Foreign Corrupt Practices Act (FCPA)
The Foreign Corrupt Practices Act (FCPA) of 1977 makes it a federal crime for U.S. companies, U.S. persons, and foreign companies listed on U.S. stock exchanges to pay bribes to foreign government officials to obtain or retain business. It was the world's first law targeting overseas corporate bribery — enacted after the SEC discovered that hundreds of U.S. companies had made hundreds of millions in questionable payments to foreign officials. The FCPA has two main provisions: the anti-bribery prohibition (no payments of anything of value to foreign officials to obtain business advantage) and the books and records requirement (public companies must maintain accurate records and adequate internal controls — a powerful tool because prosecutors can charge accounting violations even without proving the underlying bribe). Enforcement is split between DOJ (criminal — under the broader federal criminal law framework) and SEC (civil — under the securities regulation framework), and penalties can be enormous: Goldman Sachs paid $2.9 billion in 2020 for the 1MDB scandal; Ericsson paid $1.06 billion in 2019. The Trump administration signaled in 2025 that it would de-emphasize FCPA enforcement to reduce burdens on American companies competing internationally — a potential policy shift that could significantly change compliance incentives for multinationals.
Current Law (2026)
| Parameter | Value |
|---|---|
| Core statute | Foreign Corrupt Practices Act (1977, amended 1988, 1998), 15 U.S.C. §§ 78dd-1 to 78dd-3, 78m(b) |
| Enforcement agencies | DOJ (criminal anti-bribery); SEC (civil anti-bribery + books and records for issuers) |
| Covered persons | U.S. companies and persons, foreign companies listed on U.S. exchanges, and anyone who takes an act in furtherance of bribery while in U.S. territory |
| Prohibited | Paying or offering anything of value to foreign government officials to obtain or retain business |
| Criminal penalties (anti-bribery) | Individuals: up to $250,000 fine + 5 years imprisonment per violation (FCPA cap is $100,000 at 15 U.S.C. § 78dd-2(g)(2)(A) / 78dd-3(e)(2)(A), but the Alternative Fines Act, 18 U.S.C. § 3571(b)(3), raises the practical individual maximum to $250,000); Corporations: up to $2 million per violation under 15 U.S.C. § 78dd-2(g)(1)(A), or up to twice the gross pecuniary gain or loss under 18 U.S.C. § 3571(d) — the basis for most multi-hundred-million-dollar resolutions |
| Criminal penalties (books and records, 15 U.S.C. § 78ff) | Individuals: up to $5 million + 20 years; Corporations: up to $25 million per willful violation |
| Annual enforcement | ~15-30 corporate enforcement actions/year; total penalties routinely exceed $1 billion/year |
| Largest FCPA penalty | Ericsson: $1.06 billion (2019); Goldman Sachs: $2.9 billion (2020, combined) |
Legal Authority
- 15 U.S.C. § 78dd-1 — Anti-bribery provisions for issuers (SEC-registered companies may not use any means of interstate commerce to pay, offer, or authorize the payment of anything of value to a foreign official to obtain or retain business)
- 15 U.S.C. § 78dd-2 — Anti-bribery for domestic concerns (any U.S. person or company, whether publicly traded or not, is prohibited from corrupt payments to foreign officials)
- 15 U.S.C. § 78dd-3 — Anti-bribery for persons other than issuers/domestic concerns (foreign persons and companies that take any act in furtherance of a corrupt payment while in the territory of the United States)
- 15 U.S.C. § 78m(b)(2) — Books and records / internal controls (issuers must keep books, records, and accounts that accurately reflect transactions; maintain a system of internal accounting controls; "books and records" violations don't require proof of a bribe — inaccurate recording is itself a violation)
How It Works
The FCPA is the United States' primary anti-bribery statute — prohibiting American companies and individuals from bribing foreign government officials to win business. Since a major enforcement surge beginning in the mid-2000s, the FCPA has become one of the most consequential business regulatory statutes in the world, generating billions of dollars in penalties and reshaping how multinational corporations operate.
The FCPA's anti-bribery prohibition is direct: it is illegal to pay, offer, promise, or authorize the payment of anything of value to any foreign official — government employees, state-owned enterprise executives, political party officials, candidates for office — for the purpose of obtaining or retaining business or securing any improper advantage. "Anything of value" is interpreted broadly: cash, gifts, travel, entertainment, charitable donations, internships for officials' family members. The corrupt intent (a quid pro quo) must be present, but the business need not actually be obtained. The FCPA's jurisdictional reach is expansive: issuers — any company with securities listed on a U.S. exchange, including foreign companies via ADRs; domestic concerns — any U.S. person or company, regardless of where the conduct occurs; and any person — including foreign nationals and foreign companies — who takes any act in furtherance of a corrupt payment while in U.S. territory or using the U.S. banking system. Separately, the FCPA's books and records provisions require issuers to maintain accurate records and adequate internal accounting controls — catching conduct that might not be provable as bribery but involved disguising payments as "consulting fees" or "commissions," with violations carrying their own penalties without requiring proof of a corrupt payment.
