Foreign Corrupt Policies Act

The FCPA prohibits the bribing of foreign officials and requires that all publicly traded firms prepare necessary financial statements according to the Generally Accepted Accounting Principles (GAAP).The Foreign Corrupt Policies act amended the Securities Exchange Act of 1934. It has two main provisions, the first provision addresses the accounting transparency guidelines and the second provision concerns bribery of foreign officials. The FCPA requires issuers to maintain accurate records and book accounts with internal controls sufficient to provide assurances that transactions are made and assets are assessed and recorded according to management’s authorization. It is designed to prevent corrupt accounting practices and to ensure that shareholders and the SEC have a true picture of a business’s finances. This part of the FCPA is enforced by the SEC. Further, the FCPA generally prohibits the payments of bribes to foreign officials to assist in obtaining an improper advantage or obtaining /retaining business. It specifically prohibits the use of mail or other interstate commerce corruptly, to offer, gift, give, promise to offer, or to authorize any such actions of anything of any value to a foreign official or party member or other persons knowing of such actions for the purpose of influencing an act or decision of any official to act or omit an act in violation to their lawful duties.The FCPA can apply to prohibit conduct anywhere in the world and it extends to publicly traded companies and their officers, directors, employees, stockholders, and agents (which can include third-party agents, consultants, distributors, joint venture partners and others).