RCC Anti-Corruption and Anti-Bribery Compliance 1 — Questions and Answers
Question 1: Which U.S. federal law prohibits American companies and their agents from bribing foreign government officials to obtain or retain business?
- The Sherman Antitrust Act
- The Foreign Corrupt Practices Act (FCPA) (Correct answer)
- The Sarbanes-Oxley Act
- The Dodd-Frank Wall Street Reform Act
Correct answer: The Foreign Corrupt Practices Act (FCPA)
The Foreign Corrupt Practices Act (FCPA) of 1977 specifically prohibits U.S. persons and entities from bribing foreign government officials for business advantages.
Question 2: Under the FCPA, which of the following is NOT considered a 'foreign official'?
- An employee of a state-owned enterprise
- A foreign political party official
- A private sector executive with no government role (Correct answer)
- A candidate for foreign political office
Correct answer: A private sector executive with no government role
The FCPA's definition of 'foreign official' covers government employees, officials of state-owned enterprises, political party officials, and candidates for office, but does not include purely private-sector individuals.
Question 3: What are 'facilitating payments' (also called grease payments) under the FCPA?
- Large bribes paid to senior government ministers to win contracts
- Small payments to low-level officials to expedite routine, non-discretionary government actions (Correct answer)
- Commission payments made to third-party sales agents
- Charitable donations made to government-linked foundations
Correct answer: Small payments to low-level officials to expedite routine, non-discretionary government actions
Facilitating payments are small payments to minor officials to speed up routine government actions (e.g., processing permits), and the FCPA contains a narrow exception for them, though many other laws do not.
Question 4: The UK Bribery Act 2010 differs from the FCPA in which significant way?
- The UK Bribery Act applies only to British citizens, not foreign nationals
- The UK Bribery Act prohibits commercial bribery between private parties, in addition to bribery of public officials (Correct answer)
- The UK Bribery Act does not require companies to maintain books and records
- The UK Bribery Act has no provision for corporate criminal liability
Correct answer: The UK Bribery Act prohibits commercial bribery between private parties, in addition to bribery of public officials
Unlike the FCPA, the UK Bribery Act covers both public and private sector bribery, making it broader in scope and including a separate offense for failure of commercial organizations to prevent bribery.
Question 5: Which affirmative defense is explicitly available under the FCPA anti-bribery provisions?
- The payment was below a materiality threshold of $5,000
- The payment was a reasonable and bona fide business expenditure directly related to promoting products or services (Correct answer)
- The company self-reported the violation within 30 days of discovery
- The foreign official voluntarily solicited the payment
Correct answer: The payment was a reasonable and bona fide business expenditure directly related to promoting products or services
The FCPA provides an affirmative defense for reasonable and bona fide promotional expenditures, provided they are lawful under the written laws of the foreign country.
Question 6: In an anti-corruption compliance program, what is the primary purpose of conducting third-party due diligence?
- To satisfy annual reporting requirements to the SEC
- To assess the corruption risk posed by agents, distributors, and other intermediaries acting on the company's behalf (Correct answer)
- To identify competitors who may be engaging in bribery
- To verify that suppliers hold appropriate ISO quality certifications
Correct answer: To assess the corruption risk posed by agents, distributors, and other intermediaries acting on the company's behalf
Third-party due diligence is critical because the FCPA and similar laws hold companies liable for bribes paid through intermediaries who act on their behalf, making risk assessment of such parties essential.
Question 7: A company operating in a high-risk country discovers that its local sales agent has paid a bribe to a government official to win a contract. Under FCPA enforcement principles, which factor most significantly mitigates the company's exposure?
- The bribe amount was less than $50,000
- The company had a robust compliance program, promptly self-disclosed, and cooperated fully with authorities (Correct answer)
- The government official solicited the payment without company initiation
- The contract was ultimately unprofitable for the company
Correct answer: The company had a robust compliance program, promptly self-disclosed, and cooperated fully with authorities
DOJ and SEC guidance emphasize that a robust pre-existing compliance program, voluntary disclosure, and full cooperation are the most significant mitigating factors in FCPA enforcement decisions.
RCC Anti-Corruption and Anti-Bribery Compliance 1
Which U.S. federal law prohibits American companies and their agents from bribing foreign government officials to obtain or retain business?