TEXT: THE FOREIGN CORRUPT PRACTICES ACT ("FCPA", 15 USC 78dd et seq.)
(Law prohibits U.S. companies or individuals from bribing foreign officials)
Washington -- The FCPA was passed by the United States Congress in 1977. This law prohibits any U.S. person or its agent to offer, pay, or promise to pay any foreign official, political party or political candidate for the purposes of influencing, obtaining or retaining business. The law applies to all companies which have stock registered with the Securities and Exchange Commission.
UNITED STATES CODE
TITLE 15 - COMMERCE AND TRADE
CHAPTER 2B - SECURITIES EXCHANGES
§ 78dd-1. Prohibited foreign trade practices by
issuers
(a) Prohibition
It shall be unlawful for any issuer which has a class of
securities registered pursuant to section
78l
of this title or which is required to file reports under section
78o(d)
of this title, or for any officer, director, employee, or agent
of such issuer or any stockholder thereof acting on behalf of
such issuer, to make use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or
authorization of the giving of anything of value to -
(1) any foreign official for purposes of -
(A)
(i) influencing any act or decision of such foreign
official in his official capacity, or (ii) inducing such foreign
official to do or omit to do any act in violation of the lawful
duty of such official, or
(B) inducing such foreign official to use his influence
with a foreign government or instrumentality thereof to affect
or influence any act or decision of such government or
instrumentality, in order to assist such issuer in obtaining or
retaining business for or with, or directing business to, any
person;
(2) any foreign political party or official thereof or any
candidate for foreign political office for purposes of -
(A)
(i) influencing any act or decision of such party,
official, or candidate in its or his official capacity, or (ii)
inducing such party, official, or candidate to do or omit to do
an act in violation of the lawful duty of such party, official,
or candidate,
(B) inducing such party, official, or candidate to use its
or his influence with a foreign government or instrumentality
thereof to affect or influence any act or decision of such
government or instrumentality, in order to assist such issuer in
obtaining or retaining business for or with, or directing
business to, any person; or
(3) any person, while knowing that all or a portion of such
money or thing of value will be offered, given, or promised,
directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for
foreign political office, for purposes of -
(A)
(i) influencing any act or decision of such foreign
official, political party, party official, or candidate in his
or its official capacity, or (ii) inducing such foreign
official, political party, party official, or candidate to do or
omit to do any act in violation of the lawful duty of such
foreign official, political party, party official, or candidate,
or
(B) inducing such foreign official, political party, party
official, or candidate to use his or its influence with a
foreign government or instrumentality thereof to affect or
influence any act or decision of such government or
instrumentality, in order to assist such issuer in obtaining or
retaining business for or with, or directing business to, any
person.
(b) Exception for routine governmental action
Subsection (a) of this section shall not apply to any
facilitating or expediting payment to a foreign official,
political party, or party official the purpose of which is to
expedite or to secure the performance of a routine governmental
action by a foreign official, political party, or party
official.
(c) Affirmative defenses
It shall be an affirmative defense to actions under
subsection (a) of this section that -
(1) the payment, gift, offer, or promise of anything of
value that was made, was lawful under the written laws and
regulations of the foreign official's, political party's, party
official's, or candidate's country; or
(2) the payment, gift, offer, or promise of anything of
value that was made, was a reasonable and bona fide expenditure,
such as travel and lodging expenses, incurred by or on behalf of
a foreign official, party, party official, or candidate and was
directly related to -
(A) the promotion, demonstration, or explanation of
products or services; or
(B) the execution or performance of a contract with a
foreign government or agency thereof.
(d) Guidelines by Attorney General
Not later than one year after August 23, 1988, the Attorney
General, after consultation with the Commission, the Secretary of
Commerce, the United States Trade Representative, the Secretary
of State, and the Secretary of the Treasury, and after obtaining
the views of all interested persons through public notice and
comment procedures, shall determine to what extent compliance
with this section would be enhanced and the business community
would be assisted by further clarification of the preceding
provisions of this section and may, based on such determination
and to the extent necessary and appropriate, issue -
(1) guidelines describing specific types of conduct,
associated with common types of export sales arrangements and
business contracts, which for purposes of the Department of
Justice's present enforcement policy, the Attorney General
determines would be in conformance with the preceding provisions
of this section; and
(2) general precautionary procedures which issuers may use
on a voluntary basis to conform their conduct to the Department
of Justice's present enforcement policy regarding the preceding
provisions of this section. The Attorney General shall issue the
guidelines and procedures referred to in the preceding sentence
in accordance with the provisions of subchapter II of chapter 5
of title 5 and those guidelines and
procedures shall be subject to the provisions of chapter 7 of
that title.
