International Law

• Paying a bribe by disguising it as a consulting fee is an exemption to the FCPA. T/F

  False. [Note: Just “calling something by a different name” is one way we try to avoid facing ethical dilemmas and it does not work ethically or legally, especially in this context.]
• The FCPA prohibits facilitation payments. T/F

  False. [Note: Facilitation payments are also called “grease payments”. They do not involve any influence of a foreign public official’s judgement. These are exceptions to the rule.]
• Payments to officials to influence their independent judgment are illegal under the FCPA. T/F

  True. [Note: These are bribes. Any payments (direct or indirect) or gifts to officials to attempt to influence their judgment is illegal, whether made by the US company or by a third party on behalf of the US company]
• Penalties for violations of the FCPA are up to twice the benefit obtained by the bribe. T/F

  True. [Note: See the Alternative Fines Act. US prosecutors are extremely proactive in enforcing these cases—so US companies have to pay particular attention to these violations.]
• The FCPA allows payments by US companies to foreign public officials that are made for “routine” government activities, such as processing paperwork. T/F

  True. [Note: These are narrow exceptions to the rule, IF it would “have to be done anyways” and you are “just trying to get it expedited” and it is legal in the other country. BEWARE It is such a narrow exception that most US companies have an internal policy against it, because it is a dangerous slippery path to go down. So even though it is an exception to the FCPA, most US companies are against it.]
• U.S. companies frequently hire foreign agents rather than employees to provide a shield against any “excessive payments”, because they are not criminally liable.

  False. [Note: US companies must be able to establish that they have performed “due diligence” in investigating those hired as agents. Excessive payments should be red flags for any U.S. company.]
• You meet with a foreign public official to persuade him to give you a license to open a casino to your large resort property by giving him a $10,000 “gift”. This license is worth $5,000,000 in the community. You also give him a $500 payment to speed up trash removal service for your establishment.

  1. $ 10,000,000
  2. $ 5,000,000
  3. $ 10,000
  4. $ 20,000

  What is your maximum penalty, if any?

  1

  [Note: The maximum penalty is twice the benefit of the bribe. Source: Spring 2015 Quiz in Class.]
• The OECD Convention on the Combating Bribery of Foreign Public Officials in International Business Transactions resulted in a form of the FCPA to be enacted in all of the member nations. T/F

  True. [In theory, there will be an even playing field in foreign

  markets among the nations that signed onto the convention.]
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  The US government will “take it easier” on companies that come forward and disclose their own FCPA violations. T/F

  True. [Note: The US Department of Justice prefers US companies to come forward. Unfortunately, most companies do not voluntarily disclose corruption. Most FCPA violation cases come from news stories, whistleblowers, calls from foreign governments, and the US government’s own proactive investigations.]