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The Foreign Corrupt Practices Act (FCPA) was enacted in 1977 to curtail bribery of foreign officials and place some guidelines on what can and cannot be done by business people in foreign countries. The FCPA prohibits using the mail or other types of interstate commerce to offer, pay, or promise to pay money or anything of value to a foreign official in exchange for an improper advantage.
The FCPA also defines specific accounting requirements for Americans doing business internationally. Failure to comply can be charged as accounting fraud. Many individuals and companies that are charged with violating the Foreign Corrupt Practices Act are not even aware that they were in violation of any laws. Sometimes, what may be a customary business practice in another country is a violation of the FCPA, making the business and businesspeople at risk of facing federal criminal charges.
FAQs About Foreign Corrupt Practices Act
What does a corrupt practice mean under FCPA?
- Corrupt practices is defined as to offer, to promise, or to authorize a form of payment to a government official to wrongfully influence, acquire, or retain business.
- It is not limited to an actual payment, but the promise to pay/bribe is equally prohibited and a violation under FCPA.
- If its known to the organization that improper payments are being made through or by third party.
- If organization deliberately ignored the acts of illegal payment by third party or for the fact consciously knew there of it.
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What are the Consequences of violating the FCPA & Anti bribery violation?
Violation of anti- bribery provision against organization:1. Fine can be up to $ 2 million for each violation of this provision.
Violation of accounting provision against organization :1. Fine can be up to $ 25 Million for each violation of this provision.
OPTIONALLY, ANY OF THE FINES GIVEN MAY BE INCREASED TO DOUBLE THE BENEFIT THE DEFENDANT ATTEMPTED TO GAIN THROUGH THE ILLEGAL ACTIONS.
Violation of anti- bribery provision against individual i.e. Officer, director, agent :1. Fine can be up to $ $250,000 and imprisonment up to five years, or both.
Violation of accounting provision against individual i.e. Officer, director, agent :1. Fine can be up to $5,000,000 and imprisonment up to twenty five years.
Penalties Under The Foreign Corrupt Practices Act
If a conviction is handed down in a case involving charges of violating the Foreign Corrupt Practices Act the penalties are serious and can include significant fines and jail time. If a business is convicted, the company may be permanently shut down.
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