Professor: Ms. Gleason
A Traveler's Guide to Gifts and Bribes
Harvard Business Review
Why might bribery become a problem for U.S. managers working in foreign countries?
The FCPA was structured to help U.S. companies understand what bribery is, and what is or is not acceptable behavior at home and in other countries. The confusing issue is that even with this guidance, it is not always clear what exactly is to be considered a bribe. Under the Act, not all payments are deemed to be bribes. FCPA doesn’t forbid payments to lesser figures, it allows bribes to facilitate ongoing business activities, as there is no monetary guideline it requires companies to keep reasonable records of the transaction. Brides given to influence political decisions are banned and usually small payments that are designed to get a foreign official to perform a non-discretionary function. The distinction between the two is blurred. Confounding this is that many U.S. business people do not know what is permitted and what is not, as there is no clear guidance. As there is no clear guidance on what you can and can’t do working with foreign countries a lot of U.S. Managers could actually be offering bribes that should actually be banned. This creates no equal opportunity for everyone; the foreign company will go with whomever’s bribe seems to be greater. This will create a huge problem because this is where a lot of U.S. manger will cross the line just to win the business.
What are the major features of the Foreign Corrupt Practices Act (FCPA)?
The Foreign Corrupt Practices Act (FCPA) was enacted in 1977 and substantially revised in 1988. The FCPA generally prohibits corrupt payments to foreign officials. To complement this prohibition, the FCPA has accounting provisions that require maintenance of transparent and complete financial records. The Justice Department enforces the anti-bribery provisions, while the Securities and Exchange Commission has
References: Fadiman, J. A. (July-august, 1986) A Travelers Guide to Gifts and Bribes Retrieved May 3, 2011 from Harvard Business Review, Graham, J. L (Winter, 1984) The Foreign Corrupt Practices Act: A New Perspective Retrieved May 3, 2011 from http://www.jstor.org/pss/154278 Hart, H. (July 31, 2001) Anti-Corruption Provisions of the U.S. Foreign Corrupt Practices Act Retrieved May 3, 2011 from http://www.hollandhart.com/articles/FCPA.pdf Shira, D. (October 14, 2010) U.S. Business, China and the Foreign Corrupt Practices Act Retrieved May 4, 2011 from http://www.china-briefing.com/news/2010/10/14/u-s-business-china-and-the-foreign-corrupt-practices-act.htm Sklar, H. M. (February 07, 2011) On Facilitation Payments Retrieved May 5, 2011 from http://openairblog.wordpress.com/2011/02/07/on-facilitation-payments/