(e) Opinions of Attorney General
(1) The Attorney General, after consultation with
appropriate departments and agencies of the United States and
after obtaining the views of all interested persons through
public notice and comment procedures, shall establish a
procedure to provide responses to specific inquiries by issuers
concerning conformance of their conduct with the Department of
Justice's present enforcement policy regarding the preceding
provisions of this section. The Attorney General shall, within
30 days after receiving such a request, issue an opinion in
response to that request. The opinion shall state whether or not
certain specified prospective conduct would, for purposes of the
Department of Justice's present enforcement policy, violate the
preceding provisions of this section. Additional requests for
opinions may be filed with the Attorney General regarding other
specified prospective conduct that is beyond the scope of
conduct specified in previous requests. In any action brought
under the applicable provisions of this section, there shall be
a rebuttable presumption that conduct, which is specified in a
request by an issuer and for which the Attorney General has
issued an opinion that such conduct is in conformity with the
Department of Justice's present enforcement policy, is in
compliance with the preceding provisions of this section. Such a
presumption may be rebutted by a preponderance of the evidence.
In considering the presumption for purposes of this paragraph, a
court shall weigh all relevant factors, including but not
limited to whether the information submitted to the Attorney
General was accurate and complete and whether it was within the
scope of the conduct specified in any request received by the
Attorney General. The Attorney General shall establish the
procedure required by this paragraph in accordance with the
provisions of subchapter II of chapter 5 of title 5 and that
procedure shall
be subject to the provisions of chapter 7 of that title.
(2) Any document or other material which is provided to,
received by, or prepared in the Department of Justice or any
other department or agency of the United States in connection
with a request by an issuer under the procedure established
under paragraph (1), shall be exempt from disclosure under
section 552 of title 5 and shall
not, except with the consent of the issuer, be made publicly
available, regardless of whether the Attorney General responds
to such a request or the issuer withdraws such request before
receiving a response.
(3) Any issuer who has made a request to the Attorney
General under paragraph (1) may withdraw such request prior to
the time the Attorney General issues an opinion in response to
such request. Any request so withdrawn shall have no force or
effect.
(4) The Attorney General shall, to the maximum extent
practicable, provide timely guidance concerning the Department of
Justice's present enforcement policy with respect to the
preceding provisions of this section to potential exporters and
small businesses that are unable to obtain specialized counsel
on issues pertaining to such provisions. Such guidance shall be
limited to responses to requests under paragraph (1) concerning
conformity of specified prospective conduct with the Department
of Justice's present enforcement policy regarding the preceding
provisions of this section and general explanations of
compliance responsibilities and of potential liabilities under
the preceding provisions of this section.
(f) Definitions
For purposes of this section:
(1) The term ''foreign official'' means any officer or
employee of a foreign government or any department, agency, or
instrumentality thereof, or any person acting in an official
capacity for or on behalf of any such government or department,
agency, or instrumentality.
(2)
(A) A person's state of mind is ''knowing'' with respect to
conduct, a circumstance, or a result if -
(i) such person is aware that such person is engaging in
such conduct, that such circumstance exists, or that such result
is substantially certain to occur; or
(ii) such person has a firm belief that such circumstance
exists or that such result is substantially certain to occur.
(B) When knowledge of the existence of a particular
circumstance is required for an offense, such knowledge is
established if a person is aware of a high probability of the
existence of such circumstance, unless the person actually
believes that such circumstance does not exist.
