FCPA & anti-corruption
Factual definition
The U.S. Foreign Corrupt Practices Act addresses certain corrupt payments or offers to foreign officials to obtain or retain business, and imposes accounting and internal-control requirements on issuers. Coverage depends on jurisdiction, conduct and other legal elements.
Investigate customs payments before drawing a liability conclusion
Hypothetical: diligence identifies payments associated with customs clearance at an acquisition target. Investigate whether they are lawful official fees or potentially improper payments, who received them and their purpose.
Assess applicable jurisdiction, successor liability and continuing conduct rather than assuming every payment creates liability at closing.
Resolve the purpose of the intermediary payment
Hypothetical diligence finding. A customs consultant submits a US$40,000 invoice for vaguely described clearance services and asks that US$20,000 go to an unrelated offshore account.
The file contains no explanation of that recipient or evidence of the work. These facts call for investigation; they do not by themselves establish every element of an FCPA violation.
Obtain the contract, recipient ownership, service evidence, payment instructions and any official fee schedule or receipt. Establish what the consultant was engaged to do, who would receive the money and why.
In this scenario, an invoice labelled “consulting” is insufficient support for accepting the unexplained transfer as an ordinary cost. Escalate the unresolved facts before approving it.
The DOJ and SEC resource guide discusses vague services, unusual payment arrangements and third-party diligence. Apply the relevant jurisdiction and legal elements to the facts, and assess the target’s records and controls as well as the payment.
A seller’s assurance that “everyone uses this agent” does not answer the missing evidence.
Where FCPA & anti-corruption fits
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