The FCPA contains a narrow facilitating payments exception for small payments to low-level foreign officials to speed routine governmental actions — visa processing, utility connections, cargo loading — but most major companies have eliminated such payments entirely because the UK Bribery Act and other foreign anti-corruption laws offer no similar exception. FCPA enforcement has produced some of the largest corporate penalties in history: Goldman Sachs ($2.9 billion for the 1MDB scandal), Airbus ($3.9 billion in combined global settlements), Ericsson ($1.06 billion), and dozens of other multi-hundred-million-dollar cases. DOJ (criminal) and SEC (civil) coordinate enforcement, and companies that voluntarily self-disclose, fully cooperate, and remediate may receive penalty reductions of 50% or more under DOJ's Corporate Enforcement Policy. FCPA violations may also trigger parallel proceedings under OFAC sanctions when corrupt payments involve sanctioned countries or persons.
How It Affects You
If you work for a multinational company doing business in countries with corruption risk: FCPA's core rule: you cannot pay, offer, promise, or authorize paying anything of value to a foreign government official — including state-owned enterprise employees, customs officials, regulators, or political party representatives — to obtain or retain business or secure any improper advantage. "Anything of value" is expansive: cash, excessive gifts, lavish entertainment (sports events, resort trips), charitable donations at an official's direction, internships for officials' family members, and favorable loans all qualify. The corrupt intent (a quid pro quo) must be present — but actual success in winning the business is not required. Know your company's gift and entertainment policy: most FCPA-compliant programs allow gifts and entertainment below a per-person threshold (often $100-$250) but require pre-approval for interactions with foreign officials. Red flags to escalate immediately: an agent pressing for cash payments, official requests for "facilitation" payments beyond small routine amounts, or suggestions that a donation to a specific charity will help move a regulatory approval forward.
If you're a compliance officer, general counsel, or anti-corruption professional: DOJ's Corporate Enforcement Policy is the most important enforcement document governing your decisions about self-disclosure. Companies that voluntarily self-disclose, fully cooperate, and timely remediate FCPA violations are eligible for a declination (no charges) or a 50%+ penalty reduction below the otherwise applicable range. Companies that cooperate without voluntary disclosure still get a 25-30% reduction. This policy creates a direct financial incentive for robust internal investigations and prompt reporting — often triggered by tips from employees protected under whistleblower statutes. Third-party due diligence is the highest-risk area: agents, distributors, JV partners, and local representatives are the most common conduits for bribery — and a company is liable for third-party conduct it had reason to know about, including through willful blindness. A compliance program that looks good on paper but isn't genuinely implemented creates its own liability in enforcement: DOJ and SEC review whether due diligence was actually performed. The books and records provisions create a parallel obligation — disguising a payment as a "consulting fee" or "commission" is itself a violation even if bribery can't be proven, carrying its own penalties.
If you're a U.S. company entering a new market, acquiring a foreign business, or forming a joint venture: Pre-acquisition FCPA due diligence is essential — acquirers inherit FCPA liability for pre-acquisition conduct. Standard protocol: review the target's books and records for anomalous payments to agents or officials' family members, interview senior sales personnel, assess the existing compliance program, and include FCPA representations and warranties in the acquisition agreement. If pre-closing due diligence reveals red flags, you face a binary choice: walk away, or ensure post-closing remediation is aggressive enough to self-disclose to DOJ/SEC before they find the issue independently. Joint ventures require particular care: if your JV partner makes corrupt payments on behalf of the venture and you had reason to know, FCPA liability can reach you. JV agreements should include compliance representations, audit rights, and termination-for-cause provisions tied to FCPA violations. The books and records obligation also extends to consolidated JV accounting.
If you're an investor, analyst, or portfolio manager tracking companies with international operations: FCPA investigations are material events requiring SEC disclosure — watch for 10-K/10-Q language referencing DOJ or SEC investigations. Major resolutions illustrate the financial exposure: Goldman Sachs ($2.9 billion in 2020 for the 1MDB scandal), Airbus ($3.9 billion in combined global settlements), Ericsson ($1.06 billion in 2019). Beyond direct penalties, FCPA enforcement typically triggers stock price decline, executive departures, compliance monitor costs (2-3 years of independent monitoring), parallel foreign enforcement proceedings (UK SFO, French PNF, Brazilian MPF), and shareholder derivative suits. Individual prosecution is a real risk: DOJ's current policy explicitly targets executives who personally authorized or participated in corrupt payments — criminal conviction regardless of whether the corporation resolved its case. Companies under FCPA investigation while seeking government contracts also face potential suspension and debarment from federal contracting.
State Variations
The FCPA is exclusively federal. However, some states have their own anti-corruption statutes that may apply to domestic bribery or supplement federal law.
Implementing Regulations
The FCPA is enforced through DOJ criminal prosecution and SEC civil enforcement. DOJ and SEC published the joint "FCPA Resource Guide" as interpretive guidance. SEC anti-bribery and books-and-records provisions are covered under 17 CFR Part 240 (Securities Exchange Act rules).
