Glossary
FCPA
The US Foreign Corrupt Practices Act of 1977 has two prongs: anti-bribery (it is unlawful to pay foreign officials to obtain or retain business) and accounting (issuers must keep accurate books and maintain internal accounting controls). Enforced by the DOJ and SEC, with settlements running from tens of millions to billions. EU multinationals with US listings comply.
Full definition
The Foreign Corrupt Practices Act of 1977, codified at 15 U.S.C. §§ 78dd-1 et seq., has two prongs: anti-bribery (it is unlawful for a US issuer, domestic concern, or any person acting within US territory to make payments to foreign officials to obtain or retain business) and accounting (issuers must keep accurate books and records and maintain a system of internal accounting controls). It is enforced by the US Department of Justice and Securities and Exchange Commission. Settlements typically run from tens of millions to billions: Goldman Sachs paid $2.9 billion in 2020 over the 1MDB matter; Ericsson paid $1 billion in 2019. The FCPA's reach is extraterritorial: non-US companies whose securities trade on US exchanges (issuers) or who act in furtherance of a corrupt payment while in US territory are covered. An effective whistleblower channel is a settled mitigating factor under the DOJ's Corporate Enforcement Policy, and the SEC operates a whistleblower programme that has paid over $1.9 billion in awards since 2011. EU multinationals with US listings or US business activity treat the FCPA as one of their primary compliance reference points.
Related terms
- UK Bribery Act 2010 The UK's extraterritorial anti-bribery statute, with a strict-liability corporate offence for failure to prevent bribery (section 7). The offence applies to commercial organisations carrying on business in the UK regardless of where bribery takes place. The only defence is adequate procedures. A functioning whistleblower channel is treated as a strong indicator of adequate procedures.
- Anti-Bribery (ABC) The body of law, controls, and culture aimed at preventing the offering or accepting of bribes in commercial activity. A mature ABC programme combines statutory prohibitions (FCPA, UK Bribery Act), the ISO 37001 management standard, and internal controls including third-party due diligence and a whistleblower channel routing ABC concerns to a dedicated owner.
- SOX The US Sarbanes-Oxley Act of 2002, including its whistleblower-protection provisions. Section 301 requires audit committees of public companies to establish procedures for receiving anonymous complaints on accounting or auditing matters. Section 806 protects whistleblowers from retaliation. EU subsidiaries of SOX-covered US issuers must operate a SOX-compliant channel alongside EU Directive 2019/1937 compliance.