THE UN ITED STATES FOREIGN CURRUPTPRACTICES ACT

Topics: Foreign Corrupt Practices Act, Bribery, United States Pages: 4 (1137 words) Published: August 31, 2014

How the Foreign Corrupt Practices Act Works
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Sunday, August 31, 2014
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Abstract
The United States foreign corrupt practices act is the law that makes foreign bribery illegal. Terms from the act are defined to further understand the extent of the act and how it was created and why. Provision covered within the act are also explained to further understand how this act can convict multiple officials and companies committing corrupt acts of bribery with foreign officials.


How the Foreign Corrupt Practices Act Works

The foreign corrupt practices act (FCPA) was signed on December 19th, 1977 in the White House during that time Jimmy Carter was the President of the United States. The foreign corrupt practices act prohibits financial gain for the purpose of making business between certain people and/or entities between countries. For example: A businessman in Canada can’t be paid a bonus for using an American made product in his factory instead of using another country’s product. Essentially this would be considered bribery which is the purpose for enacting the foreign corrupt practices act.

The idea of creating this act originally came to after over 400 American companies were found to have committed acts of bribery to foreign officials they were conducting business with overseas. The government wanted to prevent US companies from conducting such illegal business again with foreign officials and profiting from bribes. During the 1970’s, the world was beginning to chance in ways that were drastic. Technology was advancing very quickly and cutting costs to maintain a company going was a beginning to weigh heavily on business owners. The thought of moving business overseas to reduce cost became tempting and a lot of business owners decided to move their business overseas where overhead cost was tremendously lower then production costs in the United States. Salaries...

References: Foreign Corrupt Practices Act (FCPA). BusinessDictionary.com. Retrieved February 17, 2014, from BusinessDictionary.com website: http://www.businessdictionary.com/definition/Foreign-Corrupt-Practices-Act-FCPA.html
Miller , R., & Hollowell, W. (2014). Business law text $& exercises. (7th ed.). Mason, O.h.: South-Western Cengage Learning.
U.S. Securities and Exchange Commission, (2012). Spotlight on foreign corrupt practices act. Retrieved from website: http://www.sec.gov/spotlight/fcpa.shtml
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