What is the Foreign Corrupt Practices Act (FCPA)?
The Foreign Corrupt Practices Act is a U.S. law that was enacted in 1977 to prevent United States businesses to bribe foreign officials to gain business advantages. This is ensures that U.S. businesses cannot offer, pay, or promise to pay money or anything of value to foreign government officials (this includes political parties or candidates) for the purpose of influencing decisions to assist the business financially.
What does FCPA have to do with Federal Contracting?
The Foreign Corrupt Practices Act (FCPA) directly impacts federal contracting by prohibiting U.S. companies, including federal contractors, from bribing foreign officials to secure an business competitive advantages. International contractors must make sure that they are in compliance with the FCPA in order to avoid criminal and civil penalties that could end in the debarment from federal contracts. The government often requires contractors to develop anti-corruption compliance programs and perform due diligence on foreign partners to avoid violations.
FCPA and Federal Contracting: Staying Compliant
The Foreign Corrupt Practices Act (FCPA) plays a very important role in making sure that businesses that are involved in federal contracting are running their operations in a honorable and open manner especially when dealing with foreign officials. It is therefore important for contractors and vendors who are working with the U.S. government to have strict compliance measures in order to avoid violations that may have severe legal and financial consequences.
Key Compliance Strategies for Contractors and Vendors
Implement a Strong Compliance Program Establish
- Promote clear company policies and procedures that are in conformity with the FCPA.
- Ensure that compliance programs are checked regularly to reflect changes in laws and practices.
Conduct Due Diligence on Third Parties Check
- Ensure that subcontractors, vendors, and consultants also adhere and review that they are and remain compliant with FCPA.
- Make sure any and all agreements are in writing and include anti-corruption clauses.
Provide Employee Training
- Provide frequent training on FCPA compliance and ethical standards.
- Ensure your employees know the consequences of bribery and improper payments with federal contracting.
Monitor and Report Transactions
- Preserve the records and documentation of all the payments made, putting in place internal measures to prevent and detect all forms of suspicious activities.
Avoid Improper Payments and Gifts
- It is prohibited to offer or give a bribe, a kickback or a facilitation payment.
- To avoid such things, define strict policies for the provision or receipt of gifts, entertainment or hospitality.
Self-Reporting and Cooperation
- Allow for anonymous reporting of concerns by the employees. If you have any violations, you should investigate and prosecute and if there is anything to be raised to the authorities, raise it.
If the above compliance strategies are put into practice federal contractors and vendors will be well positioned to avoid legal pitfalls, act with ethical integrity and thus remain qualified to receive government contracts.
You want to guarantee that your business remains in FCPA compliance so you do not lose out on any federal contracting. If compliance is not met, the company will be barred from receiving and participating in future federal contracting, losing any access to current federal contracts.
