DEFINITION of 'Foreign Corrupt Practices Act'
A United States law passed in 1977 which prohibits U.S. firms and individuals from paying bribes to foreign officials in furtherance of a business deal and against the foreign official's duties. The FCPA places no minimum amount for a punishment of a bribery payment. The Foreign Corrupt Practices Act also specifies required accounting transparency guidelines.
BREAKING DOWN 'Foreign Corrupt Practices Act'
While the act requires corrupt intent, it is better to err on the side of caution when dealing with a foreign official for business matters. Punishments allowable under the act include fines of up to double the amount of the benefit expected to be received from the bribery. In addition, the individuals involved can face imprisonment for up to five years.