You may have seen some headlines about this wild artificial intelligence chatbot, ChatGPT. We asked it some questions about FCPA compliance to see if it’s worth the hype. You might want to be seated for this.
ChatGPT was developed by OpenAI, a company founded and funded in part by Elon Musk. Earlier this year, we reviewed a predecessor to ChatGPT called GPT-3.
The main difference between the two is that ChatGPT is designed for conversations. You can ask it questions using natural language and syntax.
Here’s a video of our interaction with ChatGPT in real-time. The full text of the exchange is below. Hit the full screen button for easier viewing.
Human: What is the FCPA, and what types of businesses and individuals does it apply to?
AI: The FCPA, or the Foreign Corrupt Practices Act, is a US federal law that prohibits companies and individuals from offering or providing bribes to foreign officials in order to obtain or retain business. The FCPA applies to all US companies and individuals, as well as foreign companies and individuals who are listed on a US stock exchange. It also applies to foreign companies and individuals who conduct business in the US, regardless of whether they are listed on a US stock exchange. In short, the FCPA has a wide scope and applies to many different businesses and individuals.
Human: What are the main provisions of the FCPA, and how does it prohibit corrupt payments to foreign officials?
AI: The FCPA contains two main provisions that prohibit corrupt payments to foreign officials. The first provision prohibits companies and individuals from making payments to foreign officials in order to obtain or retain business. This means that companies and individuals cannot offer bribes to foreign officials in order to secure an unfair advantage in the market.
The second provision prohibits companies from keeping inaccurate books and records, and from failing to implement adequate internal accounting controls. This provision is intended to prevent companies from disguising corrupt payments as legitimate business expenses in their financial records.
Overall, the FCPA is designed to promote transparency and accountability in business dealings with foreign governments, and to prevent companies and individuals from gaining an unfair advantage through corrupt practices. It is enforced by the US Department of Justice and the Securities and Exchange Commission.
Human: What are the potential consequences of non-compliance with the FCPA, and how can companies and individuals avoid violating the law?
AI: Violating the FCPA can result in significant penalties for companies and individuals, including fines, criminal charges, and damage to reputation. In order to avoid violating the FCPA, companies and individuals should make sure to thoroughly research the laws and regulations in the countries where they do business, and to implement robust internal accounting controls and compliance programs.
It is also important for companies and individuals to carefully monitor their business relationships and transactions, and to avoid engaging in any activities that could be perceived as corrupt or unethical. This may include avoiding business partnerships with individuals or companies who have a history of engaging in corrupt practices, and implementing policies and procedures to ensure that all business transactions are conducted in a transparent and above-board manner.
In general, the best way to avoid violating the FCPA is to be proactive in implementing strong compliance measures and to ensure that all business dealings are conducted in a legal and ethical manner.
That’s incredible. Those are in-depth questions about an extremely complex topic.
But I have a confession to make. I cheated a little. The human isn’t a human at all.
The conversation above was my second exchange with ChatGPT.
My first exchange was to ask, “What are three good questions to ask about FCPA compliance?”
AI: What is the FCPA, and what does it cover? What are the penalties for violating the FCPA? How do companies and individuals comply with the FCPA?
OpenAI’s GPT project has made enormous progress in the eight months since we last tested it. It also seems to be growing more confident.
Human: What’s a good headline on the FCPA Blog for a post about the power of artificial intelligence?
AI: “Revolutionizing Compliance: The Power of Artificial Intelligence in the Fight Against Corruption”
It’s not wrong. AI will revolutionize compliance, and it will be a powerful force in the fight against corruption. But AI also has massive limitations and shortcomings that make confidence in it a precarious thing.
That opens up a mega-can of worms that we’ll be exploring more.