Foreign Corrupt Practices Act Reform
CJAC Position: Support
CJAC is urging Congress to reform the Foreign Corrupt Practices Act (FCPA). In 1977, the FCPA was approved by Congress and signed into law to prevent companies from bribing foreign officials to receive new or continuing business from those officials' countries- a noble enough goal. However, the vagueness of the law and a broad interpretation by the U.S. Department of Justice, which enforces FCPA and pursues damages from violators, has made American businesses that operate in other countries vulnerable to charges that go beyond the intent of the original FCPA. For instance, a company can be held liable for the actions of a rogue employee or subsidiary even if the company has a robust compliance program in place. It also unclear who exactly qualifies as a "foreign official."
Not only is this costly for the businesses that have to deal with these charges, it also leaves all multinational businesses in a fearful spot.
In 2010 fines for violations of the Act more than doubled, after years of dormancy. Reforms are needed to better define the FCPA and make it clear to companies that those who focus on compliance will see some measurable reward for their efforts.
