What Is The Foreign Corrupt Practices Act?
In addition to rewarding whistleblowers who report securities violations within the United States, the Dodd-Frank Act also requires the Securities and Exchange Commission (“SEC”) to reward whistleblowers who voluntarily provide original information regarding bribes paid to foreign officials. Such payments violate the Foreign Corrupt Practices Act (“FCPA”), which is incorporated in part into U.S. securities laws. Section 922 of the Dodd-Frank Act awards whistleblowers 10 to 30 percent of any monetary recovery of over $1 million that the SEC obtains from an offending party through enforcement actions.
The anti-bribery provisions of the FCPA prohibit U.S. persons and businesses, U.S. and foreign public companies listed on stock exchanges in the United States or which are required to file periodic reports with the SEC, and certain foreign persons and businesses acting while in the territory of the United States, from making “corrupt payments” to foreign officials to obtain or retain business.
Specifically, the anti-bribery provisions of the FCPA prohibit such parties from making direct or indirect payments, promises, or offers to foreign officials with the knowledge that all or a portion of such money will be used to influence or induce the official to do or omit some action or to otherwise secure any improper advantage for the purpose of obtaining or retaining business.
The FCPA also contains an accounting provision, which requires public companies to make and keep accurate books and records and to devise an adequate system of internal accounting controls, and prohibits individuals and businesses from knowingly falsifying books and records or knowingly circumventing or failing to implement a system of internal controls.
For a detailed explanation of the FCPA, visit the Department of Justice’s FCPA Resource Guide, which may be accessed here.