The government’s prosecution of cases under the Foreign Corrupt Practices Act has resulted in record-shattering fines and criminal convictions of executives. And it seems as though its use will be increasing.
Thus far in 2010 the Dept. of Justice has carried out a dozen prosecutions, after 19 prosecutions in 2009. In addition, the Securities & Exchange Commission has brought civil cases under the law.
Though the FCPA was passed shortly after Watergate, it wasn’t used much. With the growing awareness of the damage corruption can do to economies, federal officials have extended its geographic scope and used it to penetrate entire industries, such as investigating whether drug makers are paying overseas bribes to boost sales.
The FCPA prohibits U.S. companies from paying, or offering to pay, foreign government officials or employees of state-owned companies to gain a business advantage. It applies to any company that trades on a U.S. exchange, not just U.S.-based companies.