spRING 2011 GlobAl MARKETs INTERNATIoNAl - Willis

FoReigN CoRRuPt PRaCtiCes aCt
The U.S. Foreign Corrupt Practices Act (‘FCPA’) was enacted in 1977, after the results of
a large-scale investigation by the U.S. Securities and Exchange Commission (‘SEC’) shocked the
public with evidence that U.S. public companies had spent over USD 300 million bribing foreign
officials. The FCPA, which prohibits both individuals and entities from bribing foreign officials
in order to secure an improper advantage for obtaining or retaining business, has two main
component sections:
1 The first section, made up of so-called ‘anti-bribery’ provisions, is enforced by the U.S.
Department of Justice (‘DOJ’).
2 The second section, known as the ‘accounting’ provisions of the FCPA, is enforced by the SEC.
By regulating the commercial activities of any individual acting whilst in the U.S., and extending
to all U.S. citizens, companies, and any company listed on any U.S. stock exchange, the FCPA’s
jurisdictional influence extends worldwide.
While the FCPA was only sparingly enforced during its first 25 years of existence, the past decade
has shown notably increased scrutiny by federal regulators, providing examples of some large-scale
settlements, including the following.
The 2008 Siemens settlement, which produced one of the largest fines on record—
USD 800 million—imposed by the DOJ. (Further fines of EUR 600 million were levied
by German authorities).
After one of its business units was charged with bribing Nigerian officials during the construction
of a gas plant, Haliburton paid USD 559 million in penalties.
After BAE Systems was accused of ‘wilfully misleading’ and conspiring to make false statements
to the U.S. government, it paid GBP 250 million in fines, and was also separately charged in the
U.K. for unrelated offences.
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