What is the Foreign Corrupt Practices Act?

The FCPA generally prohibits U.S. companies, foreign companies that trade on U.S. stock exchanges and U.S. residents directly or indirectly paying anything of value to a foreign official to obtain or retain business. The FCPA applies to far more than the traditional notion of "suitcases full of cash."

What is "Anything of Value"?

The term "anything of value" has been broadly construed to include not only cash or cash equivalents but also gifts, business opportunities, financial benefits, lodging and entertainment, use of materials and promises of future employment.

Who is a "Foreign Official"?

A foreign official includes any officer or employees or a foreign government or any department, agency or instrumentality or any person acting on behalf of a foreign government, department or agency. However, the term has been broadly defined to include employees of state-owned or state-controlled entities.

What about Payments to a "Third-Party"?

Companies cannot evade the FCPA by making corrupt payments through agents, consultants, distributors or joint venture partners. The FCPA contains broad third-party payment provisions.

What is the Whistleblower Provision?

Section 922 of the Dodd-Frank Act authorizes payments to whistleblowers of at least 10% and up to 30% of monetary penalties of monetary sanctions collected by the government in excess of $1 million.

Is It Limited to FCPA Violations?

The Whistleblower Provision applies to any violation of federal securities or commodities laws.

Is It Limited to Just U.S. Companies?

The Whistleblower Provision and FCPA apply to not just U.S. companies, but companies listed on U.S. stock exchanges and to those engaging in illegal conduct from the U.S. Because many many companies list on U.S. exchanges, the new law has a broad sweep.

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