When you expand your business into other countries, you face different standards and ethics. Corporate leaders and politicians in other countries may not have the same business ethics that you have in the U.S. You may find that these leaders make your business dealings difficult unless you engage in corrupt practices like bribes.
However, if your company trades publicly in the U.S., the government still expects you to avoid corrupt business practices. The Foreign Corrupt Practices Act (FCPA) does not allow your U.S. business to bribe people in another country to keep your business growing.
Rules of the FCPA
The FCPA makes sure that U.S. companies avoid bribing foreign officials. It also requires that accounting must be open and transparent. Anytime that a publicly traded company does business in another country, they must follow the anti-corruption guidelines of the FCPA. This includes not bribing foreign officials with money or a position in the company in exchange for better business dealings. The act also prohibits businesses from hiring a third party to bribe for them.
Punishments for violating the FCPA
The Securities and Exchange Commission (SEC) enforces the FCPA along with the Department of Justice. Punishments for those who violate the FCPA can be harsh. Those in the company who planned and executed the bribe can face up to five years in prison. The SEC can fine the company up to twice the financial gain the company expected to receive with the bribe. And the SEC can also assign an outside party to monitor the company’s practices.
Business dealings in other countries can be subject to U.S. laws
The FCPA prevents U.S. businesses from engaging in corrupt practices, even if they happen in another country. If you have business dealings in other countries, make sure to seek legal counsel to prevent you from breaking U.S. laws.
Even if you are in another country, the SEC can charge you for bribery in business dealings.