FCPA at a Glance

FCPA: what does it really mean?

The Foreign Corrupt Practices Act (FCPA) aims to end corrupt practices in dealings with foreign businesses, and to create a level playing field for all businesses. 

The provisions in the FCPA cover two main areas:

- anti-bribery

- prevention of fraudulent practices in accounting

Violations of the FCPA fall into five categories, which are explained briefly in the image below. 

The context

Under the FCPA, a corrupt payment is defined as any payment designed to induce the recipient to misuse their official position by making a business decision favorable to the individual or company making the payment. 

In other words, the gift, offer, or promise is meant to influence the decision in question improperly. 


A company gives an expensive travel package as a gift to a foreign official, who is in charge of deciding on a certain business contract. In gifting the official, the company has tried to convince the official to improperly direct business to it.

Anti-bribery provisions

The anti-bribery provisions of the FCPA prohibit the following individuals and companies from making corrupt payments to foreign officials for the purpose of securing or retaining business:

  • US persons and businesses (domestic concerns)
  • US and foreign public companies listed on US stock exchanges
  • any firm that required to file periodic reports with the Securities and Exchange Commission 
  • other foreign persons and organisations conducting business within the territory of the US

Accounting provisions

The accounting provisions require accountants to:

- make and keep accurate books and records 

- devise and maintain an adequate system of internal accounting controls

They also prohibit individuals and businesses from falsifying books and records, or knowingly circumventing or failing to implement a system of internal controls.

Test your understanding

Let's test your understanding so far. Take a look at this short video.

Based on the video, do you think EuroCo is subject to the FCPA’s territorial-jurisdiction provisions, in view of its conduct while in the United States?

  • Yes
  • No