The Global Legal Context

Abstract

In 1977 the Foreign Corrupt Practices Act (FCPA) was enacted in the United States. The FCPA prohibits paying anything of value to foreign officials that could make them act contrary to their duties or to gain an unfair business advantage. The Act also requires corporations to keep accurate books, records, and accounts. This Act made the United States the first country to criminalize the payment of bribes by its citizens and companies to foreign officials overseas. The FCPA also applies to certain foreign issuers of securities and to anyone carrying out bribery within the United States. It can be called into effect even when there is no crime committed in the United States, and companies can be held responsible for acts of independent foreign subsidiaries. The FCPA allows facilitation payments for routine government action. This chapter looks at the history of the FCPA, what it says, how it works in practice, why it was introduced, and the effect it has had.