department of Justice as well as civil prosecution by the DOJ or the Securities and Exchange Commission, and in either case, the statute has teeth. The criminal fines and civil monetary penalties can spiral into the millions of dollars per violation, and for individuals, none of it can be indemnified by the corporation. People can go to prison. And businesses can be barred from obtaining government contracts or lose valuable export privileges.
At a conference two weeks ago, leading representatives from the DOJ and the SEC summarized their enforcement efforts in 2013, and they previewed 2014. The highlights?
- This year was the fifth biggest on record in terms of overall penalties, and counting.
- DOJ is investigating more than 150 FCPA cases and expects to bring “very significant” cases in 2014.
- The trend is toward more international cooperation and cross-border enforcement as other countries ramp up their own anti-bribery and corruption regimes.