n Foreign Corruption Practise Case Analysis 2022

RUNNING HEAD: FOREIGN CORRUPTION PRACTICES
Foreign Corruption Practices
Name of the Student
Name of the University
Author Note

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Response to Case 1:
Memorandum
To: The CEO of the Company
From:
Date:
Re: Discussion regarding the Foreign Corruption Practices which came to be known as the risk
factor of the world for bribery.
Purpose:
The purpose of this memorandum is to mention the CEO of the Company, whether the
series of payments made by the company are bribes or not. This can be explained by discussing
the Foreign Corrupt Practices Act.
Summary:
In this memo, a brief discussion has been done about the bribery system and its
consequences. In furtherance, advice has been provided to the CEO of the company to clear the
facts of the payments made by the company to various individuals are bribes or actual payments.
Issue:
The presentation of the Foreign Corrupt Practices Act in 1977 is enforced due to
widespread bribery in the U.S and other foreign companies. Congress enacted this Act for the
termination of corruption practices and also to initiate an honest trade to maintain the dignity and
integrity of the market in the field of corporate business. Corruption is an issue faced by
companies all over the world. In the last few decades, since the Foreign Corrupt Practices Act
has been enforced, the extension of commercial bribery has become distinct, and its consequence
hampers the economic market.
Commercial bribery is a type of business that is bad in the eye of law. In this present
system of free-market, the sale of goods should be based on service, quality and price. In the

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basic tenet commercial bribery is a fundamental destructive business. Commercial bribery of
officials in foreign places happens for assistance to corporations for the development of the
business. The foreign commercial bribery hampers the stability of foreign trade. It affects the
growth of public resources in the field of essential priorities such as infrastructure, education and
health. It weakens the public accountability and democratic values and declines the rule of legal
procedures.
Issuers- 15 U.S.C. § 78dd-1:
Section 30 A of the Securities Exchange Act 1934, which is stated at 15 U.S.C.§ 78dd-1,
explains the provision of anti-bribery leading the issuer. An organisation is an “issuer” under the
Foreign Corrupt Practices Act if it contains a class of safeties or securities empanelled under
section 12 of the Exchange Act or is essential to a periodic filing and several other reports along
with SEC under section 15(d) of the Exchange Act. As per 31st December 2011, there are 965
companies listed companies registered with SEC. The employees, directors, agents and officers
acting for an issuer and any other conspiracies can be impeached under the Foreign Corrupt
Practices Act.
Internal Distress—15 U.S.C. § 78dd-2:
The Foreign Corrupt Practices Act spreads over the “domestic concerns”. The actual
meaning of domestic concern is a person who can be a resident, national and citizen of any
country or any other institution, association, joint-stock company, partnership, unincorporated
organization, business trust or sole proprietorship that can be arranged under the law of any
particular country or its place of business is in that particular country.
Provincial Jurisdiction—15 U.S.C. § 78dd-3:
There are certain provisions by FCPA1 that applies to several entities or foreign nationals
that are never a domestic concern nor an issuer. From the year 1998, the provisions under FCPA
has enforced to several foreign individuals and entities those who are non-issuer through an
agent or directly involve in any other activities according to the act because of any corrupt
payment. Along with these individuals, the agents, employees, stockholders and directors can be
subjected to the anti-bribery prohibitions of the FCPA.
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The FCPA2 prohibits the payments that are made through third parties or intermediaries
and are considered as corrupted payments. The corrupted payments can be defined as the
payments given to any individual with knowledge of that portion of the money, or the value will
be promised, offered or given indirectly or directly.
Fresenius Medical Care AG & Co.- In this case, the company is a provider of services related
to the German country. It works in the field of providing health care to individuals suffering
from a failure of the kidney. The company has agreed to pay $231 to SEC and Justice department
to settle the violations done by them against the rule of FCPA.
Advice:
(1) Payment of $50 to the electric expert to hook the line for Family’s apartment will be
considered as a bribe as the lineman cannot provide a document of receipt against the
payment for hooking up the line.
(2) The contribution to the pastor stated as equivalent to tuition fees for one year is a bribe it
cannot be considered as a charitable donation as the pastor will help in enrolling the student
against the contribution paid.
(3) Providing a red wine to the inspector is considered as a bribe as the building inspector will
approve the newly constructed building since the building is not appropriately built according
to the norms. So the inspector has been bribed with wine on account of granting the building
as perfect without any objection.
(4) A gift to the commissioner of the county as a single bottle of wine is not a bribe as it was
gifted to congratulate him on the event of the first childbirth and not for any illegal or
irrelevant activities.
(5) All the expense for the trip paid to the chief national agency for the department of the
environment for travelling to plant and his accommodation in a four star hotel is considered
as a bribe as he was arranged to stay in a star rated hotel which can be considered as
extravagance in relation to the accommodation provided to the chief of the environmental
agency.
Response to Case 2:
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Memorandum
To:
From:
Date:
Re: Explanation to be provided as a General Counsel for a US company whether the company
has violated the rules of FCPA.
Purpose:
The purpose of this memorandum is to justify the norms for violation of the FCPA with
charitable donations made by the company. This can be explained by discussing the provisions
of the Foreign Corrupt Practices Act.
Summary:
In this memo, a brief discussion has been done about the risk in contribution to charitable
donations and its consequences with the bribery system according to the FCPA. In furtherance,
explanation has been provided as a General Counsel of the company to clear the facts why the
payment has not been made by the company to the charitable institution to clear out the
inspection of the manufacturing plant as suggested by the local agent.
Issue:
A donation made for charity is considered as a gift, by a person or an organisation to a
non-profitable organisation or charitable organisation. It includes venues, cash, personnel time
and equipment to a charitable institution or organisation designated as a centre of charity. It
carries risk and can be a case of the channel for corruption payment. This can be illustrated by
the example mention herewith.
An official in a government organisation in conciliation with a business institution may
reveal that they are attached to some charitable institution and can request some donation made

