Foreign Corrupt Practices Act (FCPA

The Foreign Corrupt Practices Act of 1977 (FCPA) a United States federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under theSecurities Exchange Act of 1934 and another concerning bribery of foreign officials.

Whilst this is often standard policy at corporate head offices, ‘on the ground’ realities often mean that managers tasked with operating your business in emerging markets may attempt to circumvent regulations to achieve a sale.

Corrupt payments are rarely openly sought; instead, bribes are often exchanged by contracting a company associated with the politician to provide ‘services’ (i.e. international vendors), or by appointing a sales agent associated with a government official to close the deal.

Section 302, Paragraph 5 of the Sarbanes-Oxley Act (SOX) relates to the disclosures management must make to its auditors. It includes “any fraud, whether material or not, that involves management or other employees who have a significant role in the issuer’s internal controls.” Section 404 requires a company present a written presentation of the effectiveness of its internal controls. The SEC states “internal controls must include policies and procedures that address Fraud Detection”.