For more information about the FCPA, visit http://usdoj.gov/criminal/fraud/fcpa or
https://www.investor.gov/additional-resources/general-resources/glossary/foreign-corrupt-practices-act-fcpa Berklee is subject to numerous laws and regulations that govern many activities of the college, both as an institution of higher education and as an entity operating globally. All members of the college community are expected to familiarize themselves with the federal, state, and local laws and regulations that apply to the activities in which they are involved, and to conduct themselves in compliance with such laws and regulations. Noncompliance, even when inadvertent, can have severe consequences for the people involved and for the college, including civil liability, loss of funding, reputational harm, and, in extreme cases, criminal prosecution or sanctions. The college expects all members of the community to maintain the highest ethical and professional standards in all interactions and relationships involving the college or college business; special attention and diligence is required when those interactions involve international activities. To assist members of the community and further their understanding of laws applicable to Berklee activity globally, the general counsel provides the following guidance on complying with the U.S. Foreign Corrupt Practices Act (FCPA). FCPA Applicability and OverviewThe FCPA applies primarily to interactions between U.S. persons and foreign officials. It also applies when engaging with a third party with ties to foreign officials or governments. If you are engaged in activities like the examples below or otherwise involving foreign officials, you must consider the FCPA:
Depending upon the activity and its location, other countries’ laws may also be relevant. Some, such as the U.K. Bribery Act, are stricter than their U.S. counterpart and may extend to transactions with private persons as well as foreign officials. As a general matter, the anti-bribery provisions of the FCPA make it unlawful to bribe a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person, or for the purpose of otherwise securing an improper advantage. Although this seems simple to comply with, the FCPA extends well beyond what many people would consider a typical “bribe” (e.g., cash in an envelope slipped furtively to an official in a dark alley). Violations of the FCPA contain three main elements: (1) payment or anything of value is offered, promised, or given (2) to a foreign official, political party, party official, or candidate (3) for a corrupt purpose.
The FCPA also extends to bribery of a “foreign political party or official thereof, or any candidate for foreign political office.”
Note that the FCPA may be violated even if:
See examples and red flags below for things to look out for concerning FCPA compliance when involved in any international activity. Reducing the Risk That Acts May Be Viewed as Having a Corrupt PurposeWhen hosting a foreign official, it may be appropriate to pay for the official’s reasonable lodging and dining expenses, so long as these payments are not being done to improperly influence the foreign official. (Activities such as giving a lavish meal or a gift that does not have a Berklee connection—e.g., tickets to the Grammys—or providing benefits to family members of an official—e.g., travel costs—may not be considered reasonable and, therefore, may be more likely to be construed as having a corrupt purpose.) It's important to note that the FCPA applies to any and all "things of value," including gifts. Whether giving a gift may be seen as a violation of the FCPA requires a factual analysis of the circumstances under which the gift is given. It is prudent to check with your supervisor and appropriate college offices before giving gifts to persons who might be considered foreign officials. Certain Payments to Foreign Officials That Do Fall outside the FCPAThere are certain limited situations where payments to foreign officials may be acceptable under the FCPA. One of those exceptions is referred to as “facilitation payments”; these are payments to a foreign official for purposes of facilitating, expediting, or securing the performance of routine government action. For example, it may not be a violation of the FCPA to make a payment to a foreign official to expedite the granting of a permit or license that you are otherwise entitled to receive. These payments are for nondiscretionary, ministerial government actions. In addition, payment to a foreign official may be acceptable when it is necessary to prevent imminent personal injury or harm—for instance, if a colleague requires emergency medical care and a payment will expedite the dispatch of an ambulance. Extreme caution should be used when determining whether a payment fits within these exceptions, and you should consult with your supervisor and the general counsel. Penalties for Violating the FCPAThe penalties for FCPA violations are stiff, and enforcement activity by the U.S. government is on the rise. Individuals who violate the FCPA’s anti-bribery provisions face penalties up to a $100,000 fine per violation, and up to a five-year prison sentence per violation. Note that wherever the government pursues criminal charges, it may seek additional fines under the Alternative Fines Act (AFA). Accordingly, pursuant to the AFA, all criminal fines imposed under the FCPA may be increased to twice the improper gain obtained, or twice the loss incurred by another person. ExamplesOverseas ActivityYou need help locating performance space for a teaching program and auditions in Country X. In the course of a conversation with a colleague from that country, he recommends you hire Company Y. To assess whether there is any risk in this scenario, consider these questions:
It is important to know the answers to these questions before acting on your colleague’s recommendation. If your colleague does qualify as a foreign official, is in a position to exert influence in your favor with respect to a business opportunity in Country X, and/or can be shown to benefit by your hiring of Company Y, the scenario qualifies as a possible violation of the FCPA. U.S.-Based ActivityThe college is hosting an event concerning music from Country X and has invited officials from a peer entity in Country X to present at the event, and musicians from Country X to perform. To assess potential risks involved in this scenario, consider the following questions:
Note that all gifts and similar expenses are not prohibited or necessarily rise to the level of an FCPA violation. College officials planning such events or visits should, however, remain vigilant to FCPA considerations when engaging in such activities. Red FlagsWhile the existence of red flags raise potential FCPA compliance concerns that should be addressed before proceeding with a transaction, they do not necessarily mean that the transaction violates the FCPA. Look out for the following red flags and exercise extreme diligence in assessing and handling any such scenarios. Contact college counsel for further guidance in addressing any red flags. Common red flags associated with third parties, including vendors and consultants, include the following:
ResourcesQuestions about this protocol or the FCPA generally should be addressed the general counsel at . The following resources contain additional information and guidance:
Why is FCPA criticized?Critics of the FCPA are correct to say that enforcement can place U.S. businesses at a competitive disadvantage in securing business opportunities and that their next-best opportunities may well be less profitable in many instances.
Which of the following statements about the Foreign Corrupt Practices Act is true?Which of the following is true of the Foreign Corrupt Practices Act of 1977? It is designed to stop bribery of foreign officials by American citizens.
What has been a result of the Foreign Corrupt Practices Act quizlet?The Foreign Corrupt Practices Act (FCPA) is a United States law passed in 1977 that prohibits U.S. firms and individuals from paying bribes to foreign officials in furtherance of a business deal. The FCPA places no minimum amount for a punishment of a bribery payment.
Which of the following is permitted by the Foreign Corrupt Practices Act quizlet?58) A payment to a customs official to clear legitimate merchandise is permitted by the Foreign Corrupt Practices Act.
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