- Teaching Notes
Bribery persists as a global problem, and there are still places in the world where corruption is the norm rather than the exception. U.S. multinational companies operating overseas are confronted with the decision to bribe or not to bribe. The U.S. government has deemed it illegal to bribe foreign officials regardless of where the company operates. The Foreign Corrupt Practices Act (FCPA) is a U.S. law prohibiting U.S. companies and their subsidiaries from paying bribes to foreign officials, consultants, or political parties to obtain or retain business. The FCPA’s reach includes non-U.S. companies as well if they have ties with the United States. In recent years, the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) have enforced the FCPA aggressively, imposing billions of dollars in corporate fines and penalties. 2018 witnessed the largest monetary settlement in FCPA history (USD 1.8 billion) against the Brazilian energy company Petrobras. In 2019, there were four enforcement actions in the highest penalty category: Ericsson at USD 1 billion; Mobile TeleSystems at USD 850 million; Walmart at USD 282 million, and Fresenius Medical at USD 232 million. Three of these four companies are non-U.S.-based, highlighting the global reach and power of the FCPA. Should the U.S. government punish foreign companies for acts of corruption?