The Foreign Corrupt Practices Act (FCPA) primarily prohibits U.S. companies from:

Question

Accepted Answer

Bribing foreign government officials to obtain business advantages. The Foreign Corrupt Practices Act (FCPA), enacted in 1977, primarily prohibits U.S. companies and their agents from making payments to foreign government officials for the purpose of obtaining or retaining business. The law also requires companies to maintain accurate books and records and establish adequate internal accounting controls to prevent and detect such payments.

Hiring foreign workers at lower wages relates to labor practices and wage equity, which are governed by different laws and ethical standards, not the FCPA. Selling products below cost in foreign markets describes dumping, which is addressed by international trade law and the World Trade Organization, not anti-corruption legislation. Importing goods manufactured with child labor is a supply chain ethics issue addressed by various trade agreements and labor standards, not the FCPA's anti-bribery provisions.

The FCPA is one of the most important pieces of legislation tested on the DSST Business Ethics exam in the context of global business. Students should understand both its anti-bribery provisions and its accounting/record-keeping requirements, as well as the distinction between illegal bribes and permissible facilitating payments.

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