U.S. Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. §§ 78dd-1, et seq.) with the DOJ/SEC Resource Guide, Second Edition (2020)

Why it Matters

FCPA enforcement produces some of the largest corporate criminal and civil resolutions in the world, and liability reaches parent companies for the conduct of subsidiaries, agents, and joint venture partners. The accounting provisions apply to every issuer regardless of whether a bribe is paid, so books and records and internal controls failures are themselves violations.

Key benefits include:

• Prevent corrupt payments

Control gifts, hospitality, charitable and political contributions, and third-party payments that could be offered to foreign officials.

• Satisfy the accounting provisions

Keep books and records that accurately and fairly reflect transactions and maintain internal accounting controls that provide reasonable assurance.

• Manage third-party risk

Apply risk-based due diligence and monitoring to agents, distributors, consultants, and joint venture partners who act on the company's behalf abroad.

• Earn credit under DOJ and SEC policies

Voluntary self-disclosure, cooperation, remediation, and an effective compliance program shape charging decisions and penalties under the Corporate Enforcement Policy.

• Align with global anti-corruption laws

Run one program that also satisfies the UK Bribery Act, ISO 37001, and national laws implementing the OECD Anti-Bribery Convention.

How it Works

The anti-bribery provisions apply to issuers, domestic concerns, and persons acting within U.S. territory, and prohibit the willful use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise, or authorization of anything of value to a foreign official, while knowing that all or part of it will be passed to a foreign official, to obtain or retain business. The accounting provisions require issuers to make and keep accurate books and records and to devise and maintain an adequate system of internal accounting controls. The Resource Guide explains who is covered, the definition of foreign official, the affirmative defenses, the facilitating payments exception, penalties, and DOJ and SEC enforcement practice.

Companies implement the FCPA by assessing corruption risk by country, business line, and interaction with government, adopting an anti-corruption policy and procedures on gifts, travel, entertainment, and donations, conducting risk-based due diligence on third parties with contractual anti-corruption terms and audit rights, embedding approval and documentation controls in payment and expense processes, training employees and intermediaries, providing reporting channels, investigating allegations, and remediating and, where appropriate, self-disclosing. The Resource Guide's hallmarks of effective compliance programs and the DOJ Evaluation of Corporate Compliance Programs are the benchmarks.

SmartSuite operationalizes the FCPA by holding the anti-bribery and accounting provisions and the Resource Guide hallmarks as a requirement set linked to the corruption risk assessment, policies, third-party due diligence, gifts and hospitality approvals, payment controls, training records, and investigations, with owners, dates, and an audit trail.

Key Elements

• Anti-bribery provisions

Prohibit corrupt offers, payments, promises, or authorizations of anything of value to a foreign official to obtain or retain business or secure an improper advantage.

• Books and records provision

Issuers must make and keep books, records, and accounts that accurately and fairly reflect their transactions and dispositions of assets.

• Internal accounting controls provision

Issuers must devise and maintain a system of internal accounting controls sufficient to provide reasonable assurance over transactions and access to assets.

• Jurisdiction and covered persons

Issuers, domestic concerns, and foreign persons acting within U.S. territory, extended by the 1998 amendments.

• Third parties and knowledge

Liability extends to payments made through intermediaries where the company knows or consciously disregards a high probability that the payment will reach a foreign official.

• Hallmarks of effective compliance programs

The Resource Guide describes commitment from senior management, a code of conduct, oversight and autonomy, risk assessment, training, incentives and discipline, third-party due diligence, confidential reporting, investigation, and continuous improvement.

• Enforcement and resolution policies

DOJ and SEC guiding principles of enforcement, the Corporate Enforcement Policy, self-reporting and cooperation credit, penalties, monitors, and the DOJ opinion procedure.

Framework Scope

The anti-bribery provisions apply to U.S. and foreign issuers of securities registered in the United States, to domestic concerns including U.S. citizens, residents, and businesses, and to foreign persons and companies that act in furtherance of a corrupt payment within U.S. territory. The accounting provisions apply to issuers and their consolidated subsidiaries and affiliates. The Act is implemented by compliance, legal, finance, internal audit, and procurement functions and by every business unit that deals with government customers, licences, or officials abroad.

Framework Objectives

Congress enacted the FCPA to make it unlawful to bribe foreign government officials to obtain or retain business and to ensure that issuers keep accurate books and adequate internal controls.

Prohibit corrupt payments to foreign officials by U.S. persons, issuers, and those acting within U.S. territory.

Require issuers to maintain accurate books and records and adequate internal accounting controls that operate in tandem with the anti-bribery provisions.

Reach conduct carried out through subsidiaries, agents, and other third parties.

Give companies transparency on enforcement practice through the Resource Guide, the Corporate Enforcement Policy, and the opinion procedure.

Encourage effective compliance programs, self-reporting, cooperation, and remediation.

Support international anti-corruption commitments including the OECD Anti-Bribery Convention.

Framework in Context

The FCPA sits alongside the UK Bribery Act as the principal extraterritorial anti-bribery law, and the Resource Guide expressly incorporates the Sentencing Guidelines' §8B2.1 and the DOJ Evaluation of Corporate Compliance Programs in describing effective programs. Its accounting provisions overlap with SOX internal control over financial reporting and COSO, and multinational programs typically map it to ISO 37001, ISO 37301, and the OECD Anti-Bribery Convention.

Common Framework Mappings

Companies map the FCPA's anti-bribery and accounting provisions and the Resource Guide hallmarks to the compliance benchmarks, control frameworks, and other anti-corruption laws they must satisfy so one program and one evidence base serve them all.

Mapped frameworks include:

UK Bribery Act 2010

DOJ ECCP

USSG §8B2.1

SOX

COSO IC 2013

COSO ERM 2017

ISO 31000:2018

OCEG Red Book 3.5

IIA Three Lines Model

ISO 37001:2016

ISO 37301:2021

OECD Anti-Bribery Convention