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USA's Foreign Corrupt Practices Act (1977) : Policy Briefing


The USA�s Foreign Corrupt Practices Act (FCPA) was adopted following an SEC investigation in which over 400 USA companies admitted making �questionable or illegal payments in excess of �300 million to foreign government officials, politicians and political parties in an attempt to restore public confidence in the integrity of USA business .

Adopted in 1977, the FCPA made it a criminal offence for USA companies, as well as any other public company which is listed on the New York Stock Exchange to pay bribes to foreign government officials.

The FCPA consists of two main parts:

- anti-bribery provisions: which prohibit American companies, citizens and residents from making illicit payments to foreign officials to procure a commercial benefit;
- accounting provisions: which requires public companies to make and keep books and records that accurately reflect the transactions of the corporation and put in place strict accounting controls aimed at uncovering and deterring corruption. These were designed to operate in tandem with the anti-bribery provisions.

Violation of either the FCPA�s anti-bribery or accounting provisions carries potential criminal and civil penalties.

The FCPA provided the motivation, and the model, for the OECD Anti-bribery Convention. The fact that only USA, and New York stock-listed companies were subject to anti-bribery legislation raised concerns that companies falling outside the scope of the FCPA could secure commercial advantage, through the payment of bribes, in a way that those subject to the FCPA could not.

Following its signing of the OECD Convention, the USA amended the FCPA in 1998 in order to bring it into line with the provisions of the OECD Convention. In particular it:

- included payments for �any improper advantage� rather than the more narrow 'obtain or retain business'
- expanded the jurisdictional reach to cover any person � not just issuers or domestic concerns;
- expanded the definition of public official to include officials of public international organisations (World Bank, UN);
- expanded the extra-territorial reach of the FCPA to cover acts that take place wholly outside the USA;
- eliminated the disparity in penalties for US or foreign employees of US companies. Prior to the OECD Convention, foreign nationals working for US companies were subject to civil penalties whereas post 1998 under the FCPA they like US nationals are subject to both civil and criminal penalties.

The FCPA has 2 broad implications for USA companies as well as any other public company listed on the New York Stock Exchange:

First, its anti-bribery provisions prohibit the making of illicit payments to foreign officials to procure a commercial benefit.

Secondly its accounting provisions requires public companies to make and keep books and records that accurately reflect the transactions of the corporation and put in place strict accounting controls aimed at uncovering and deterring corruption.

By January 2002, a total of 29 separate cases had been prosecuted by the Department of Justice for contravening the FCPA�s anti-bribery provisions and 12 injunctive actions brought by the SEC for violation of the FCPA�s accounting provisions. Altogether, 34 companies have been prosecuted for activities covering 34 countries - 26 non-OECD countries, 5 OECD countries and 3 non-OECD countries but signatories to the Convention. The value of bribes paid to foreign officials range from $16,000 to $9.9 million and the value of fines paid by companies from $10,000 to $21.8 million the latter is a record fine paid by Lockheed Martin for paying bribes to pay for defence contracts in Egypt during the 1980s.


The following lists all references contained in our database that are relevant to this briefing
REUTER NEWS SERVICE - LATIN AMERICA [3/13/1996] 'Another Head Rolls in IBM Argentina Bribe Scandal' by Stephen Brown [Source ID = 1104]

Engineering New Record [7/26/2001] 'Bill Harbert Construction Indicted on Bid-Rigging Charges' by Mary B. Powers [Source ID = 6379]

Private Law Office [1/1/2002] 'Digest of Cases and Review Releases Relating to Bribes to Foreign Officials Under The Foreign Corrupt Practices Act.' by Danforth Newcomb, Partner, Shearman & Sterling (New York, New York) [Source ID = 6438]

Africa News [2/13/2002] 'Uganda; MP Lukyamuzi Charges At Museveni Over AES' [Source ID = 6439]

Africa News [2/11/2002] 'Uganda; Nairobi to Buy More Power From Kampala' [Source ID = 6440]

Engineering News-Record [1/28/2002] 'CRITICS ATTACK WORLD BANK JOB' [Source ID = 6441]

NBC News [7/21/2000] 'U.S. spies on corruption overseas' by Robert Windrem: http://www.msnbc.com/news/434065.asp?cp1=1 [Source ID = 7443]

Center for Public Integrity Africa News [11/4/2002] 'Greasing the Skids of Corruption' by International Consortium of Investigative Journalists: http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7514]

AFX - Asia [11/22/2002] 'FOCUS US steps into ChevronTexaco-Kazakh feud amid concerns about oil deals' by Justine Cole: http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7562]

Ethnic NewsWatch [7/12/2002] ' India to probe Xerox bribery case' : http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7580]

