An "issuer" is any company that has securities registered in the United States or is otherwise required to file periodic reports with the SEC. "issuers" and "domestic concerns" must obey the FCPA, even when acting outside the country. Who Is Covered by the FCPA? The FCPA applies to two broad categories of persons: those with formal ties to the United States and those who take action in furtherance of a violation while in the United States. The latter are designed to prevent accounting practices designed to hide corrupt payments and ensure that shareholders and the SEC have an accurate picture of a company's finances. The FCPA contains both antibribery prohibitions and accounting requirements. With this knowledge and commitment to ethical business practices, an organization can implement an effective compliance program to avoid the pitfalls of international corruption. Finally, the managers who run the organization must be able to recognize "red flags"-circumstances under which the risk of corrupt practices is high and enforcement authorities expect corporations to be particularly vigilant. Leaders and legal advisors must also remain up to date on trends in enforcement. regulations against money laundering, racketeering, and conspiracy.
In order to minimize the risks posed by foreign bribery, an organization must have a clear understanding of the practices prohibited by the FCPA and other applicable laws, such as U.S. The United States Department of Justice ("DOJ") and the Securities and Exchange Commission ("SEC") are leading the international fight against corruption by increasing the number of investigations, settlements, and prosecutions for violations of the Foreign Corrupt Practices Act ("FCPA" or the "Act").īecause of this increased enforcement activity, managers and directors who run multinational corporations are rightfully concerned about their compliance efforts.
Corruption poses a significant legal and economic risk for corporations doing business around the world, particularly in developing and transitioning countries.
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