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The Foreign Corrupt Practices Act (FCPA) is a United States law that prohibits US companies and individuals from bribing foreign government officials or engaging in other corrupt practices in order to win business or gain a business advantage.
The FCPA applies to US companies and individuals, as well as foreign companies and individuals that have a connection to the US, such as those listed on US stock exchanges or those that use US banks.
To comply with the FCPA, businesses should:
Establish a compliance program: Companies should establish a compliance program to prevent and detect potential violations of the FCPA. This may include policies and procedures for gifts, hospitality, entertainment, and other business expenses, as well as due diligence procedures for third-party agents and intermediaries.
Train employees: Companies should provide training for employees on the FCPA and the company's compliance policies and procedures.
Conduct due diligence: Companies should conduct due diligence on third-party agents and intermediaries to ensure that they are reputable and will not engage in corrupt practices.
Implement appropriate controls: Companies should implement appropriate controls to prevent and detect potential violations of the FCPA, such as monitoring for suspicious transactions, conducting audits, and establishing internal reporting mechanisms.
Monitor compliance: Companies should monitor compliance with the FCPA and their compliance program, and periodically review and update their policies and procedures as needed
Criminal penalties for individuals can include fines of up to $5 million and imprisonment of up to 20 years, while companies can face fines of up to $25 million for each violation of the FCPA. In addition to these fines, individuals and companies can also face other penalties such as disgorgement of profits and debarment from government contracts.