The Foreign Corrupt Practices Act (“FCPA”), is legislation that was designed to curb bribery and corruption of foreign nationals by US companies. The FCPA was first passed in 1977. This law was meant to “level the playing field” between American companies that conduct business overseas. All forms of corruption, e.g. bribery, is illegal in the US; therefore, applying these same rules to American companies that do business overseas makes sense and levels the playing field for smaller businesses that compete with conglomerates.
Of course, as with many laws, the FCPA has its critics. Chief amongst the complaints is that the FCPA makes US companies uncompetitive abroad. It has also been criticized as being an additional “red-tape” measure. Nonetheless, the law being investigated and prosecuted by the DOJ and/or SEC and is seen as a priority by the agencies involved in enforcing it. In 2019 alone, 34 prosecutions were initiated for violations of the FCPA. Prosecutions of note of large companies under the FCPA include: Goldman Sachs was hit with $3.3B in 2020, Airbus was hit with $2B in 2020, Ericsson was hit with a $1B settlement in 2019, and Halliburton was hit with $579M in 2009.
A federal criminal attorney experienced with the Foreign Corrupt Practices Act and anti-bribery legislation can carefully evaluate a company’s FCPA investigation / violation. Of note is that the FCPA’s anti-bribery provisions contain two affirmative defenses: (1) that the payment was lawful under the written laws of the foreign country, or “the local law defense,” and (2) that the money was spent as part of demonstrating a product or performing a contractual obligation, the “reasonable and bona fide business expenditure” defense. Because these are affirmative offenses, the defendant bears the burden of proving them.
How much can I get fined for an FCPA Violation?
The FCPA can come with serious consequences. Each violation of the act can come with hefty fines and considerable penalties both civil and criminal. Being found guilty of violating the anti-bribery or accounting provisions of the act can cost a business anywhere from $2 Million and up to $25 Million in fines respectively. On the civil side, individuals can be fined over $20,000 per violation of the act. These are serious penalties and should not be treated lightly. Furthermore, being found guilty of this crime can lead to repercussions in conducting business further down the road.
The FCPA is complex. There is also a history of precedents the courts consider when prosecuting FCPA violations. Most people will never come across an FCPA violation or have to follow FCPA’s guidelines. But, if you have been charged with violating the laws created by the FCPA, it is paramount to contact an attorney experienced not only with white-collar crime criminal defense but also one who understands federal prosecution. Manny Arora has years of criminal defense at the federal level. He has worked both as a prosecutor and defense attorney so he knows what the prosecution will look for and how to counter with a strong defense. If you have been charged with an FCPA violation, contact the Arora Law Firm today. Click here or call us at (404) 609-4664.