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with charity. A charitable organisation or the charity made by the company can be related to an
administrative party or an individual administering with a power of making a decision.
The FCPA provision has a customary gradient of an anti-corruption peril like
entertainment and donations, acquisitions and mergers and joint ventures. Charitable gifts can be
a disguise of some clever decision for some inappropriate payment to administration or the
official of the government or the relative of the same. Like entertainments and gifts, an
organisation should have a proper procedure for donating to the charitable institutions to confirm
the charity donated is legitimate. In the case of charity given to agents, there should be some
procedure for the donations made to charitable institutions as it is essential to receive
documentation for approval and review process. Every process of a charitable organisation
should be documented, and they should focus on the function and the purpose of that particular
organisation. A company or an institution has to examine the circumstances adjacent to the
donation made under charity. The basic risk involves in the arrangements is the connection
between the local committee or the organisation and the company associated in the project.
It is essential to observe the actions of a charitable organisation to assure the activities
made by them should maintain a purpose for receiving the charity. If there are any observations
detected changes that have noticed, the company should re-assess the connection between them
and should re-examine all the legal options terminate the connection with that particular
charitable organisation. There are several risk factors in contributing to a charitable organisation
as some they receive in the form of charity which cannot be documented and thus leads to
corrupted payments in the brand name of that organisation.
Advice:
As a General Counsel of the Company, it is advisable if the company would have paid
the charitable donation to the agent or to the relative of the official of that department it would
turn into a corrupted payment. This is because several cases have proved that charitable
donations are not used as a legitimate purpose. It becomes a risk factor to pay to the charitable
organisation, which later on turns to be a bribe violating the FCPA3. In the present case if the
company would have paid the agent for the sake of charitable donation which denotes as a bribe
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on the favour of the inspector to approve the building for use and not for any purpose of charity
in good faith.
In one of the specific implementation, an organisation paid $500,000 fine for paying
improperly to an institution for charity which was governed by a foreign administrative official
influenced by the power of deciding for awarding business to that particular organisation. The
organisation was one of the largest sponsors of the charity. In this case, the matter has fixed with
SEC in association with a domestic settlement, and the implemented action highlights the risk
factors associated with charitable payments. In the field of charitable donations, documentation
is an essential factor against any payment provided to the charitable organisations. In every case
of donations, contractual rules and regulations should be added to lessen the risk factor. There
are several factors that are required to be adjudged before providing any charity to an
organisation:
 Having a policy of giving charity
 Matter of relationship
 There must be a proper purpose for donating
 Cross-check the local law related to contribution for charity
 There should be follow up procedure after donating the charity
 There should be clear transparency between the charitable organisation and the company.
The company can be found guilty under FCPA if found to make corrupt payment in the name of
a charitable donation to any of the charitable organisation. Thus the proposed course of action
decided by the company became helpful as on commission of that payment would lead to
corruption practices which has been considered as a bribe which is one of most basic risk factor
in this market of bribery system. There are risky areas about documentation in case of a
charitable donation to any organisation practising illegitimate charity.
Response to Case 3:
Memorandum

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To: The Board of Directors
From:
Date:
Re: Explanation to be provided to the Board of Directors of the company narrating the potential
liability against the anti-bribery and the penalties and other recommendations which will be
appropriate for the company.
Purpose:
The purpose of this memorandum is to justify the potential liability under FCPA and the
penalties associated with it. On the other hand, recommendations are to be provided for the next
step which will prevent the company from violating the FCPA under the rules and regulation of
the U.S. Government,
Summary:
In this memo, a brief discussion has been done about the penalties on violation of FCPA and the
different types of potential liability associated under FCPA. In the last phase of this
memorandum narrates the appropriate recommendation for the betterment of the company so that
it abides by the FCPA according to the rules and regulation guided by the government.
Issue:
The basic principles of corporate obligation apply to the FCPA. Therefore an organisation is
liable when its agents, employees, directors and officers were performing within the possibility
of their employment tenure, obligate FCPA violations envisioned, for the profit of the
organisation. On the same discussion with other statutes, SEC and DOJ express to ethics of
parent-subsidiary and inheritor obligation in assessing corporate liability.
There are several methods in which the parent organisation may be responsible for bribes given
by its subordinate. Firstly, a paternal may have partaken adequately in the activities to be liable
for the direct conduct, when it focused it is subordinate’s misconduct or directly contributed to

