Congress, Get Out Your Pencils: FCPA Rules Are Ripe for Revision

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The cycle of certain laws is all too familiar. A specific issue or need arises and gains national attention. Congress drafts a law with the best intentions of solving the problem. Experts and the public applaud the legislation for bringing significant change. Only years later does the country discover that there are additional consequences beyond what the drafters intended. The discovery of these new issues sends Congress back to the drawing board.

The Foreign Corrupt Practices Act (FCPA) is a prime example of a law that has been through this cycle and needs to be redrafted. When the legislation was first passed in 1977, the federal government had recently discovered that American companies were making millions of dollars in bribes to various foreign government officials. The FCPA prohibits companies and individuals from offering or making payments to any foreign official for the purpose of inducing the recipient to direct new or continuing business to the briber.

More than 30 years later, the basics of this law are still necessary to prevent and punish unethical bribes, but businesses have discovered that the U.S. Department of Justice's (DOJ) interpretation of the law is broader than anyone intended.

Recently, the DOJ dramatically increased the number of investigations and actions related to the act. Unlike the activity in 1977, this heightened enforcement does not come from illegal bribes but the DOJ's broad interpretation of the law, which is now being applied to otherwise legitimate and ethical actions.

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Published In: Administrative Agency Updates, General Business Updates, Criminal Law Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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