 [7/11/2002] 'ECONOMY: SCANDAL-RIDDEN FIRMS SAID TO PLUNDER DEVELOPING WORLD' by Emad Mekay: http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7581]

Foreign Policy [5/1/2002] ' Corruption's true face; In Other Words; book review' by Lozada, Carlos: http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7585]

New York Law Journal [2/8/2001] 'International Corruption: Public and Private Sector Responses' by Stanley S. Arkin; Stanley S. Arkin: http://www.icij.org/dtaweb/icij_bow.asp?Section=Chapter&ChapNum=4 [Source ID = 7586]

Securities and Exchange Commission [12/10/2002] 'SEC Obtains $500,000 Penalty Against Syncor International Corporation for Violating the Anti-Bribery Provisions of the Foreign Corrupt Practices Act' : http://www.sec.gov/litigation/litreleases/lr17887.htm [Source ID = 7624]

CaseViewer [12/10/2002] 'Syncor Taiwan, Inc. Pleads Guilty To Bribery' : http://www.caseviewer.com/page.php?LinkID=219 [Source ID = 7625]

Columbus Business First [12/31/2002] 'Cardinal acquisition expected to close soon' : http://columbus.bizjournals.com/columbus/stories/2002/12/30/daily7.html [Source ID = 7626]

Corp-Focus [4/25/2002] 'No Kidding: Anti-Bribery Law Takes a Hit' by Russell Mokhiber and Robert Weissman: http://lists.essential.org/pipermail/corp-focus/2002/000114.html [Source ID = 7743]

International Association of Prosecutors (web site accessed 11/03/2003) [3/11/2003] 'The United States and the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions' by Richard A. Rossman, Esq.: http://www.iap.nl.com/bribe.html [Source ID = 7839]

The Guardian [5/9/2003] 'Cheney firm paid millions in bribes to Nigerian official' by Oliver Burkeman in Washington: http://www.guardian.co.uk/oil/story/0,11319,952243,00.html [Source ID = 7978]

The Guardian [5/17/2003] 'Iraq: after the war: Oil boss paid Dollars 1m a year by construction firm' by David Teather in New York: http://www.guardian.co.uk/oil/story/0,11319,952243,00.html [Source ID = 7980]

 [3/1/2003] 'REPORT OF STAFF INVESTIGATION OF ENRON CORP. AND RELATED ENTITIES REGARDING THE GUATEMALAN POWER PROJECT' by COMMITTEE ON FINANCE UNITED STATES SENATE: http://finance.senate.gov/press/enron.pdf [Source ID = 8083]

The Evening Standard [1/7/2004] 'IBM in talks with SEC over S Korea bribe charges' : http://finance.senate.gov/press/enron.pdf [Source ID = 8610]

 [2/19/2004] 'Former IBM officials sentenced to jail' : http://finance.senate.gov/press/enron.pdf [Source ID = 8636]

 [] 'Project: Corporate Counsel; Cutting Out The Middleman?' by Control Risks Group: http://finance.senate.gov/press/enron.pdf [Source ID = 8652]

International Oil Daily [4/7/2004] 'Oil Business Praised for Crackdown on Bribery' : http://finance.senate.gov/press/enron.pdf [Source ID = 8889]

International Oil Daily [10/8/2003] 'Baker Hughes Settles Suit' : http://finance.senate.gov/press/enron.pdf [Source ID = 8896]

International Oil Daily [9/24/2003] 'Scandals, Laws Prompt Majors to Confront Corruption Issue' by Deborah Kelly: http://finance.senate.gov/press/enron.pdf [Source ID = 8897]

Energy Compass [8/14/2003] 'US authorities broaden probe into Baker Hughes' : http://finance.senate.gov/press/enron.pdf [Source ID = 8899]

 [4/27/2004] 'Ex-HealthSouth VP Pleads Guilty' : http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8929]

Lloys List International [4/28/2004] 'UK declares war against corruption in commerce: New measures to fight money laundering and deter bribery in securing overseas contracts' by Matthew Saunders: http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8940]

Financial Times [1/16/2004] ' Viewpoint: Joining battle against the scourge of good business.' by Philip Nichols: http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8957]

Financial Times [5/8/2003] 'Bribery has long been used to land international contracts. New laws will make that tougher:' by THOMAS CATAN and JOSHUA CHAFFIN: http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8960]

Managing Exports [] 'Practical Steps to Stay Within U.S. and OECD Antibribery Statutes' : http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8962]

 [] ' INTERNATIONAL LEGAL DEVELOPMENTS IN REVIEW: 1998: PUBLIC INTERNATIONAL LAW' by Stuart H. Deming: http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8963]

 [6/30/1999] 'STUART EIZENSTAT HOLDS BRIEFING ON EFFORTS TO END BRIBERY OF FOREIGN OFFICIALS' : http://www.nysscpa.org/home/2004/404/4week/article27.htm [Source ID = 8964]