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the bribe system. Secondly, a paternal may be responsible for it is subordinate’s conduct under
the principles of a traditional agency. The basic specification of an agency controls.
Consequently, DOJ and SEC assess the paternal control which includes the paternal knowledge
and course of the subordinate’s actions, in the perspective of the particular transaction when
assessing whether a subordinate is a mediator of the paternal. Although the connection between
the paternal and subordinate is essential in this investigation, so practically the realism shows
how the paternal and subordinate coordinate.
Successor Liability:
The organisation obtains a host of obligations when they combine with or obtain another
organisation, which includes those rising out of regulations, torts, contract and statutes. As a case
of a legal matter, when an organisation combines with or obtains another organisation, the
beneficiary organisation assumes the antecedent organisation’s liabilities. Successor
responsibility is a basic constituent of corporate law which prevents organisations or companies
from avoiding responsibility by reorganising. Successor’s responsibility relates to every civil and
criminal responsibilities, and violations of the FCPA are exceptions.
Penalties:
There are several provisions for penalties to be applied for violation of FCPA. The DOJ and SEC
became more aggressive, along with violations of FCPA implementation:
The fine for the individual in the field of criminal upon anti-bribery violations is $100,000 and
imprisonment for five years. In the case of Civil violation, the fine for anti-bribery violation is
$10,000 as there is no prison sentence in case civil suits.
On the other hand, if the FCPA violations are caused by corporations, in case of criminal
violation the fine is $2,000,000, and on the similar case, it takes place in civil suits the anti-
bribery violation imposes a fine of $10,000.
Many top multinational companies have settled their cases concerning the anti-bribery violation.
The violation of FCPA and anti-bribery can lead an individual or a corporation to heinous

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crimes, which is bad in the eye of law. Therefore the penalties for civil and criminal in case of
FCPA and Anti-bribery in the record of books are significant.
Advice:
The following are the list of advice provided as a recommendation for the plan of the company:
Next to the centre of some effective anti-corruption agreement program is written strategies,
procedures, and additional internal controls that are designed to avert improper expenses from
being made on behalf of the corporation. These panels might comprise, among others, a code of
commercial ethics and behaviour, an anticorruption submission policy directing the FCPA and
other appropriate anti-corruption laws, worker screening actions, pre-retention business
companion due to diligence necessities, limitations on the provision of commercial courtesies,
and preparation to educate workers about applicable rules. Foreign Corrupt Practices Act,
which was delivered by the FCPA implementation experts in November 2012, defines such
controls as amongst the trademarks of an effective submission program, and the DOJ has
required the number of companies that have established FCPA claims in current years to approve
to implement such controls as a disorder of settlement. Further, the U.S. Guidelines for
Sentencing applicable to companies recognise that these controls are an essential constituent of
ethics and submission program. Also, various global, nonprofit and nongovernmental
organisations that toil to fight corruption, including the Organisation for Economic Co-operation
and Development (OECD), Transparency International, and the World Economic Forum, suggest
that corporations implement types of controls to avoid bribery and help to ensure submission
with appropriate anti-corruption rules.
A corporation that has robust preventive controls in places can often prove to controllers that it is
dedicated to ethical trade practices if any misbehaviour is the result of avoidance by a reprobate
worker and not an environment of corruption or a systematic flaw. Accordingly, it may be able to
encourage controllers that the inquiry need not enlarge beyond the actions concerned in the
accusations to other functioning units or topographical locations.
Only having controls in place may not be sufficient, however, and a sceptical controller who has
knowledgeable of suspected misbehaviour will likely want to ratify that the corporation’s

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controls are both suitably designed and functioning effectively before closing that the
delinquency is an irregularity. It is crucial that a corporation document and its compliance
efforts. For example, training accounts showing that a concerned worker received steady anti-
corruption preparation or due meticulousness materials representing that the corporation
thoroughly examined the unethical third party at issue can serve as proof that misbehaviour
occurred despite the corporation’s best efforts to guard against it. Also, a company should
continually review and adjust its controls to safeguard that they are suitably designed and active
as intended. Such observing can be shown through interrupted risk assessments, audits, and less
formal confirmation and testing actions. Again, authenticating the consequences of these actions
and any resultant counteractive measures is essential to confirm the corporation’s efforts to
uphold a best performs submission program.

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