The
U.S. Congress passed the Foreign Corrupt Practices Act ("FCPA") in 1977 in an
attempt to ensure commercial fair dealing, government integrity and
accountability. The FCPA established criminal and civil penalties for
payments made by U.S. companies or U.S. nationals to foreign officials that
could be considered bribes.
There
are two main areas of FCPA focus:
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Anti-Bribery Provisions prohibit the promise,
payment, or giving of money or anything of value to any foreign official
for the promise of obtaining or retaining business. |
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Accounting Requirements apply to companies required
to file periodic reports with the U.S. Securities and Exchange
Commission ("SEC"). These companies must maintain a system of
internal accounting controls that provide reasonable assurances that
honest and accurate records are being kept; and they must keep books,
records and accounts which reflect the transactions and dispositions of
the issuer. |
An FCPA program will include
plans; regulations, training, internal audit and self-reporting attributes, and
all activities will be well-documented to review with regulators.
FCPA violations carry severe penalties of up to $2 million, or twice the gain
for firms; and $100,000 for individuals and up to five years imprisonment.
Civil actions can be brought by both the SEC and the Department of Justice.
Treble damages might be extracted under civil RICO (Racketeer Influenced Corrupt
Organization) actions. FCPA issues are also fertile ground for private
actions and competitor lawsuits.
According to SEC documents, there were over 50 pending government investigations
in 2007 related to FCPA violations - twice the number as in 2006. The
largest monetary fine of $44 million was levied in 2007 against one of the
world's largest oilfields services companies; and a major worldwide technology
company agreed in 2007 to pay $2.5 million in fines and penalties due to conduct
of employees at a Chinese subsidiary. Department of Justice officials
indicate that the FCPA enforcement is a high priority in the years ahead.
NFC Global provides unparalleled, confidential global resources to assist you in
implementing and assessing FCPA compliance programs, performing background due diligence investigations on your agents and intermediaries, and transactional
investigations. A forensic accounting team will be under the direction of
your company and its counsel. As a leading, worldwide
provider of Due Diligence and Risk Consulting services for over 25 years, NFC
Global (NFC) has performed services in more than 150 countries. Serving a
global client base, NFC's team is comprised of investigators and analysts with
experience in federal, state and local law enforcement. Combined with
their unparalleled network of international contacts and sources, NFC comprises
the single most comprehensive and cost-effective global information resource
available.
Please contact us for additional information. |