Associated Press Worldstream [5/3/2004] 'Titan earnings fall 56 percent on merger charges' : http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9011]

Los Angeles Times [4/9/2004] 'Titan's U.S. Work Not Part of Probe, CEO Says' : http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9012]

Financial Times [5/30/2003] 'Kazakhstan tries to boost image with US NEWS' by DAVID STERN: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9013]

Financial Times [5/30/2003] 'Kazakhstan hires lobbyists' : http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9014]

Financial Times [6/26/2003] ' President Nursultan Nazarbayev has gone to extraordinary lengths in the past decade to gain influence in the US capital and is seeking to limit the damage from a bribery scandal, writes Joshua Chaffin' by JOSHUA CHAFFIN: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9017]

The Associated Press [9/11/2003] 'Justice Department subpoenas ChevronTexaco in bribery investigation' by BRAD FOSS: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9020]

Philadelphia Inquirer [4/8/2004] ' Experts: Bribery probes signal honesty; They say stricter laws make U.S. firms nervous - and more vigilant.' by Susan Cornwell: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9082]

Oil & Gas Journal [10/13/2003] 'FCPA compliance a challenge for US oil, gas companies' by Layne E. Kruse; Fulbright & Jaworski LLP: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9094]

India Telecom [10/1/2003] 'Motorola in bribery case' : http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9096]

Business Crimes [6/4/2004] 'Is Bribing Foreign Tax Collectors a Federal Crime? The Fifth Circuit Says Maybe Yes, Maybe No' by Irvin Nathan: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9199]

The Houston Chronicle [7/10/2004] 'Firms admit Nigerian bribery; Two units gave over $ 1 million to influence deals' by NELSON ANTOSH: http://abcnews.go.com/wire/Business/ap20040503_1366.html [Source ID = 9229]

Associated Press Online [7/6/2004] 'ABB Subsidiaries Plead Guilty to Bribery' by TED BRIDIS: http://www.herald-sun.com/business/wire/22-498124.html [Source ID = 9237]

The Wall Street Journal [4/27/2004] 'Indonesia starts Monsanto inquiry' : http://www.corpwatch.org/article.php?id=11352 [Source ID = 9260]

Bloomberg.com [6/11/2004] 'Halliburton Venture in Nigeria Investigated by SEC' : http://quote.bloomberg.com/apps/news?pid=10000087&sid=awH7YVQ6duWg&refer=top_world_news [Source ID = 11705]

Financial Times [9/16/2004] 'Halliburton 'backed' bribes probe agent' by Michael Peel, William Wallis, Thomas Catan, Stephen Fidler: http://quote.bloomberg.com/apps/news?pid=10000087&sid=awH7YVQ6duWg&refer=top_world_news [Source ID = 12133]

Mondaq Business Briefing [10/15/2004] 'Fifth Circuit Interprets Foreign Corrupt Practices Act Expansively And Rules That Paying Bribes to Receive Reduction in Customs Duties or Taxes Could Violate Act' : http://www.efoley.com/files/tbl_s31Publications/FileUpload137/1861/Compliance,%20Counseling%20&%20Enforcement%20LegalNews%20Update%2002-04.pdf [Source ID = 12641]

Broward Daily Business Review [1/6/2005] 'World joins U.S. in cracking down onbusinesses offering bribes overseas' by Michael D. Goldhaber: http://www.efoley.com/files/tbl_s31Publications/FileUpload137/1861/Compliance,%20Counseling%20&%20Enforcement%20LegalNews%20Update%2002-04.pdf [Source ID = 12769]

CFO Magazine [] 'The Bribery Gap' by David M. Katz: http://www.efoley.com/files/tbl_s31Publications/FileUpload137/1861/Compliance,%20Counseling%20&%20Enforcement%20LegalNews%20Update%2002-04.pdf [Source ID = 12770]

Mondaq Business Briefing [11/29/2004] 'SECTION: ECONOMIC ANAYSIS; LEGISLATION & REGULATION; CORPORATE FINANCE; CONSULTANCY' : http://www.efoley.com/files/tbl_s31Publications/FileUpload137/1861/Compliance,%20Counseling%20&%20Enforcement%20LegalNews%20Update%2002-04.pdf [Source ID = 12776]

UNICORN [2/2/2005] 'Monsanto Fined for Paying Bribes in Indonesia' : http://www.againstcorruption.org [Source ID = 12941]


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UNICORN is a Global Unions Anti-corruption Network. It is supported by the international trade union bodies: the TUAC (Trade Union Advisory Committee to the OECD); Public Services International (PSI); and the International Confederation of Free Trade Unions (ICFTU).

UNICORN is financed by the Foundation Open Society Institute