User:Mas1050/Foreign Corrupt Practices Act/GroupSandbox

Exception[edit]
The Foreign Corrupt Practices Act (FCPA) makes an exception for payments referred to as "grease" or facilitation payments. These payments are made to accelerate or secure routine government acts, such as acquiring permits, processing visas, or providing police protection. The United States Department of Justice (DOJ) states that such gifts must be nominal and not intended to illegally influence government officials. Similarly, the Securities and Exchange Commission (SEC) highlights the need of making limited greasing payments to non-discretionary officials for non-discretionary acts.

However, distinguishing between legitimate grease contributions and criminal bribes might be difficult. This assessment is made after considering factors such as the amount, frequency, and purpose of the payment, as well as the level of the foreign official concerned. Furthermore, the outcome of the transaction or litigation for which the payment was made may affect its legality under the FCPA.

Despite efforts to provide advice, the distinction between grease payments and bribes remains a source of contention in FCPA enforcement, with legal experts and practitioners continuing to argue and interpret it.

Provisions and scope[edit]
The core aim of the Foreign Corrupt Practices Act (FCPA) is to prohibit companies and their individual officers from influencing foreign officials with any personal payments or rewards. The FCPA applies to any person who has a certain degree of connection to the United States and engages in corrupt practices abroad, as well as to U.S. businesses, foreign corporations trading securities in the U.S., American nationals, citizens, and residents acting in furtherance of a foreign corrupt practice, whether or not they are physically present in the U.S. This is considered the nationality principle of the Act. Any individuals involved in these activities may face prison time.

Debates Surrounding Foreign Corrupt Practices
Dealing with foreign corrupt practices has many issues in itself. It presents many conversations pertaining to the potential for political interference in an organization, jurisdiction, and political differences across capitals. International organizations may be impeded by differences in legal systems and diplomatic relations. The Government Accountability Office (GAO) revealed in a report that while many companies supported the act and its efforts to improve corporate codes of conduct, there was also major dissatisfaction in regards to certain standards that the act had in place for financial reports. Arguing that there wasn’t enough clarification about what the companies needed to report on, especially concerning money. This debate over financial reports has led to the concept of “[https://www.gao.gov/products/115367#:~:text=The%20antibribery%20provisions%20have%20been,changes%20in%20codes%20of%20conduct. materiality standard] ”. Companies are arguing that this concept is not very clear in the FCPA regulations, so they want to allow more flexibility in what counts as “material”.

Brystol Myers Squibb hasn’t dealt with issues pertaining to materiality standards but it does play into their new measures and ensuring compliance within the act. As a multinational corporation, they deal with many financial transactions such as purchases, investments, sales, and expenses. So being able to determine if individual transactions or aggregate amounts meet the threshold of materiality.

Amendment
FCPA and other anti corruption laws also provided companies with increased investor confidence, allowing them to judge a companies' governing board by how ethically sound and compliant to FCPA they are and whether or not they deal and run their business in good faith. Not only did it influence companies to become more self aware of possible corruption within their companies, but it also allowed for a growth in business ethics education. There are now certifications and dedicated courses that provide students and up and coming business professionals with the necessary knowledge needed to avoid and terminate possible corruption within companies and foreign markets.

Enforcement[edit]
Imprisonment for FCPA violations is relatively uncommon, yet when it does occur, the sentences, which can include imprisonment or house arrest, typically average around 30 months. Additionally, FCPA-related investigations are often lengthy, with an average duration of approximately 39 months from initiation to conclusion, according to a study by Stanford University. Enforcement of the FCPA continues to improve, allowing for more companies to be held accountable and scrutinized for deals that they make within markets that are known for having a high threat of corruption and bribery. As anti corruption laws continue being improved, more companies within outside traditional branches are being held accountable for possible FCPA breaches within their businesses. As the world becomes more intertwined and connected, anti corruption laws continue to be enforced regardless of what business you may be in, in order to create a more fair and less impartial business realm that promotes equality and fair opportunity.

Charges[edit]
In October 2015, the SEC settled charges against the New York-based pharmaceutical company Bristol Myers Squibb related to its Chinese joint venture. The charges included making unlawful payments and providing other benefits to healthcare providers in state-controlled hospitals to boost prescription sales. From 2009 to 2014, BMS China, a majority owned venture of BMS, engaged in practices such as giving cash, gifts, meals, and sponsoring travel and conferences to secure business, which were improperly recorded as legitimate expenses. The misconduct resulted in over $11 million in profits, for which the fines BMS was ordered to pay were just north of $14 million in total judgement. BMS agreed to return $11.4 million in profits, $500,000 in prejudgment interest, and a $2.75 million penalty. They were additionally required to report on their FCPA compliance for a two-year period.

Inquiries and Implementation of Regulations

Examinations of FCPA breaches frequently require detailed examination of financial documents, discussions with staff members, and cooperation among various law enforcement bodies. The SEC and DOJ are the main entities in charge of examining and bringing legal action against FCPA violations.

(5) Foreign Corrupt Practices Act (FCPA)" - Source: United States Department of Justice (www.justice.gov)

Measures to ensure compliance.

Additionally, the scope of the FCPA extends beyond straightforward bribery to include various corrupt behaviors such as accounting fraud and negligence in bookkeeping. Businesses that fall under the FCPA are required to establish strong compliance initiatives to stop and uncover potential breaches. These programs frequently include consistent employee training, detailed investigation of third-party agents and business partners, and internal checks to guarantee transparency and accountability in financial dealings.

Inquiries and Implementation of Regulations Examinations of FCPA breaches frequently require detailed examination of financial documents, discussions with staff members, and cooperation among various law enforcement bodies. The SEC and DOJ are the main entities in charge of examining and bringing legal action against FCPA violations. Measures to ensure compliance. Additionally, the scope of the FCPA extends beyond straightforward bribery to include various corrupt behaviors such as accounting fraud and negligence in bookkeeping. Businesses that fall under the FCPA are required to establish strong compliance initiatives to stop and uncover potential breaches. These programs frequently include consistent employee training, detailed investigation of third-party agents and business partners, and internal checks to guarantee transparency and accountability in financial dealings.

Sources:


 * 1) U.S. Department of Justice - FCPA Resource Guide
 * 2) Securities and Exchange Commission - FCPA Enforcement Actions
 * 3) Stanford Law School FCPA Clearinghouse - Statistics & Analytics
 * 4) World Bank Group - Effective Anti-Corruption Compliance Programs
 * 5) United Nations Global Compact - Anti-Corruption Compliance Guide