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The Work of the Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act was created in 1988 by officials from thirty three countries, including members of the United States Congress, in an attempt to bring an end to corruption, bribery, and extortion on the international business level, focusing on the financial institutions of the world. For many years official and military personnel had been extracting payments from foreign companies in exchange for securing business opportunities. This created not only corruption on the level of business but on the local level as well, for while these officials gained wealth and power in the acts of extortion, the economy and the people of their countries suffered greatly. One of the challenges of dealing with foreign cultures, is that they have different perceptions of what actually constitutes a bribe. Many counties practice gift giving in the form of favors or presents as a part of their customs.

However, in the United States this too is considered bribery. It is the act of giving one preferential treatment and opportunity over another, at the personal gain of the one extorting the favor, the gift or the payment. The regulations of the FCPA have served to take the weight of offending a foreign official off of the American officials and the financial institutions. The federal law of the United States is such that these forms of payment in exchange for opportunity are illegal and subject to fines and prosecution. By taking this out of the hands of those conducting business affairs it serves to not only ensure that no laws are being violated, but that the companies and those in the middle of the situation have a valid reason for not partaking in such actions. Since the years of the inception of the Act, authorities have prosecuted many criminals who were committing crimes of extortion, money laundering and terrorist funding. This is not only serving to make the world a safer place, but a more ethical one as well.

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4. How to Report Suspicious Activities for Financial Institutions

Tags: bribery, Congress, Foreign Corrupt Practices Act, United States

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