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The Foreign Corrupt Practices Act; part two

In a previous blog, we reviewed two provisions of the Foreign Corrupt Practices Act. If you are part of a company in California that is involved in international business transactions, you may have more questions about this law, particularly because violations can result in investigations, sanctions and penalties that could cost your company millions. We at the Daily Law Group have a deep understanding of all the legal aspects of the FCPA, and how companies can stay safely within its boundaries.

There are two factors that we should define further in order to clarify whether a payment--or a promise or offer of payment--made to a foreign official in the course of doing international business is, in fact, an illegal bribe.

The definition of foreign official

Who the bribe is intended for is an essential component of the violation. The American Bar Association explains that, according to the FCPA, a "foreign official" is someone working for a foreign government, whether that is a department within the government or a government agency. The term could also apply to someone who is acting as a representative of the government or government agency or instrumentality, or a representative of a public organization.

The law also prohibits a bribe given to a third party with the intent that it be offered or given to a foreign official. It could also be considered an illegal bribe if it is given to a friend or family member of the foreign official with the intent of influencing him or her.

The business purpose test

The FCPA is only enforceable if the intent of the bribe is to influence an official in another country to use his or her position to help the company gain or retain business there. In order to fall afoul of the law, you must actually know that you are intending to use illegal methods to further your business, but you do not have to have knowledge of the law, specifically. 

If the Securities and Exchange Commission or the Department of Justice discovers that you intend to bribe a foreign official, even if the recipient of the bribe is not discovered, and you have not actually completed the transaction, you may still face civil and criminal penalties.

More information about international business transactions is available on our webpage.

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