Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA), a federal criminal law enacted in 1977, consists of two parts:
- It prohibits international bribery.
- It regulates accounting practices.
As a general matter, anti-corruption laws make it unlawful, directly or indirectly, to bribe, offer to bribe, or agree to bribe others, including foreign government officials, for the purpose of obtaining or retaining business from or with any government or other business, or for the purpose of directing business to any person, or for the purpose of otherwise securing an improper advantage.
Prohibitions of international bribery
The FCPA prohibits authorizing, offering or paying anything of value, directly or indirectly to any foreign official, political party or candidate to influence an act or decision to assist in obtaining or retaining business. Some forms are:
- Bribes (Offers of money or employment)
- Political contributions (payment to win or retain business)
- Third-party payments (gifts to a third party knowing it is for a foreign official to obtain business)
- Cash payments (avoid the appearance of impropriety)
It is a crime to make any corrupt payment to a foreign official to obtain or retain business or an advantage. “Foreign Officials” include:
- Officers and employees of foreign government
- Departments, instrumentalities or agencies of reigning government
- Anyone acting in an official capacity for foreign government
- Officers and employees of public international organizations
- Officers and employees of state-owned or controlled enterprises
- Members of a royal family or a legislative body
- Regulations of accounting practices
- It requires appropriate books and records to be established and maintained with good internal accounting controls Criminal Penalties
Anti-bribery violations can result in:
- Company fines of up to $2M
- Individual fines of up to $100K and up to 5 years imprisonment
- Fines on individuals may not be paid by an employer or principal
Accounting provision violations can result in:
- Company fines up to $25M
- Individuals can be fined up to $5M sentenced to up to 20 years imprisonment
- Civil penalties
- Company fines up to $16K per violation
- Individuals can be fined up to $16K per violation – not payable by an employer or principal
Accounting provision violations – based on egregiousness of the violation:
- Company fines from $75K to $725K
- Individuals can be fined from $7500 to $150K
Violations of the FCPA can also result in:
- Debarment –Suspension from doing business with the federal government.
- Cross-Debarment – Suspension from doing business with Multilateral Development Banks.
- Loss of export privileges – License applications can be under a “policy of denial” from Dept. of State (U.S. companies).
Flash Global, Inc. (“Flash”) expects all employees, contractors, vendors, consultants, representatives, and network partners to maintain the highest ethical and professional standards. Flash’s policies governing the behavior of all employees, network partners, etc. are intended to function as a useful summary of ethical principles and to emphasize the importance of observing these principles in the conduct of Flash’s business. As such, Flash’s policies draw on ethical and behavioral standards, as well as applicable laws.
Flash is subject to numerous laws and regulations that govern the various activities of Flash as an employer and entity operating overseas. Flash expects all employees, network partners, etc. to familiarize themselves with the federal, state and local laws and regulations that apply to their activities, and that they conduct themselves accordingly. Noncompliance, even when inadvertent, can have severe consequences for the employees, network partners, etc. involved and for Flash, including civil liability, loss of funding, reputation harm, and in extreme cases criminal prosecution or sanctions.
To assist employees, network partners, et al, and further their understanding of laws applicable to Flash’s activity overseas; Flash’s Compliance Department is issuing guidance on complying with anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”).
Each employee, contractor, vendor, network partner, etc. has the responsibility to ask questions, seek guidance, and report suspected violations of the Anti-Corruption Policy, or any other applicable law or regulation, contractual or other obligation of Flash, or of Flash policy or procedure. Individuals are encouraged to report possible violations through standard management channels, such as to their immediate supervisor or other appropriate Flash officials.
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