In an attempt to lead by example in anti-corruption internationally and safeguard the integrity of its capital markets, the U.S government has laws against firms and individuals who bribe foreign individuals and government officials for purposes of retaining business. Even though U.S. implementation efforts mainly are focused on U.S. companies, the FCPA (Foreign Corrupt Practices Act) of 1977 permits the government to take legal action against foreign companies that do business on U.S. capital markets. In addition, the law prohibits any payment done to a person knowing that it is meant for a prohibited foreign individual. Some U.S. companies have whined that the U.S anti-bribery laws are a disadvantage to them as several of their overseas competitors keep on paying bribes exclusive of fear of severe prosecution (Lander, 2009).
Ethics and practicality
In the past years, there has been a significant increase in investigations and prosecutions of foreign business bribery cases. About certain payments done to prohibited foreign individuals for the intention of obtaining or retaining business.The implementation of the anti-bribery law has had corrective effects on the way businesses carry out activities overseas. Large companies have argued that since U.S. corporations are under the risk of prosecution due to foreign bribery, other nations should. Therefore, they have funded organizations like Transparency International and due to this; other foreign countries have implemented laws related to the U.S. anti-bribery law (Weissman, 2002).
The implementation of the U.S anti-bribery law has lead to an increase in the number of investigations and actions against bribery in developing countries, under their domestic anti-bribery laws, for inappropriate payments made to their government officials by foreign businesses and individuals. Non-US companies and individuals consequently have a higher risk of several investigations and sanctions from any illegal deals (Deringer, 2009).
This law rules out corrupt payments to manipulate a foreign official’s act or choice and only if it helps in obtaining or retaining business. Therefore, the only acts that can be prosecuted under the law are corrupt payments made to obtain or retain businesses. In addition, the anti-bribery law has been weak over the years and history shows that few entities have been prosecuted for violation of the law. Arguably, it is said that a bribe is paid to a foreign official or individual to lessen a company’s tax burden or customs duties in a particular country (Weissman, 2002).
Enforcement of anti-bribery laws is not simply solved by bullet point plans. However, the socio-economic and political impacts of bribery cannot be ignored. Organizations like transparency international have been at the forefront in maintaining transparency and honesty in international organizations and the U.S has shown a lead in anti-bribery (Breidenbach, 2004).
Serious imposing of the FCPA actually is an advantage to U.S. businesses because it helps to protect the integrity of U.S. capital markets, ensure fairness and the assurance of investors who will be more encouraged to invest their money in U.S markets. Extensive corruption in several developing countries, together with weak implementation of anti-bribery laws in developed countries, has generated considerable dirty deals (Zwaniecki, 2007).
To be effective, the U.S government has initiated compliance programs that need to be directed to the particular business of a company and be implemented by the company. The punishment for violations of the law is severe and for convictions, companies can be fined and in addition to the fines, an individual could be jailed for up to five years (Campbell, 1998).
Breidenbach, M. (2004) Towards a Global Ethic. Web.
Campbell, R. (1998) Business Ethics and Anti-corruption. Web.
Deringer, F. (2009) the Extraterritorial Reach of US Anti-bribery Law. Web.
Lander, G. (2009) Compliance with U.S. Anti-bribery Laws. Web.
Weissman, R. (2002) Anti-Bribery Law Takes a Hit. Web.
Zwaniecki, A. (2007) Foreign Companies in United States Bound by Anti-bribery Law. Web.