FCPA Contractual Provisions in Alliance and Joint Venture Agreements


As was recently shown by the RAE Systems, Inc., enforcement action, foreign Joint Ventures are still the bane for many companies under the Foreign Corrupt Practices Act (FCPA). Similarly Alliance or Consortium Agreements can place a US company at risk for the actions of others which may violate the FCPA. This post will set forth some of the risk management techniques that companies can use to assist in controlling this FCPA exposure through the utilization of contractual clauses.

As a starting point, we believe that it is important to have compliance terms and conditions, these reasons can include some of the following: (1) To set expectations between the parties; (2) To demonstrate the seriousness of the issue to the non-US party; and (3) To provide a financial incentive to do business in compliant manner.

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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.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

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