Bribery is sometimes justified on the ground that it greases the wheels of excessive government regulations, and it is tolerated as a practical business necessity which everybody does it. But bribing public officials has been generally recognized as a moral outrage throughout the world history. And, apart from moral aspects, bribery harms the level playing fields in the overseas market by excluding bona fide competitors.
As a result, consumer’s welfare is to be decreased while briber can get unfair benefit. In addition, bribery leads often to the misallocation of government funds by overinvestment of large-scale projects.
For these reasons, U.S. enacted Foreign Corrupt Practice Act in 1977(amended in 1988 and 1998) to cope with bribing foreign public officials by U.S. companies and to restore public confidence in the integrity of the American business system damaged in 1970s. And also, U.S. government asked OECD member countries to enact legislation similar to FCPA, and took initiatives to sign the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and U.N. Convention.
Furthermore, U.S. has made much efforts to link bribery to international trade in WTO negotiation as one of new trade issues.
This article presents the substance of anti-bribery provisions of FCPA(except accounting provisions), enforcement, penalties, and U.S. corporate compliance programs to find how strongly the U.S. government regulate and enforce it in order to cope with bribing foreign public officials by U.S. companies and how U.S. companies create and implement compliance programs to prevent their penalties in the course of doing overseas business. It is worthy to study FCPA because we can follow the example of it when Korean government enact the similar legislation in future. Moreover, Korean public officials and intermediaries also can be involved in FCPA in case they receive bribery from U.S. Companies.
As a result of this study, we can find FCPA regulation is very strictly and strongly being enforced, and penalties are much heavy if U.S. companies violate it’s provisions. And also, it is found that U.S. companies should implement positively the compliance programs suggested DOJ, conducting due diligence and checking everyday “red flags” in relations to intermediaries of overseas business and mergers and acquitions etc.