The Foreign Corrupt Practices Act (FCPA) prohibits U.S. corporations from doing what?

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. corporations from doing what?

• A. Prohibits private citizens from investing in foreign markets.
• B. Prohibits U.S. corporations from making illegal payments to foreign public officials to obtain business rights or to enhance their business dealings in those countries.
• C. Requires disclosure of all international transactions to the U.S. government.
• D. Prohibits international trade altogether.

Answer: (B)

The FCPA is about stopping bribery of foreign public officials to win or keep business. It prohibits U.S. corporations from offering, paying, promising to pay, or authorizing payments to foreign officials to obtain business rights or to improve their business position in another country. That focus on preventing corruption in international markets is what the option describes. In addition, the FCPA includes accounting and internal-control requirements to ensure accurate books and records, helping to detect and prevent such bribery. The other statements aren’t what the law targets: it doesn’t ban private citizens’ investments in foreign markets, it doesn’t require disclosure of all international transactions, and it doesn’t prohibit international trade altogether.

The FCPA is about stopping bribery of foreign public officials to win or keep business. It prohibits U.S. corporations from offering, paying, promising to pay, or authorizing payments to foreign officials to obtain business rights or to improve their business position in another country. That focus on preventing corruption in international markets is what the option describes. In addition, the FCPA includes accounting and internal-control requirements to ensure accurate books and records, helping to detect and prevent such bribery. The other statements aren’t what the law targets: it doesn’t ban private citizens’ investments in foreign markets, it doesn’t require disclosure of all international transactions, and it doesn’t prohibit international trade altogether.