Summary: FCPA: A Resource Guide to the U.S. Foreign Corrupt Practices Act. Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.). The document underlines corruption as a facilitating element for other crimes such as human trafficking and smuggling. Relevant mainly for CORE WP19 on education and training. Full review and sources file are coded as CORE1023. Source file at: http://www.justice.gov/criminal/fraud/fcpa/docs/fcpa-english.pdf

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Overview: The document underlines corruption as a facilitating element for other crimes such as human trafficking and smuggling, “…corruption facilitates criminal activities, such as money laundering, hinders economic development, inflates the costs of doing business, and undermines the legitimacy of the government and public trust. And it threatens stability and security by facilitating criminal activity within and cross-borders, such as the illegal trafficking of people, weapons, and drugs.”. “The more endemic the corruption is, the more likely it is to be accompanied by other serious deficiencies in the rule of law: smuggling, drug trafficking, criminal violence, human rights abuses, and personalization of power.”

The FCPA takes two different approaches in order to combat the problem of international corruption. First, the anti-bribery provisions outlaw bribing of foreign government officials in order to obtain or retain business. Second, the accounting provisions stipulate certain record keeping and internal control requirements. In addition, they outlaw falsifying books or records and failing to implement a system of internal controls.

The document mentions as example following aims to commit bribery: to secure favorable tax treatment, to reduce or eliminate customs duties, to obtain government action to prevent competitors from entering a market, or to circumvent a licensing or permit requirement. In global supply chain framework the document introduces following case “Paying Bribes to Customs Officials”:

In 2010, a global freight forwarding company and six of its corporate customers in the oil and gas industry resolved charges that they paid bribes to customs officials. The companies bribed customs officials in more than ten countries in exchange for such benefits as:

• evading customs duties on imported goods,
• improperly expediting the importation of goods and equipment,
• extending drilling contracts and lowering tax,
• assessments obtaining false documentation related to temporary import permits for drilling rigs,
• enabling the release of drilling rigs and other equipment from customs officials

In many instances, the improper payments at issue allowed the company to carry out its existing business, which fell within the FCPA’s prohibition on corrupt payments made for the purpose of “retaining” business. The seven companies paid a total of more than $235 million in civil and criminal sanctions and disgorgement.

Cross-references:

• Council of Europe (COE)
• Convention and Related Documents:
• Criminal Law Convention on Corruption (signed October 10, 2000; ratification pending)
• Explanatory Report on the Criminal Law Convention on Corruption (December 1, 1998)
• Agreement Establishing The Group of States Against Corruption – GRECO (Adopted May 5, 1998)
• Ministers’ Resolution Approving the GRECO Agreement (Adopted May 5, 1998)

Full Citation:

Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.). (n.d.). Retrieved from http://www.justice.gov/criminal/fraud/fcpa/docs/fcpa-english.pdf

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