BY AURELIA MITCHELL DURANT Globalization has become a reality for the planet. The very loose and fluid definition of globalization is summed in an often-quoted quote by former Secretary-General of...
Originally posted 2012-07-20 13:26:19.
“KDBM Publishing” (a fictitious company) has recently expanded its business in Hong Kong, China. There, they face higher printing costs than back home in the United States. Members of KDBM have offered payment to local government officials in China to try and get discounted printing prices. This action constitutes bribery, and is in direct violation of the FCPA, or the Foreign Corrupt Practices Act. The FCPA conceptually falls under a larger legal issue known as Corporate Compliance.
Corporate compliance is the measures that corporations take to make sure that the way they conduct business complies with relevant laws and regulations. With the rising demand for operational transparency, corporations are adopting more compliance controls. One piece of legislation that has had a profound impact on the way US firms conduct business is the Foreign Corrupt Practices Act.
The FCPA is known widely for its two main provisions: the requirement for accounting transparency, and the efforts to stop the bribing of foreign officials. The former is subject to any company whose securities are listed in the United States. Any company subject to the accounting provision under the FCPA are required to keep books and financial records that accurately reflect the company’s transactions, as well as create and maintain a system of internal accounting controls.
The latter provision makes it unlawful for any United States citizen and certain foreign financiers to make payments to foreign officials in order to gain unfair commercial advantages. Any employee of an international organization, such as the United Nations, is considered a foreign official under the FCPA. Furthermore, the act focuses on the intent of bribery rather than the amount of the bribe. This means that anything of value is a bribe; cash items, or non-cash items.
Measures such as the FCPA are taken to ensure that organizations conduct their business within the confines of local laws and regulations so as to ensure an ethical and honest business climate.
For more information about International Corporate Compliance, contact the AMD Law Group at www.amdlawgroup.com or (800) 605-0785.