(3)
(A) The term ''routine governmental action'' means only an
action which is ordinarily and commonly performed by a foreign
official in -
(i) obtaining permits, licenses, or other official
documents to qualify a person to do business in a foreign
country;
(ii) processing governmental papers, such as visas and work
orders;
(iii) providing police protection, mail pick-up and
delivery, or scheduling inspections associated with contract
performance or inspections related to transit of goods across
country;
(iv) providing phone service, power and water supply,
loading and unloading cargo, or protecting perishable products
or commodities from deterioration; or
(v) actions of a similar nature.
(B) The term ''routine governmental action'' does not
include any decision by a foreign official whether, or on what
terms, to award new business to or to continue business with a
particular party, or any action taken by a foreign official
involved in the decisionmaking process to encourage a decision
to award new business to or continue business with a particular
party.
§ 78dd-2. Prohibited foreign trade practices by domestic
concerns
(a) Prohibition
It shall be unlawful for any domestic concern, other than an
issuer which is subject to section
78dd-1
of this title, or for
any
officer, director, employee, or agent of such domestic concern or
any stockholder thereof acting on behalf of such domestic
concern, to make use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or
authorization of the giving of anything of value to -
(1) any foreign official for purposes of -
(A)
(i) influencing any act or decision of such foreign
official in his official capacity, or (ii) inducing such foreign
official to do or omit to do any act in violation of the lawful
duty of such official, or
(B) inducing such foreign official to use his influence
with a foreign government or instrumentality thereof to affect
or influence any act or decision of such government or
instrumentality, in order to assist such domestic concern in
obtaining or retaining business for or with, or directing
business to, any person;
(2) any foreign political party or official thereof or any
candidate for foreign political office for purposes of -
(A)
(i) influencing any act or decision of such party,
official, or candidate in its or his official capacity, or (ii)
inducing such party, official, or candidate to do or omit to do
an act in violation of the lawful duty of such party, official,
or candidate,
(B) inducing such party, official, or candidate to use its
or his influence with a foreign government or instrumentality
thereof to affect or influence any act or decision of such
government or instrumentality, in order to assist such domestic
concern in obtaining or retaining business for or with, or
directing business to, any person; or
(3) any person, while knowing that all or a portion of such
money or thing of value will be offered, given, or promised,
directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for
foreign political office, for purposes of -
(A)
(i) influencing any act or decision of such foreign
official, political party, party official, or candidate in his
or its official capacity, or (ii) inducing such foreign
official, political party, party official, or candidate to do or
omit to do any act in violation of the lawful duty of such
foreign official, political party, party official, or candidate,
or
(B) inducing such foreign official, political party, party
official, or candidate to use his or its influence with a
foreign government or instrumentality thereof to affect or
influence any act or decision of such government or
instrumentality, in order to assist such issuer in obtaining or
retaining business for or with, or directing business to, any
person.
(b) Exception for routine governmental action
Subsection (a) of this section shall not apply to any
facilitating or expediting payment to a foreign official,
political party, or party official the purpose of which is to
expedite or to secure the performance of a routine governmental
action by a foreign official, political party, or party
official.
(c) Affirmative defenses
It shall be an affirmative defense to actions under
subsection (a) of this section that -
(1) the payment, gift, offer, or promise of anything of
value that was made, was lawful under the written laws and
regulations of the foreign official's, political party's, party
official's, or candidate's country; or
(2) the payment, gift, offer, or promise of anything of
value that was made, was a reasonable and bona fide expenditure,
such as travel and lodging expenses, incurred by or on behalf of
a foreign official, party, party official, or candidate and was
directly related to -
(A) the promotion, demonstration, or explanation of
products or services; or
(B) the execution or performance of a contract with a
foreign government or agency thereof.
(d) Injunctive relief
(1) When it appears to the Attorney General that any
domestic concern to which this section applies, or officer,
director, employee, agent, or stockholder thereof, is engaged,
or about to engage, in any act or practice constituting a
violation of subsection (a) of this section, the Attorney
General may, in his discretion, bring a civil action in an
appropriate district court of the United States to enjoin such
act or practice, and upon a proper showing, a permanent
injunction or a temporary restraining order shall be granted
without bond.
