The Foreign Corrupt Practices Act was intended to prohibit bribery of foreign officials by American corporations. This report discusses the Foreign Corrupt Practices Act of 1977, the 1988 amendments, the 1998 amendments bringing the Act into conformance with the Organization for Economic Cooperation and Developments agreements on bribery, and the hits the Anti bribery laws have taken.
The Foreign Corrupt Practices Act was implemented principally to prevent corporate bribery of foreign officials. The act had three major parts: 1. It required the keeping of accurate books, records, and accounts by corporations; 2. It required issuer's registered with the Securities and Exchange Commission to maintain a responsible internal accounting system; and 3. It prohibited bribery by American corporations of foreign officials. The Act was amended in 1988 in response to criticism and was again amended in 1998 in order for it to comply with the Organization for Economic Cooperation and Development's agreement on bribery.
(1)The reasoning behind the Foreign Corrupt Practices Act was in the mid 1970's investigations and administrative and legal actions against numerous domestic corporations revealed that the practice of making questionable or illegal payments by United States corporations to foreign government officials existed to some extent within the American business community.
Government officials and administrators contended that more direct prohibitions on foreign bribery and more detailed requirements concerning corporate record keeping and accountability were needed to deal effectively with the problem. Tow of the three provisions of the 1977 act provided criminal penalties for any American business which used the mail or interstate commerce corruptly in furtherance of an offer or payment of money to a foreign official or to a political party in order to influence the person in his or her decision making or assist the firm in obtaining or retaining business.
The 1977 Act also...