Piacentile, Stefanowski & Malherbe LLP
Foreign Corrupt Practices Act Whistleblower Rewards Program

Foreign Corrupt Practices Act Whistleblower Rewards Program

In 1977, Congress passed the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1 et seq. (“FCPA”), making it unlawful to make payments to foreign government officials to get or keep business. The Securities Exchange Commission (SEC) and the Department of Justice are jointly responsible for enforcing the statute. Two types of companies are subject to the FCPA: those with formal ties to the United States, such as registration with the SEC., and those who take actions the FCPA prohibits in the United States. The FCPA imposes specific accounting requirements on companies with securities listed in the United States. This is to meet certain accounting standards intended to ensure that transactions that could be considered bribes to foreign officials are properly recorded. Of course, the primary thrust of the statute was to make such bribery illegal. There are five elements, or components, that make up a violation of the FCPA’s anti-bribery prohibition:

1) There must be a payment, offer to pay, authorization to pay, or promise to pay money or anything of value,

2) to a foreign government official or to someone whom the briber knows will pass it on to such an official,

3) with a corrupt motive,

4) to induce that official to do or fail to do some action in violation of the official’s lawful duty or to use their influence to influence an official decision or to secure an improper advantage otherwise, and

5) to get or keep business.

Notably, only payments to actual foreign officials, or payments intended to be passed on to such an official, are forbidden by the FCPA. It does not speak to what is often referred to as commercial bribery, where payments are made by a business to someone at another business to secure some sort of advantage.