The "Foreign Corrupt Practices Act" Seizes the Spotlight

In the fervor of conducting trade globally, U.S. companies may inadvertently expose themselves to risk by having inadequate policies, procedures, and monitoring controls to prevent and detect corrupt payments to foreign officials. Highly regarded companies such as Alcatel-Lucent and Chevron have paid dearly for such violations of the Foreign Corrupt Practices Act of 1977 (FCPA). Authors Jennifer Johnston and Jeffrey Garfield provide a brief overview of the act and discuss recent trends in its enforcement.

FCPA enforcement began heating up in 2004, and many companies have spent millions of dollars responding to regulatory inquiries. Inquiries generally involve extensive internal investigations that can result in large fines and requirements to perform ongoing compliance monitoring for an extended period. The financial costs and negative impact on reputation are severe, particularly for companies that don't selfreport violations or are repeat offenders. Executives and