Foreign Corrupt Practices Act

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The start of the Foreign Corrupt Practices act began in 1970 when the U.S Securities and Exchange Commission launched an investigation over 400 U.S. companies. These companies admitted to making illegal payments to foreign officials, politicians, and political parties. These companies were guilty of facilitating payments in the result of trying to have a favorable action done to benefit their company by these foreign officials. When the act was signed into law by President Jimmy Carter on December 19, 1977 congresses goal was to return faith back into American’s and restore truthfulness into the business system. This act was solely implemented to make it unlawful for certain classes of people to make any type of payment to a foreign government …show more content…
businesses, foreign trading securities in the U.S., American nationals, citizens and residents that are attempting to act in a foreign corrupt practice whether or not they are in the United States. This part of the Foreign Corrupt Practices Act lets the U.S. assert its jurisdiction in court over its citizens where ever they are in the world. It also extends the act to publicly traded companies and their officers, employees, stockholders, and agents. Also this act covers any payments made through a third party to a foreign government official, the payer does not need to know for certain that the payment will reach a foreign official but only needs to have awareness of the unlawful act to be considered guilty and in violation of the Foreign Corrupt Practices Act. Businesses are required to have due diligence when conducting business relations, so by ignoring possible signals of unlawfulness will result in the company being severely at risk for violating the Foreign Corrupt Practices Act.
Violations against the Foreign Corrupt Practices Act can be significant; they will be subjected to criminal and civil enforcement actions against themselves and the company. Also face large fines and suspended from inquiring any federal contracting and some employees and officers can face prison time if found guilty of any corrupt actions. These fines and other actions are usually done on a case by case basis, so depending on how unlawful the company …show more content…
Over the years many countries have begun cracking down and developing serious reform policies to enforce the anti-corruption laws. Countries governments are feeling the pressure from other countries and their own citizens to crack down on the constant corruption and bribery that has been going on for years. One major event that dramatically changed how the government looked at anti-bribery laws was the September 11th terrorist attacks. In response to what had happened international authorities began to cooperate against terrorist networks and applied new laws in their countries to try and reduce the amount of corruption and money laundering that was occurring. When all this was occurring U.S. political leaders began to realize how much corruption has developed into an issue and how important anti- corruption efforts were to national security. “Corruption is a radicalizer because it destroys faith in legitimate authority,” Secretary of State John Kerry. Our government realized unorganized corrupt countries or groups within that country can be the start of radicalized citizens that can begin the terrorist network in that country. Along with the attacks for bringing attention to corruption the collapse of Enron and Arthur Anderson has led to significant changes within corporate accounting departments and how the department of justice handles prosecution of foreign
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