Business Studies

ANSWER

Foreign Corrupt Practices Act

Explain what the employees should know regarding the Foreign Corrupt Practices Act

Employees should know that it is unlawful to offer, pay or promise to pay anything of value to foreign officers to obtain business favors. There should not be favors between foreign officials and employees as a prerequisite for obtaining business. The cat prohibits employees from falsifying books and knowingly failing to implement internal control measures (Perlman & Sykes, 2017).

Provide examples with specific companies of Foreign Corrupt Practices Act violations

In 2008, Siemens AG pled guilty to bribery and violation of FCPA accounting provisions. Siemens reached a settlement of $800 million for these violations. Total paid more than $60 million to Iranian officials pretending to be consulting agencies. The total was investigated by authorities and later required to pay about $400 million in fines.

Identify company actions or red flags that might indicate violations of the act

Failure to implement anti-bribery policies exposes a company to possibilities of violations of the act. When bribery exists between the company and foreign officials, a violation of the FCPA is considered to have been made. Companies that fail to implement internal controls such as diligent bookkeeping, record keeping, and auditing on payments violate the FCPA.

List any consequences of the violations

• For bribery violations, the Department of Justice subjects individual violators to criminal charges which can attract a fine of $250,000 or five years imprisonment.
• Each anti-bribery violation incurs a fine of up to $2 million for corporate bodies and other business entities.
• In anti-bribery violations, a civil penalty of $16,000 is placed on individuals and entities for each violation
• Accounting violations attract a penalty of up to $25 million for each violation for enterprises.
• Individuals face up to 20 years’ imprisonment and $5 million per violation in accounting violations.
• Enterprises face up to $750,000 while individuals face up to $150,000 in civil penalties for accounting violations.

Recommend actions to report possible violations

Possible violations should be reported to the Department of Justice for further investigation and action.

Describe protections for whistleblowers. Why are they important? how do they impact the act?

FCPA provides protections for whistleblowers to ensure that they have convenient room to reveal wrongdoing and remain anonymous hence preventing retaliation and victimization. A whistleblower is eligible to receive between 10 and 30 percent of sections generated from violations. Whistleblowers are a key part of the FCPA because without them many internal violations would go unnoticed.

Reference

Perlman, R. L., & Sykes, A. O. (2017). The Political Economy of the Foreign Corrupt Practices   Act: An Exploratory Analysis. Journal of Legal Analysis, 9(2), 153-182.