The Foreign Corrupt Practices Act Research Paper

The Foreign Corrupt Practices Act - Research Paper Example INTRODUCTION This paper shall discuss the Foreign Corrupt Practices Act of 1977 (FCPA), which is a United States federal law passed mainly to ensure accounting transparency as mandated by the Securities Exchange Act of 1934. It also includes provisions meant to address the bribery of foreign officials. This paper shall discuss the act, including its pertinent details and essential provisions, as well as its reasons for passage and application. II. BODY The Foreign Corrupt Practices Act is a law which includes specific provisions on accounting and prohibitions on bribery (Cook and Connor, p. 2). The accounting provisions of the law are meant to prohibit illegal accounting practices which are often carried out to conceal corrupt practices. The provisions are also meant to guarantee that company shareholders, including the Securities and Exchange Commission are given an accurate picture of corporate status and finances (Cook and Connor, 2010). This law covers two groups of corporate per sonalities, first are â€Å"those with formal ties to the United States and those who take action in furtherance of a violation while in the United States† (Cook and Connor, 2010, P. 2). The US issuers and domestic concerns are required to heed the provisions of the FCPA, regardless of their actions being within or outside the US territories. Issuers are companies with securities in the US or those which are legally called for to regularly report with the US SEC (Cook and Connor, 2010). On the other hand, those under domestic concerns have a wider coverage, and include individuals or residents of the US. Corporations, partnerships, business trusts, sole proprietorships, and like entities are also covered under domestic concerns, for as long as their main place of business is in the US or their governing provisions are under the US laws (Cook and Connor, 2010). This act holds corporations and other entities legally liable for bribing foreign officials even if such act was carr ied out beyond American shores and throughout the years, various violators have been prosecuted under these provisions. The basic provisions of this law hold the following practices as illegal: â€Å"1) a payment, offer, authorization, or promise to pay money or anything of value; 2) to a foreign government official (including a party official of manager of a state owned concern), or to any other person knowing that the payment of promise will be passed on to a foreign official; 3) with a corrupt motive; 4) for the purpose of (a) influencing any act or decision of that person, (b) inducing such person to do or omit any action in violation of his lawful duty, (c) securing an improper advantage, or (d) inducing such person to use his influence to affect an official act or decision; 5) in order to assist in obtaining or retaining business for or with, or directing any business to, any person† (FCPA, in Cook and Connor, 2010, p. 2). Individuals and corporate entities violating th e provisions of this law can be held criminally liable and may be imprisoned and/or fined for their actions (Biegelman and Biegelman, 2010). The law also provides a generalized definition for what is to be qualified as ‘payment’ punishable under the FCPA. The FCPA defines these payments to cover any benefits (monetary or otherwise) given or gifted to a foreign official in order to curry favorable treatment in business activities with the involved foreign official (Cook and Connor,