I. The FCPA has two prongs:
- Anti-bribery provision (no bribes)
- The FCPA prohibits any U.S. Company or person in the U.S. from “corruptly” giving “anything of value” directly or indirectly to Government Officials for the purpose of obtaining or retaining business or securing an improper advantage
- Accounting provision (no secret accounts)
- The FCPA requires keeping books, records and accounts in reasonable detail that accurately and fairly reflect the transactions and dispositions of the company.
- The “cardinal rule” of an FCPA–compliant accounting program is documentation of expenditures.
- At a minimum, every marketing expense, facilitating payment, etc… should be documented and cash payments should be discouraged.
- Maintain an internal accounting system assuring that –
- transactions are executed and assets are disposed of only in accordance with management’s authorization
- transactions are recorded to meet GAAP
- periodic audits of existing assets
II. Fines and Penalties: Both companies and individuals are subject to civil and criminal liability. Companies may not reimburse employees for fines imposed on them.
- Maximum Fines for Companies: USD $2 million or twice the profit (note: the government will look to enforce this on a per occurrence basis, such that one investigation could lead to 10’s to 100’s of millions of dollars in fines).
- Maximum Fines for Individuals: USD $100,000 and/or up to five years in prison.
The U.S. Government actively seeks extradition to the U.S. of non-U.S. persons indicted for FCPA related offenses!
Practice Note:
MIQ prohibits bribery in all its forms. Under no circumstance shall an employee or joint venture partner offer, pay give or receive any form of kick-back, bribe, undisclosed commission or offer excessive entertainment to, for or from a government official, employee of any government-owned or controlled enterprise, or any other party to perform his or her duties to the advantage of the company or to otherwise obtain or retain business or a business advantage.