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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

In Search Of The Level Playing Field

The Foreign Corrupt Practices Act was last amended ten years ago. The “International Anti-Bribery and Fair Competition Act of 1998” was intended to make the FCPA consistent with the OECD Convention — formally titled the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

The OECD Convention itself resulted from a 10-year initiative by the United States. In 1988, Congress told the White House to help U.S. companies compete by encouraging trading partners to pass laws similar to the FCPA. The OECD members — consisting then of 33 countries with the most significant economies — signed the Convention in Paris in December 1997. It went to the U.S. Senate six months later.

The 1998 Amendments implemented the OECD Convention and made five conforming changes to the FCPA:

First, payments made to secure “any improper advantage” — language used in the OECD Convention — were added to the FCPA’s prohibitions.

Second, the FCPA’s coverage was extended to include all foreign persons who commit an act in furtherance of a foreign bribe while in the United States.

Third, the FCPA’s definition of foreign officials was expanded to include employees and representatives of public international organizations.

Fourth, jurisdiction was extended over the acts of U.S. businesses and nationals involved in illegal payments that take place wholly outside the United States.

And fifth, the distinction was eliminated between U.S. nationals and non-U.S. nationals, making all employees or agents of U.S. businesses subject to both civil and criminal penalties under the FCPA.

When President Clinton signed the 1998 Amendments (S. 2375) into law, his message about the search for the elusive level playing field was clear:

. . . Since the enactment in 1977 of the Foreign Corrupt Practices Act, U.S. businesses have faced criminal penalties if they engaged in business-related bribery of foreign public officials. Foreign competitors, however, did not have similar restrictions and could engage in this corrupt activity without fear of penalty. . . . As a result, U.S. companies have had to compete on an uneven playing field, resulting in losses of international contracts estimated at $30 billion per year.

The OECD Convention – – which represents the culmination of many years of sustained diplomatic effort – – is designed to change all that. Under the Convention, our major competitors will be obligated to criminalize the bribery of foreign public officials in international business transactions. . . . The United States intends to work diligently, through the monitoring-process to be established under the OECD, to ensure that the Convention is widely ratified and fully implemented. We will continue our leadership in the international fight against corruption. . . .

Ten years later, how well are the 1998 Amendments working? Non-U.S. companies and individuals are being prosecuted under the FCPA. And despite some disappointments, there are encouraging signs from Europe and Asia, where countries are prosecuting their companies and citizens for overseas public bribery. The level playing field is still a work in progress, but at least there’s progress to measure.

View the DOJ’s 1998 Amendments site here.


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1 Comment

  1. Thank you for the information on the 1998 amendments. I am also trying to understand how the FCPA amended the 34 Act, specifically, in respect to the filing of a Form 10K.

    As far as I understand, Form 10Ks are required pursuant to sections 13 or 15(d) of the 34 Act. The language of Section 13 requiring annual reports can be found in the FCPA § 78m.

    (a) Reports by issuer of security; contents

    Every issuer of a security registered pursuant to section 78l of this title shall file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security–

    (1) such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an application or registration statement filed pursuant to section 78l of this title . . .

    (2) such annual reports (and such copies thereof) . . . as the Commission may prescribe.

    Does thes mean that annual reports were not required prior to the FCPA?

    Or if they were, how did the FCPA amend the information that was required by the reports?

    Thanks always for your assistance.


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