Anti-Corruption and Anti-Bribery Compliance Flashcards

Under the Foreign Corrupt Practices Act (FCPA), which of the following payments to a foreign government official would most likely constitute a violation?

Answer: A $10,000 payment to an official to secure a government contract for the company

The FCPA prohibits payments to foreign government officials to obtain or retain business. A payment specifically to secure a contract is a classic FCPA violation. Modest promotional gifts, reasonable business meals, and bona fide charitable donations with no quid pro quo may fall outside the FCPA's scope, though all require careful scrutiny.

A key distinction between the FCPA and the UK Bribery Act is that the UK Bribery Act:

Answer: Also prohibits commercial bribery between private parties and creates a strict liability offense for failing to prevent bribery

The UK Bribery Act is broader than the FCPA in two important ways: it covers commercial bribery (bribes between private entities), not just government officials, and it creates a corporate offense of failing to prevent bribery — a strict liability offense unless the company had 'adequate procedures' to prevent it. The FCPA does not cover private-to-private commercial bribery.

An effective anti-corruption compliance program requires third-party due diligence primarily because:

Answer: Companies can be held liable under the FCPA for bribes paid by third-party agents acting on their behalf

The FCPA's anti-bribery provisions extend to third parties acting on a company's behalf — agents, consultants, distributors, and joint venture partners. The DOJ and SEC have prosecuted companies for 'red flag' payments made through third parties. Adequate due diligence on third parties is therefore a core element of anti-corruption programs.

Which of the following best describes 'facilitation payments' under the FCPA?

Answer: Payments to expedite routine, non-discretionary government actions (e.g., processing a permit already approved), which are expressly excluded from the FCPA's anti-bribery provisions

The FCPA contains a narrow exception for 'facilitating or expediting payments' made to expedite routine, non-discretionary governmental actions (such as customs clearance or utility connections). However, the UK Bribery Act does not recognize this exception, and the DOJ/SEC have narrowed its practical scope over time. It is not a license to pay bribes.

An employee submits an expense report showing a $3,000 dinner with a foreign official. Under an anti-corruption policy, the compliance manager should primarily evaluate whether:

Answer: The expense was pre-approved, documented with a business purpose, and proportionate to a legitimate business interaction

Anti-corruption controls for gifts and entertainment require pre-approval, clear documentation of a legitimate business purpose, and proportionality. A $3,000 dinner without prior approval or documented purpose is a red flag regardless of the country's CPI score. Policies typically set per-person or per-event limits and require manager or compliance sign-off.

ISO 37001 is an internationally recognized standard that specifically addresses:

Answer: Anti-bribery management systems, providing a framework organizations can implement and certify against

ISO 37001 is the international standard for anti-bribery management systems. It specifies requirements and provides guidance for establishing, implementing, and maintaining an anti-bribery program, and organizations can seek third-party certification to demonstrate their commitment to anti-corruption compliance.