PointofLaw has been closely following the debate and reform efforts with regard to the Foreign Corrupt Practices Act. Passed in 1977, the FCPA prohibits companies from paying bribes to foreign officials in an attempt to win business. According to the WSJ, enforcement of the FCPA has led to approximately $4 billion in penalties against corporations in just the past 5 years. While proponents of staunch enforcement of the Act claim that the FCPA levels the playing field, opponents argue that the law is overly vague and detrimental to American businesses.
Some specific proposals to reform the FCPA include:
- Allowing companies to avoid liability if they can prove they had robust measures in place to prevent bribes, such as training programs.
- Offering companies a reduction in penalty--as much as 40%--if they self-report a possible violation. Companies could receive additional discounts for informing on other companies involved in corrupt practices.
- Quantifying credit for real cooperation so companies and boards can make informed decisions.
- A grace period allowing companies to investigate new acquisitions and disclose what they find without fear of prosecution.
This growing debate has gained some attention in light of reports that Pfizer is near an over $60 million dollar settlement to resolve investigations of alleged FCPA violations by the company in its efforts to win business overseas. And it seems support for FCPA reform cuts across many industries, even those which may come unexpected.