(2) For the purpose of any civil investigation which, in
the opinion of the Attorney General, is necessary and proper to
enforce this section, the Attorney General or his designee are
empowered to administer oaths and affirmations, subpoena
witnesses, take evidence, and require the production of any
books, papers, or other documents which the Attorney General
deems relevant or material to such investigation. The attendance
of witnesses and the production of documentary evidence may be
required from any place in the United States, or any territory,
possession, or commonwealth of the United States, at any
designated place of hearing.
(3) In case of contumacy by, or refusal to obey a subpoena
issued to, any person, the Attorney General may invoke the aid
of any court of the United States within the jurisdiction of
which such investigation or proceeding is carried on, or where
such person resides or carries on business, in requiring the
attendance and testimony of witnesses and the production of
books, papers, or other documents. Any such court may issue an
order requiring such person to appear before the Attorney
General or his designee, there to produce records, if so
ordered, or to give testimony touching the matter under
investigation. Any failure to obey such order of the court may
be punished by such court as a contempt thereof. All process in
any such case may be served in the judicial district in which
such person resides or may be found. The Attorney General may
make such rules relating to civil investigations as may be
necessary or appropriate to implement the provisions of this
subsection.
(e) Guidelines by Attorney General
Not later than 6 months after August 23, 1988, the Attorney
General, after consultation with the Securities and Exchange
Commission, the Secretary of Commerce, the United States Trade
Representative, the Secretary of State, and the Secretary of the
Treasury, and after obtaining the views of all interested persons
through public notice and comment procedures, shall determine to
what extent compliance with this section would be enhanced and
the business community would be assisted by further
clarification of the preceding provisions of this section and
may, based on such determination and to the extent necessary and
appropriate, issue -
(1) guidelines describing specific types of conduct,
associated with common types of export sales arrangements and
business contracts, which for purposes of the Department of
Justice's present enforcement policy, the Attorney General
determines would be in conformance with the preceding provisions
of this section; and
(2) general precautionary procedures which domestic
concerns may use on a voluntary basis to conform their conduct
to the Department of Justice's present enforcement policy
regarding the preceding provisions of this section. The
Attorney General shall issue the guidelines and procedures
referred to in the preceding sentence in accordance with the
provisions of subchapter II of chapter 5 of title 5 and those
guidelines and
procedures shall be subject to the provisions of chapter 7 of
that title.
(f) Opinions of Attorney General
(1) The Attorney General, after consultation with
appropriate departments and agencies of the United States and
after obtaining the views of all interested persons through
public notice and comment procedures, shall establish a
procedure to provide responses to specific inquiries by domestic
concerns concerning conformance of their conduct with the
Department of Justice's present enforcement policy regarding the
preceding provisions of this section. The Attorney General
shall, within 30 days after receiving such a request, issue an
opinion in response to that request. The opinion shall state
whether or not certain specified prospective conduct would, for
purposes of the Department of Justice's present enforcement
policy, violate the preceding provisions of this section.
Additional requests for opinions may be filed with the Attorney
General regarding other specified prospective conduct that is
beyond the scope of conduct specified in previous requests. In
any action brought under the applicable provisions of this
section, there shall be a rebuttable presumption that conduct,
which is specified in a request by a domestic concern and for
which the Attorney General has issued an opinion that such
conduct is in conformity with the Department of Justice's present
enforcement policy, is in compliance with the preceding
provisions of this section. Such a presumption may be rebutted
by a preponderance of the evidence. In considering the
presumption for purposes of this paragraph, a court shall weigh
all relevant factors, including but not limited to whether the
information submitted to the Attorney General was accurate and
complete and whether it was within the scope of the conduct
specified in any request received by the Attorney General. The
Attorney General shall establish the procedure required by this
paragraph in accordance with the provisions of subchapter II of
chapter 5 of title 5 and that
procedure shall be subject to the provisions of chapter 7 of
that title.
(2) Any document or other material which is provided to,
received by, or prepared in the Department of Justice or any
other department or agency of the United States in connection
with a request by a domestic concern under the procedure
established under paragraph (1), shall be exempt from disclosure
under section 552 of title 5 and
shall not, except with the consent of the domestic concern, be
made publicly available, regardless of whether the Attorney
General responds to such a request or the domestic concern
withdraws such request before receiving a response.
(3) Any domestic concern who has made a request to the
Attorney General under paragraph (1) may withdraw such request
prior to the time the Attorney General issues an opinion in
response to such request. Any request so withdrawn shall have no
force or effect.
