Bribery or Gift? Running Afoul of the FCPA Can Land You in Jail and Your Company in Ruins

Posted in Offshore Account Update on November 30, 2018 | Share

The federal Foreign Corrupt Practices Act makes it unlawful to bribe foreign officials for favors that will result in financial gain.

As anyone involved in international business knows, it is not always easy to distinguish a bribe under the FCPA from a gift or even a tip.

This is precisely the reason that every company that does business abroad needs to create and implement internal controls and procedures regarding FCPA compliance.

The FCPA in Brief

Generally speaking, the anti-bribery provisions of the FCPA prohibit payments of any kind to any person when it is known that all or a portion of the payment will ultimately be used to induce a foreign official to behave in a way that results in economic advantage to the person or entity making the payment.

In other words, under the FCPA, you cannot give money or a gift or anything that is perceived of value – even a charitable contribution or a tip -- to a foreign official who has any control whatsoever over giving you a favor or advantage that could result in your monetary gain.

The anti-bribery provisions of the FCPA apply to all U.S. persons and pretty much anyone else who causes a U.S. person or entity to benefit as a result of the bribe

Potential Penalties for FCPA Violations

Criminal penalties for violating the anti-bribery provisions of the FCPA could result in:

  • Fines of up to $2 million for the business entity
  • Individual fines of up to $100,000 for officers, directors, employees and agents of the business entity
  • Up to five years in prison for each individual found guilty of violating the FCPA
  • Fines against an individual of up to twice the benefit sought

Potential civil penalties include:

  • Fines for up to $10,000 per occurrence levied against a firm, as well as any of its officers or agents who violated the FCPA on its behalf
  • Additional penalties at the court’s discretion in any related Security and Exchange Commission (SEC) actions for violation of the FCPA’s recordkeeping requirements for publicly traded companies

How to Reduce FCPA Exposure in Your Company

Any business that operates in the international arena should consider creating and implementing internal controls and procedures to reduce the company’s (and its officers’) exposure to sanctions for violating the FCPA. These internal controls and procedures might include:

  • Undergoing regular internal risk assessments to unmask any potential exposure
  • Creating and publishing an international anti-corruption compliance policy as part of your overall corporate governance strategy
  • Providing regular required training to all employees regarding your anti-corruption compliance policy
  • Communicating your policy to all international stakeholders and business contacts

Consulting With Thorn Law Group’s Washington DC International Tax Attorney

It is strongly recommended that a Washington DC international tax attorney work closely with you during all FCPA-related internal reviews and while creating your FCPA internal protocols and training programs. In the event a problem is uncovered, you will want to have experienced international counsel by your side to help determine the best course of action.

To get started, call managing attorney Kevin Thorn at 202-349-4033 or contact us online today for a confidential assessment of your FCPA exposure and prevention needs.

Thorn Law Group

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