Foreign Corrupt Practices Act of 1977 FCPA

The Foreign Corrupt Practices Act of 1977 is a law imposing criminal liability on corporate directors and officers for illegal payments made to foreign officials. For example, the minister of trade in Country A may demand an annual $50,000 payment from Corporation X in return for allowing the corporation to ship its products into Country A. Corporation X's payment of such monies would constitute a violation of FCPA and could subject Corporation X and its directors and officers to liability in the United States.

FCPA prosecutions increased markedly because the Sarbanes-Oxley Act (SOx) requires that senior executives scrutinize their company's internal controls, certify its financial statements, and report possible FCPA violations to the company's board of directors, its audit committee, or its chief legal officer.