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Foreign Corrupt Practices Act

Foreign Corrupt Practices Act

Elliott Sauter is a firm founded by former federal prosecutors with experience evaluating, prosecuting, and defending FCPA cases. This experience gives us a thorough understanding of the procedures and tactics used at each stage of civil or criminal FCPA investigation.

Under the anti-bribery provisions of the Foreign Corrupt Practices Act (the “FCPA”), companies and individuals are prohibited from paying bribes or otherwise transferring anything of value to any foreign government official in exchange for assistance in obtaining or retaining business. In addition, publicly traded companies are required to implement certain accounting and record-keeping controls and practices which facilitate the detection and prevention of improper payments.

FCPA Enforcement Agencies

Both the Department of Justice (“DOJ”) and Securities Exchange Commission (“SEC”) have authority to bring enforcement actions under the FCPA. The SEC’s enforcement is limited to civil enforcement against companies registered with the SEC or listed on a U.S. stock exchange, while the DOJ brings all civil actions against unregistered entities and individuals and is responsible for bringing all criminal actions.

Potential Penalties

Potentials Penalties under the FCPA may be severe for companies and individuals alike.

Criminal Penalties
Include:

  • For companies, fines of up to $2 million per violation of the anti-bribery provisions and fines of up to $25 million for violations of the accounting and record-keeping provisions.
  • For individuals, incarceration of up to five years per violation and fines up to $250,000 per violation of the anti-bribery provisions and incarceration of up to twenty years and fines up to $5 million for violations of the accounting and record keeping provisions.
  • Alternatively, criminal fines may be calculated under the profit disgorgement up to twice the gross gain intended by the defendant.

 

Civil Penalties
Include:

  • For companies, penalties of up to $16,000 per violation of the anti-bribery provisions and penalties ranging from $75,000 to $725,000 for violation of the accounting and record-keeping provisions.
  • For individuals, penalties of up to $16,000 per violation of the anti-bribery provisions and penalties ranging from $7,500 to $150,000 for violation of the accounting and record-keeping provisions.

Company Enforcement Mitigation

Companies that learn of misconduct may attempt to mitigate liability under the FCPA by:

  1. Self-disclosing the Violation
  2. Fully Cooperating with the FCPA Investigation
  3. Implementing Appropriate Remedial Measures in a Timely Manner.

Such action may result in a declination to prosecute, or where sufficient aggravating factors are found and declination is not appropriate, a 50% reduction from low-end U.S. Sentencing Guidelines. If a company cooperates and implements appropriate remedial measures but did not self-disclose, it may be eligible for a 25% reduction from low-end U.S. Sentencing Guidelines.

Contact

Elliott Sauter, PLLC

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