Its full name is actually the Foreign Corrupt Practices Act of 1977 (FCPA) and it was designed to make it illegal for companies to influence foreign officials with personal payments.
The bribing of foreign officials by American companies was so problematic – a US Securities and Exchange Commission (SEC) investigation in the mid 1970s revealed that more than 400 companies admitted to the practice – that compliance is overseen by both the SEC and the Justice Department.
Lawmakers were agitating for such a law for decades, but several high-profile scandals in the 1970s brought the issue into the collective conscious.
The most famous of such scandals was nicknamed “Bananagate” in which Chiquita Brands bribed the President of Honduras to lower taxes, thereby making the company’s bananas cheaper to export from the country, thereby destroying the competing local UPEB cartel. After the $2.5 million in bribes was discovered the president of United Brands (which owned Chiquita) jumped to his death, the government of Honduras was overthrown, the cartel lost its livelihood, and of course the people of Honduras dealt with terrible turmoil foisted on them by forces outside their control. Not good.
FCPA compliance is big, serious business; just ask Siemens. Violations don’t just yield massive fines, they also could mean criminal indictments against those involved. To that end, companies are quite vigilant about monitoring potential risks and risk-takers. New laws and technology are constantly introduced, and compliance professionals are perennially tasked with staying up to speed.
The challenge of course is that there is no single database of people who might bribe foreign officials. Life is fluid; employees and circumstances change, and compliance is often a step behind.
AppZen is the world’s leading automated solution for FCPA compliance. We can make this claim because even though, as mentioned above, there is no centralized list of people who might bribe foreign officials, different companies and governments do compile databases of what are called Politically Exposed Persons (PEPs).
These PEPs are people in rank and role at high risk of getting bribed for their influence (or doing the bribing themselves); they are often executives working across national borders, but there is some variance in profile.
AppZen is able to cross reference suspicious expense reporting with PEP lists compiled around the world, in seconds. Instead of a human auditor spending hours digging into one PEP list, AppZen’s AI scans dozens of lists in seconds.
The platform flags potential FCPA violations in the following areas: gifts, direct payments, food/meals, grants, entertainment, investment interests, education, honoraria services, travel, charity contributions, consulting fees, royalties, outside consulting, and research.
Want to up-level your company’s FCPA compliance? Get a demo today.