The Foreign Corrupt Practices Act, or the FCPA, was enacted by the American Congress in 1977. Its primary purpose is the prevention of bribing of foreign officials to favor their business interests. In particular, the anti-bribery provisions of the Foreign Corrupt Practices Act prohibit using mails or other such means of communication to seek favors and making payments of money or other articles of value with the intention of obtaining favorable terms of business.
The purview of the Foreign Corrupt Practices Act is extensive in that even though it directly concerns foreign officials, any national or domestic official who belongs to the US can also be hauled up if he or she is found to have any level of involvement in dealings considered illegal by this Act.
The Foreign Corrupt Practices Act sought to correct the transparency requirements of the earlier Securities Exchange Act of 1934. The Foreign Corrupt Practices Act has undergone two major amendments, one in 1988, and the other, a decade later.
To whom does the Foreign Corrupt Practices Act apply?The Foreign Corrupt Practices Act applies to a number of individuals and entities. It applies to a person who has a business dealing with some business, individual or official in the US, even if that entity is not present in the US.
Effect of the implementation of the Foreign Corrupt Practices ActThe Foreign Corrupt Practices Act has brought to book many malpractices in the American corporate sector and has penalized enormous amounts of money on offending individuals or organizations in some cases. The heaviest penalty it levied was on Siemens, which was forced to pay close to half a billion dollars for its offences relating to the Foreign Corrupt Practices Act. This is just one of the many cases the Foreign Corrupt Practices Act has settled, awards and penalties of all of which have run into billions of dollars.