(4) The Attorney General shall, to the maximum extent
practicable, provide timely guidance concerning the Department of
Justice's present enforcement policy with respect to the
preceding provisions of this section to potential exporters and
small businesses that are unable to obtain specialized counsel
on issues pertaining to such provisions. Such guidance shall be
limited to responses to requests under paragraph (1) concerning
conformity of specified prospective conduct with the Department
of Justice's present enforcement policy regarding the preceding
provisions of this section and general explanations of
compliance responsibilities and of potential liabilities under
the preceding provisions of this section.
(g) Penalties
(1)
(A) Any domestic concern that violates subsection (a) of
this section shall be fined not more than $2,000,000.
(B) Any domestic concern that violates subsection (a) of
this section shall be subject to a civil penalty of not more
than $10,000 imposed in an action brought by the Attorney
General.
(2)
(A) Any officer or director of a domestic concern, or
stockholder acting on behalf of such domestic concern, who
willfully violates subsection (a) of this section shall be fined
not more than $100,000, or imprisoned not more than 5 years, or
both.
(B) Any employee or agent of a domestic concern who is a
United States citizen, national, or resident or is otherwise
subject to the jurisdiction of the United States (other than an
officer, director, or stockholder acting on behalf of such
domestic concern), and who willfully violates subsection (a) of
this section, shall be fined not more than $100,000, or
imprisoned not more than 5 years, or both.
(C) Any officer, director, employee, or agent of a domestic
concern, or stockholder acting on behalf of such domestic
concern, who violates subsection (a) of this section shall be
subject to a civil penalty of not more than $10,000 imposed in
an action brought by the Attorney General.
(3) Whenever a fine is imposed under paragraph (2) upon any
officer, director, employee, agent, or stockholder of a domestic
concern, such fine may not be paid, directly or indirectly, by
such domestic concern.
(h) Definitions
For purposes of this section:
(1) The term ''domestic concern'' means -
(A) any individual who is a citizen, national, or resident
of the United States; and
(B) any corporation, partnership, association, joint-stock
company, business trust, unincorporated organization, or sole
proprietorship which has its principal place of business in the
United States, or which is organized under the laws of a State
of the United States or a territory, possession, or commonwealth
of the United States.
(2) The term ''foreign official'' means any officer or
employee of a foreign government or any department, agency, or
instrumentality thereof, or any person acting in an official
capacity for or on behalf of any such government or department,
agency, or instrumentality.
(3)
(A) A person's state of mind is ''knowing'' with respect to
conduct, a circumstance, or a result if -
(i) such person is aware that such person is engaging in
such conduct, that such circumstance exists, or that such result
is substantially certain to occur; or
(ii) such person has a firm belief that such circumstance
exists or that such result is substantially certain to occur.
(B) When knowledge of the existence of a particular
circumstance is required for an offense, such knowledge is
established if a person is aware of a high probability of the
existence of such circumstance, unless the person actually
believes that such circumstance does not exist.
(4)
(A) For purposes of paragraph (1), the term ''routine
governmental action'' means only an action which is ordinarily
and commonly performed by a foreign official in -
(i) obtaining permits, licenses, or other official
documents to qualify a person to do business in a foreign
country;
(ii) processing governmental papers, such as visas and work
orders;
(iii) providing police protection, mail pick-up and
delivery, or scheduling inspections associated with contract
performance or inspections related to transit of goods across
country;
(iv) providing phone service, power and water supply,
loading and unloading cargo, or protecting perishable products
or commodities from deterioration; or
(v) actions of a similar nature.
(B) The term ''routine governmental action'' does not
include any decision by a foreign official whether, or on what
terms, to award new business to or to continue business with a
particular party, or any action taken by a foreign official
involved in the decision-making process to encourage a decision
to award new business to or continue business with a particular
party.
(5) The term ''interstate commerce'' means trade, commerce,
transportation, or communication among the several States, or
between any foreign country and any State or between any State
and any place or ship outside thereof, and such term includes the
intrastate use of -
(A) a telephone or other interstate means of communication,
or
(B) any other interstate instrumentality.