Foreign Corrupt Practices Act Law & Legal Definition

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping business. The FCPA makes it illegal for any U.S. citizen or firm (or any person acting on behalf of a U.S. citizen or firm) to use a means of U.S. interstate commerce (examples: mail, telephone, telegram, or electronic mail) to offer, pay, transfer, promise to pay or transfer, or authorize a payment, transfer, or promise of money or anything of value to any foreign appointed or elected official, foreign political party, or candidate for a foreign political office for a corrupt purpose, such as influencing a discretionary act or decision of the official for the purpose of obtaining or retaining business.

It is also unlawful for a U.S. business owner to make such an offer, promise, payment, or transfer to any person if the U.S. business owner knows, or has reason to know, that the person will give, offer, or promise directly or indirectly all or part of the payment to a foreign government official, political party, or candidate. For purposes of the FCPA, the term "knowledge" means both "actual knowledge"-the business owner in fact knew that the offer, payment, or transfer was included in the transaction-and "implied knowledge"-the business owner should have known from the facts and circumstances of a transaction that the agent paid a bribe, but failed to use ordinary care in investigating the transaction.