Question

Are the actions undertaken by the companies or individuals in the following scenarios legal or illegal pursuant to U.S. law? Please explain each of your answers.

Scenario

A cash payment of $250,000 was made by Durdy Coal, Inc., a U.S. corporation, to DCI's agent with the instruction "put this to good use on DCI's behalf." In turn cash is paid to the State Importation Officer of the People's Republic of China in order to secure a Chinese import license. Is this legal or illegal under U.S. law? What is the most relevant U.S. statute regarding this scenario? Please explain.

Answer 1

The act performed is illegal, as per the US Foreign Corrupt Practices Act where the agent has paid money to get Chinese import license. Here, the money is being used affect the decision makers such as State Importation Officer of China, then it is a corrupt practice and it is illegal as per US Foreign Corrupt Practices Act.

Since the agent is authorized by the company and as per the Respondeat superior doctrine, the company is responsible for the act of agent.

Here the most relevant US statute is US Foreign Corrupt Practices Act that is applied in the given scenario.