28 CFR Part 80 — FCPA Opinion Procedure: the DOJ regulation establishing a process through which companies and individuals can obtain the Attorney General's opinion on whether prospective conduct would violate the FCPA's anti-bribery provisions:
- § 80.1 — Purpose: allows "issuers and domestic concerns" (FCPA-covered entities) to request DOJ's opinion on whether specific prospective, non-hypothetical conduct would violate DOJ's current FCPA enforcement policy; the procedure is for real planned transactions, not abstract legal questions — a company proposing to hire a foreign government official's relative as a consultant and pay them a specific amount can ask whether DOJ views that as an FCPA violation; the request must describe actual parties, contemplated actions, and specific facts
- § 80.10 — Rebuttable presumption: if DOJ issues an opinion stating that conduct conforms with current enforcement policy and the requester then engages in the described conduct, there is a rebuttable presumption in any subsequent FCPA prosecution that the conduct was not willful — providing a meaningful (though not absolute) safe harbor; the presumption can be rebutted by evidence that the requestor provided false or misleading facts in the opinion request
- § 80.11 — Scope limitations: an FCPA Opinion binds only DOJ — it does not affect SEC civil enforcement authority (FCPA has parallel anti-bribery and books-and-records provisions enforced by SEC); an opinion also doesn't affect the company's obligations under the accounting provisions; companies that receive favorable FCPA Opinions should be aware that SEC retains independent authority to bring civil charges even if DOJ declines
- § 80.13 — What opinions address: FCPA Opinions state only DOJ's position on its enforcement policy — not whether conduct is technically lawful under the statute; this is a meaningful distinction: DOJ may decline to prosecute conduct that still technically violates the FCPA's text if the facts are equivocal or the case is weak, and an Opinion reflects that prosecutorial judgment, not a legal ruling
In practice, FCPA Opinion Procedure requests are rare — DOJ has issued only approximately 100+ opinions in the program's existence, averaging a few per year. The process requires disclosure of sensitive business information to DOJ, takes 30 days, and is only available for prospective conduct. Companies with active deal-making in high-risk markets (particularly where state-owned enterprises are common counterparties) occasionally use the procedure for transactions where the FCPA analysis is genuinely uncertain. The June 2025 DOJ enforcement guidelines (post-EO 14209 pause) reset enforcement priorities toward cartel/TCO-linked corruption and individual liability, but the opinion procedure framework remains in place.
Pending Legislation
- S 4029 — Set 10-year statute of limitations for Securities Act and FCPA bribery offenses. Status: Introduced.
Recent Developments
- Trump DOJ paused, then resumed FCPA enforcement under new guidelines: President Trump's Executive Order 14209 (February 10, 2025), "Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security," directed DOJ to halt new FCPA investigations pending a review of the FCPA's impact on U.S. business competitiveness. After a four-month pause, Deputy Attorney General Todd Blanche lifted the moratorium on June 9, 2025 with new "Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act," reorienting enforcement to (a) limit burdens on U.S. companies operating abroad and (b) target conduct that directly undermines U.S. national interests — with primary focus on corruption tied to cartels, transnational criminal organizations, money laundering through shell companies, and corruption in defense, intelligence, or critical infrastructure sectors. The guidelines also direct prosecutors to focus on individual liability rather than attribute nonspecific misconduct to corporate structures. Foreign partners (UK SFO, French PNF, Brazilian MPF) have continued their own enforcement, but the U.S. enforcement footprint is narrower than during 2015-2024.
- FCPA's largest resolutions involved defense contractors and oil companies: The years 2022-2024 saw several major FCPA resolutions before the Trump pause, including: ABB Ltd. ($315M, bribery of South African power utility officials); Glencore ($180M, bribery across multiple African countries for mining concessions); and Ericsson's additional guilty plea and $206M criminal penalty (follow-on to its 2019 $1B+ resolution). These cases demonstrate the FCPA's reach into global commodities and infrastructure sectors where state-owned enterprise officials are common counterparties. The largest FCPA resolution on record remains Goldman Sachs's 1MDB-related settlement ($2.9B in 2020).
- FCPA individual prosecutions — executives facing personal criminal liability: DOJ's increased focus on individual accountability in corporate crime (articulated in the Monaco Memo and its successors) produced a wave of FCPA executive prosecutions in 2022-2024. Executives at biotechnology companies (paying physicians in foreign countries), oil services companies, and technology companies faced personal FCPA charges. Convictions and guilty pleas by executives at middle and senior levels — not just low-level employees — have changed the risk calculus for compliance programs. The Trump administration's FCPA pause may reduce individual prosecution activity; DOJ has not publicly addressed how the review affects pending individual cases.
- Non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs) — corporate monitor reforms: The Biden DOJ's revised corporate enforcement policies (Monaco Memo, 2022) modified how DOJ selects and compensates corporate compliance monitors attached to FCPA deferred prosecution agreements. Monitors — outside compliance experts who oversee corporate remediation — had been criticized for excessive fees and scope. The revised policy requires monitors to be selected through a competitive process, caps monitor terms, and links monitor scope to specific identified failures. Trump DOJ has not reversed the monitor reforms but the broader FCPA pause creates uncertainty about how actively new DPAs with monitor requirements will be pursued.