Question

1. In a descriptive paragraph provide a brief explanation of the history of the Foreign Corrupt Practices Act. (FCPA)

2. In a paragraph tell me what is the primary purpose of the FCPA?

Answer 1

History:

The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law known primarily for two of its main provisions:
1. It addresses the accounting transparency requirements under the Securities Exchange Act of 1934 and
2. Concerning bribery of foreign officials.
The Act was amended in 1988 and in 1998, and has been subject to continued congressional concerns, regrading its enforcement on discouraging U.S. companies from investing abroad.
The act was introduced after Investigations by the U.S. Securities and Exchange Commission in the mid 1970s revealed that over 400 U.S. companies admitted making questionable or illegal payments in excess of $300 million to foreign government officials, politicians, and political parties to secure some type of favorable action by a foreign government. These payments that were made to ensure that government functionaries discharged certain ministerial or clerical duties. If the bribery is legal and the official has no choice but to bribe then in that particular country bribing is found necessary for "greasing the wheels" or conducting the business. Some famous scandals happened like the Lockheed bribery scandals, in which officials of aerospace company Lockheed paid foreign officials in several countries to favor their company's products,and the Bananagate scandal, in which Chiquita Brands bribed the President of Honduras for more favorable government policies. In response to these high profile revelations, Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system. The Act was signed into law by President Jimmy Carter on December 19, 1977. The Act was first was introduced as a "knowing" standard in order to find violations of the Act, encompassing "conscious disregard" and "willful blindness." 1st amendments was done in 1988 for "bona fide", "reasonable" and lawful gifts under the laws of the foreign country.
The second amendment was the International Anti-Bribery Act of 1998 which was designed to implement the OECD Anti-Bribery Convention—i.e., to include certain foreign persons and extending the scope beyond U.S. borders.

Purpose:

The main aim of the Foreign Corrupt Practices Act (FCPA) is to prohibit companies and individual officers from influencing foreign officials with any personal payments or rewards. The FCPA governs not only direct payments to foreign officials, candidates, and parties, but payments made to any other recipient in furtherance of influencing a foreign official, candidate, or party. These payments are not restricted to monetary forms and may include anything of value.