Assignment Content

Review the scenario and complete the activity below. This scenario can also be found in the “Questions & Problems” section of Ch. 6, “International and Comparative Law” in Dynamic Business Law.

In an interview published by The New York Times in February 1976, former Lockheed President A. Carl Kotchian defended the payment of bribes by the company as follows:

“Some call it gratuities. Some call them questionable payments. Some call it extortion. Some call it grease. Some call it bribery. I look at these payments as necessary to sell a product. I never felt I was doing anything wrong.”

More than 30 years later, Reinhard Siekaczek, an accountant employed by Siemens who oversaw an annual budget for questionable payments in excess of $50 million, stated:

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“I never thought I would go to jail for my company. …We thought we had to do it. Otherwise, we would ruin the company. …People will only say about Siemens that they were unlucky and that they broke the Eleventh Commandment. The Eleventh Commandment is, ‘Don’t get caught.’”

You have been hired to assist ABC Multinational Company to help educate employees on ethical practices and corporate culture. More specifically, related to the Foreign Corrupt Practices Act, your role is to prevent situations described in the above scenario.

Create either a handout, job-aid, poster, or flier to educate employees on the Foreign Corrupt Practice Act. Complete the following for your educational tool:

  • Explain what the employees should know regarding the Foreign Corrupt Practices Act.
    • Provide examples of Foreign Corrupt Practices Act violations.
    • Identify company actions or red flags that might indicate violations of the Act.
    • List any consequences of the violations.
    • Recommend actions to report possible violations.
    • Describe protections for whistleblowers. Why are they important? How do the protections impact the Act?

Cite references to support your assignment.

Format your citations according to APA guidelines.

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Foreign Corrupt Practices Act

  1. Explain what the employees should know regarding the Foreign Corrupt Practices Act.

·         The Foreign corrupt practices Act of 1977 was passed to prevent certain people and publicly traded companies and their personnel from paying foreign government officials to succor in gain or retaining business. The Act consists of anti-bribery provisions that forbid the purposive use of mails or any other means that lead to commerce corruption. The provision prevents authorization of payments, promises to pay, and offers with a foreign official. In simpler terms, the Foreign Corrupt Practices Act forbids the payment of bribes to foreign officials. Employees must follow all anti-bribery and anti-corruption laws.

Provide examples of Foreign Corrupt Practices Act violations

  • Bribing government officials to obtain business get assistance for its continuance.
  • Bribing to get a physician endorsement
  • Enticing for project approval.
  • Bribing politicians to gain business mileage or endorsement
  • Ignoring booking keeping and recording transactions.
  • Skewed account records that do not reflect the disposition of assets and accurate transactions.
  • Overlooking the revelation of illegal transactions.
  • Embezzlement of funds and assets.
  • Failure to accrual political contributions.
  • Breaking other laws touching on firearm possession, drug, and substance use.
  • Tax flouting.

Identify company actions or red flags that might indicate violations of the Act.

  • When an organization deliberately mistake financial statement aiming to portray an impression that it is making profits.
  • Hiding payoffs given to government officials.
  • Charging strange fees and giving strange retainers or commissions.
  • Intentionally hiking unverified expenses to balance income tax liabilities.
  • Failure to make Foreign Corrupt Practices Act associated representations.
  • Questionable methods of payments.
  • Information portraying dubious reputation held by a business partner.
  • Violating local laws.
  • Government official hand in supporting the business.
  • Government official direct relationship with the business, family, or shareholders. 
  • Payment of contingent fees.
  • Underprivileged business partner who guarantees that the desired results will be achieved no matter the situation.
  • Direct involvement in political contributions.

List any consequences of the violations.

  • Businesses that commit bribery violations are subject to pay $2,000,000 per violation.
  • Individuals who commit bribery violations are subject to pay $250,000 per violation, plus five years of incarceration.
  • A civil penalty is different from a criminal penalty. Entities and individuals ought to pay 16 000 dollars per violation.
  • Businesses that commit accounting violations are subject to pay $25,000,000 per violation.
  • Individuals that commit accounting violations should pay $5,000,000 per violation plus up to 20 years jail term.
  • Enterprises should pay $750,000 per violation for a civil penalty if it is an accounting violation.
  • Individuals should pay $150,000 per violation for a civil penalty if it is an accounting violation.

Recommend actions to report possible violations.

  • Formulate a compliance program’s directory to track, document, and inhibit actions that cause violation of the Act.
  • Hire external auditors that will not hesitate to report pervasive financial statements to integrity authorities. 

Describe protections for whistleblowers. Why are they important? How do the protections impact the Act?

           Whistleblowers are protected from harm once they disclose rot in an organization. Without protection, their life could be in danger due to threats and revenge. Violators of the Foreign Corrupt Practices Act are held in custody to prevent harming whistleblowers. Once proven guilty, they are heavily punished so that they can desist from confronting whistle blowers. Squealers disclose a violation of laws, policies, misappropriation of funds, abuse of power, and gross management. 

References

De la Torre, M. J. (2016). The foreign corrupt practices act: imposing an American definition of corruption on global markets. Cornell Int’l LJ49, 469.

Pearce, D., & Pelka-Caven, H. (2019). Corporate law: New protections for corporate whistleblowers. LSJ: Law Society of NSW Journal, (61), 71.