What Is the Foreign Corrupt Practices Act?

4 Mins

In response, Congress passed the 

Foreign Corrupt Practices Act, or FCPA.

The FCPA made bribing foreign government officials, and using accounting to hide it, illegal.

The FCPA makes two things illegal:

1. Giving a bribe to foreign government officials to get their business

2. For publicly traded companies, using accounting practices to hide giving a bribe (or failing to keep adequate records of transactions)

The FCPA's accounting provision requires that publicly traded companies and individuals keep transparent and reasonably detailed financial records, like keeping clear receipts of transactions.

Let's practice!

You work at a US-based company and your colleague Frank just landed a big account with a German government entity, working with their US branch. HR tells him he needs FCPA compliance training, but he thinks it's unnecessary.

Quiz 1 of 1

Is Frank's new account covered under FCPA regulations for bribery and accounting?

a
Yes, because HR said so.
b
No, because he's working only with the client's US team.
c
Yes, because the account is with a foreign government.
d
No, he doesn't intend to travel overseas.

The correct answer is C.

Even though Frank is working only with their US branch, any work with a foreign government must be in compliance with the FCPA.

Lesson complete