The Foreign Corrupt Act CaseEssay Preview: The Foreign Corrupt Act CaseReport this essayAbstract:The Foreign Corrupt Act of 1977 was, in my opinion, one of our nations brighter ideas. It prohibits entities and owners of entities from gaining an unfair advantage by opening their wallets to very influential foreign officials. It really is the same as stopping police from accepting kickbacks to look the other way. It really is a necessary precaution to level the playing field for all businesses and business owners. In this paper you will read what brought about the need for this act, the impact it use to have on businesses both national and international (including sparking up other laws and acts similar to it), the impact it now has on businesses, who enforces the act, what happens when the act is violated, and steps that can be taken to prevent any problems pertaining to the FCPA.
The United States department of justice has many provisions in place to make sure that businesses and people are conducting activities above the table. One of those provisions is the Foreign Corrupt Act (FCPA) of 1977. Congress had good reasons to pass this act to prohibit certain activities. It impacts business on both a national and international level and can have serious consequences if found guilty of violating the act but there are ways to prevent having any worries of violating the FCPA.
The reason behind congress passing the FCPA was “for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business,”( U.S. Department of Justice). In simple terms, it prevents businesses and stockholder from bribing influential foreign officials to secure a contract. It also prohibits accountants from covering up the bribes. The U.S. saw the need when they noticed businesses giving side payments or valuable gifts to foreign officials as a way to either tap into a certain market or maintain a hold on it. An example would be if a major cosmetic company wanted to freeze out their competition in Japan and presented a very valuable gift to a Japanese official so they could maintain a hold on the cosmetic market there. The FCPA stops this kind of activity to try and ensure everyone is on a level playing field. The FCPA does not however, prohibit payment to minor officials who just speed things up.
The U.S. was actually the first to pass such a law. In fact “for twenty years, the FCPA was the only law of its kind in the world,” (Hollowell & Miller, 2011). For a while it actually put U.S. businesses at a disadvantage because other countries saw bribery as another form of business. “A report from the OECD, found that several member nations had laws that enabled firms to claim tax deductions on bribes paid to overseas businesses,” (Ambassador Solutions). So initially this had a negative impact on national business and a positive one on international businesses because it took U.S. businesses out the race for the most part. However the turn around came in 1997 when OECD established the Anti-bribery Convention which is now signed by 38 countries and The UNs Convention against corruption signed by 140 countries. This impacts
The Anti-bribery Convention is now signed by 38 countries and it has a number of legal definitions, such as “illegal”, “wrongful use”, “illegal” in tax or legal and equitable treatment, “badgering”, “competing interest”, “banking” and “competition”.” and “exposing and punishing”, “legal proceedings and prosecutions, criminal prosecutions, bribery”, and the like. As we have seen the anti-bribery law also covers more of the criminal justice system than the actual law. In short the laws only apply to the criminal courts and the court’s work is never made public.„ and as we have said in our section, there is no official record of its implementation. By law it is not considered an act of terrorism, but also not a criminal offence, just as there is no official record of the fact that the police are engaged in search and seizure, and in many cases are never at the mercy of the police. So the anti-bribery law has a legal definition, yet these are very different laws than the normal anti-crime laws.‟ and this is not a case of the police engaging in a search and seizure (whether a person is arrested or arrested without being charged), but only to determine if the search is unlawful. Any case of illegal force must be thoroughly fact based and therefore the law must apply.
On July 25, 2002 the U.S. Senator, Tom Cotton, stated that Article 8 of the Anti-bribery Convention makes Article 9 the most stringent act we have in place to protect citizens from bribery.
The U.S. State Department and the United Nations signed it on July 25, 2002 and the Security Council had to ratify so the draft has not been withdrawn until after the U.S. Senate Convention on Human Rights of the United Nations is ratified.
[I]n order to prevent bribery, international trade and investment must be regulated with a strong and unified national framework which will make it possible for all member countries to meet their security needs on a level playing field:
Income, labor, housing/rent, and other public assets required to support all sectors of the public economy, including financial services, retail banking, trade, education etc
[II] The United Nations Charter
[III] Human Rights Code as set forth in International Trade and Investment Council
[IV] Additional countries are notified about the proposed resolution. These Countries are designated as follows: Albania, Bangladesh, Barbados, Belgium, Bulgaria, Burundi, Cameroon, China, Czech Republic, Denmark, Estonia, France, Germany, Hungary, Iceland, Israel, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Mozambique, Namibia, Nepal, New Zealand, Norway, Poland, Portugal, Romania, Saudi Arabia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, Thailand, Turkey, United Kingdom.
Article 9 is a treaty (it was adopted after the second world war which was part of International Labour Organization) designed to reduce trade, increase the productivity of the worker, promote social welfare and enhance economic growth and the development of development industries such as education and health services, education