Question

In some countries, what we characterize as "bribery" is an accepted practice. When operating in such an environment, should a company based in the U.S. pay the bribes? What are the legal implications? Research the internet and present one recent example of such a situation. Cite your sources.

Answer 1

In some countries, what we characterize as "bribery" is an accepted practice. When operating in such an environment, should a company based in the U.S. pay the bribes? What are the legal implications? Research the internet and present one recent example of such a situation. Cite your sources.

Definition:

“Bribery is an act of offering money or facilities in exchange for some favors.”

“In 2018 Somalia, Sudan and Syria have been listed as the most corrupt countries in the world by the Transparency International’s Corruption Perception Index, which ranks countries based on their perceived level of public sector corruption.” It further states that 180 countries are making no efforts to end corruption.

US laws and Bribery:

According to the foreign corrupt practices act 1977, it has two provisions in relation to anti-bribery and accounting.

• Anti-bribery makes it a crime for a US individual, a US business entity, or an employee of a US entity to offer or provide directly or indirectly anything of value to a foreign government official with corrupt intentions to influence a business deal or get an unfair advantage.
• The accounting provisions make it illegal to report incorrect or false accounts to the SEC. They cannot maintain inaccurate books or fail to maintain a system for internal accounting controls.

According to statistics, 52 people were indicted, sentenced, or awaiting sentence under FCPA and total penalties imposed under FCPA in 2010 were to the tune of $ 1.8 Billion.

Legally ever US organization has to follow FCPA compliances and if they are doing business outside the US they have to follow the compliances with the law. The business houses have to integrate FCPA into their international policies and operating systems.

An example:

"We quote an example of a former president of Florida based Telecom consulting service, he was accused of conspiring with many others and helping them to transfer hundred thousands of dollars. These were sent through shell companies to the main employees of Haiti state-owned telecommunications company."

The president argued that it was not a criminal offense, as he had not transferred the money to foreign officials. The court rejected his argument and told him to use common intelligence while understanding the word “foreign officials”.

Reference:

US firm says foreign bribe-law lacks clarity