The Foreign Corrupt Practices Act (FCPA) is legislation that was enacted in 1977 to curb
the growing trend of overseas bribery and corruption. Bribery under the act consist of an
‘offer’, a ‘payment’ and promise to pay or pay a 3rd party for beneficial trade contracts or
business favors. Those 3rd parties are a foreign official (https://www.youtube.com/watch?
v=08zZKp4EGeQ). The departments that helps enforce the FCPA are the Department of
Justice and the FCC. While bribery is often thought of as money it can include meals, trips
or gifts as in the example of Avon who alleged gave such things to Chinese officials to
gain favor
(http://www.wsj.com/articles/SB1000087239639044386260457802846229461135).
The FCPA is very important to business. Failure to comply can lead to jail times and very
stiff penalties. Plus having to hire lawyers, internal investigations can easily cost a
company 100’s of millions. However, the importance of the FCPA should not only be
thought of as a deterrent. The true importance is that it lays down an ethical groundwork
and a playing level field for companies to compete overseas. This is good for all
businesses. By creating a level playing field businesses compete on their own merits and
don’t have any unfair advantages.
There are many countries where paying an official for favors is common place and
expected. I often think of the scripture “Don’t let evil conquer you, but conquer evil by