Ethics and Compliance : Foreign Corrupt Practices Act

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act of 1977 (FCPA) is a United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials. Being part of the US-owned AES group of companies, all AES companies based in Bulgaria are obliged to comply with the requirements of the FCPA. The anti-bribery provisions of the FCPA make it unlawful for a U.S. person to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person. Since 1998, they also apply to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. To the extent that they are considered to represent AES, all contractors, suppliers, consultants, agents and other companies and individuals who do business with AES are also expected to comply with the FCPA. The Act governs not only payments to foreign officials, candidates, and parties, but any other recipient if part of the bribe is ultimately attributable to a foreign official, candidate, or party. These payments are not restricted to just monetary forms and may include anything of value. The following criminal penalties may be imposed for violations of the FCPA’s anti-bribery provisions: corporations and other business entities are subject to a fine of up to $2,000,000; officers, directors, stockholders, employees, and agents are subject to a fine of up to $100,000 and imprisonment for up to five years. Moreover, under the Alternative Fines Act, these fines may be actually up to twice the benefit that the defendant sought to obtain by making the corrupt payment. Fines imposed on individuals may not be paid by their employer or principal. A civil action may also be brought by the Attorney General or the SEC for a fine of up to $10,000 against any firm as well as any officer, director, employee, or agent of a firm, or stockholder acting on behalf of the firm, who violates the anti-bribery provisions. A company found in violation of the FCPA may also be barred from doing business with the Federal government. Further information on the FCPA may be found here.