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Oh wow. FCPA violations. One of the key rules of American business is that you do not dance around with the FCPA [0]. (I suspect many new startup managers are n

Oh wow. FCPA violations. One of the key rules of American business is that you do not dance around with the FCPA [0]. (I suspect many new startup managers are not familiar with the FCPA but you can bet their investors are.) Violations of the FCPA do not just result in fines, they result in actual jail time for whomever did the bribing, whether they be individual low-level employees, contractors, or CEOs. That said, the FCPA explicitly allows small "greasing" bribes that encourage low-level bureaucrats to expedite some action they would have taken anyway -- when such greasing payments are legal in the country in question. Obtaining the medical records of a rape victim certainly does not fall within this exception. [0] https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act

rayiner 9y ago
Note that the facilitation payment exception to the FCPA is (i) extremely narrow; (ii) still requires the company to accurately report the payment as a facilitation payment, which Uber probably didn't do: https://globalanticorruptionblog.com/2014/06/17/the-fcpas-facilitating-payments-exception-mostly-harmless https://globalanticorruptionblog.com/2014/06/17/the-fcpas-fa... > On top of that, even if a grease payment is exempt from the FCPA’s anti-bribery provisions, if that payment were not accurately recorded as a facilitation payment in the company’s books, then the company would be in violation of the FCPA’s accounting provisions–and if the mischaracterization in the books was “willful and knowing,” this would also be a criminal violation. On the other hand, if the company were to accurately record facilitation payments in its books, it would be officially confessing violations of the host country’s anti-bribery laws, as well as the laws of other countries that might have jurisdiction over the transaction (such as the UK) that lack any exception for facilitation payments in their foreign bribery laws. It is perhaps for this reason that I’m not aware of any company that today formally records facilitation bribes accurately in its books.
- dreamcompiler 9y ago
  Very interesting! Thanks. The FCPA is a minefield that I'm still trying to wrap my head around many years after I was first trained on it.
  - tomp 9y ago
    What do you mean by "minefield"? To me, it sounds pretty easy to comply with - just don't offer (or accept) bribes.
    - remline 9y ago
      Yes, what could possibly go wrong if an official doesn't respect the fact that you can't bribe them, pay their "official" fee, or hire a consultant from a very short list of "approved" consultants? Anyone who hasn't chosen to spend years in jail when they were a victim of the airport mall shoplifter scam is an example of someone who has violated the FCPA.
      - ada1981 9y ago
        Is this what you mean by "airport mall scam"? https://www.tripadvisor.com/ShowTopic-g293916-i3687-k6457766-Bangkok_Airport_Scam-Bangkok.html https://www.tripadvisor.com/ShowTopic-g293916-i3687-k6457766... TL;DR - Get accused of shoplifting and police give you the option of paying a $5k - $10k fine to avoid waiting in Thai jail for months awaiting trial. Some accounts say it wasn't a scam and the people were actually caught on CCTV and that they were given the option of a paying a bribe to avoid waiting months in jail.
        remline 9y ago
        Exactly, and the defense claimed they handled the goods and put them back with the video being cut to simply imply they never were put back.. If you can claim duress in this case, then can you not bribe authorities in every case of being arrested and awaiting trial? Do you need to file paperwork to claim this duress, might another country acquire this paperwork before you flee? AFAIK, it is all a minefield as the higher post claims.
      - rayiner 9y ago
        If they're holding you on trumped up allegations demanding a bribe to let you go, that falls under the FCPA's duress exception: http://www.fcpablog.com/blog/2012/11/14/doj-and-sec-release-unprecedented-joint-fcpa-guidance.html http://www.fcpablog.com/blog/2012/11/14/doj-and-sec-release-...
- deleted 9y ago
  [deleted]
whipoodle 9y ago
They've crossed a number of bright lines and they're still here. I don't mean this in a good way.
ojbyrne 9y ago
Aren't there some rumors that the Trump administration is weakening enforcement of the FCPA?
- dreamcompiler 9y ago
  The Wikipedia article says that Trump called the FCPA a "horrible law" but Jeff Sessions says he'll continue to enforce it.
  - r00fus 9y ago
    Which means "selective enforcement".
    - dsfyu404ed 9y ago
      What part about "Jeff Sessions" didn't you get? The dude is pretty fanatical when it comes to enforcing the law. I don't think he understands what "selective" means.
      - headhuntermdk 9y ago
        Enforcing the law like not committing perjury during his confirmation process?
        dsfyu404ed 9y ago
        I didn't say he was good at doing the job consistently, just that he seems pretty fanatical about enforcing it. I can see him ignoring the political side of things and enforcing laws very comprehensively depending on how it fits his ideology and the mood he's in that day.
    - PeachPlum 9y ago
      All laws are selectively enforced.
donavanm 9y ago
As you point out for a business the FCPA is both elementary, serious, and enitrely possible to comply with. That said the "jail time" provision is a joke. Going from memory no corporate officer has ever gone to prison for an FCPA violation. A handful have been hung out to pay nominal fines. The vast majority of personal culpability (when it does happen) are settled by the company. Edit: yes, some employees have gone to jail. But not officers that I can recall.
- matt4077 9y ago
  While I feel the same raging wish to see corrupt business leaders suffer, I think it's just the nature of these cases that most enforcement works via Civil liability. The FCPA is mostly concerned with larger, often public companies. Corruption at that level almost certainly is a sign of a organisational failure. It's the shared responsibility of a lot of people to create structures that don't allow for corruption. At the core of it are the incentives: for an employee to consider bribing someone, a lot must have gone wrong. After all it carries the risk of jail time for them, while any benefits go to their employer first.
  - honestoHeminway 9y ago
    I distinctly remember that for quite some time doing buisness in israel put you on a black list on many arab countrys in the middle east. So finding out who bribed to do buisness with both sides- was as easy as clicking on the "subsidiary" map on many companys sides. And there they where, in peacefull coexistance, overcoming stupid hatred and propaganda with pocket butter.
    - dmoy 9y ago
      "Doing business"? Hell, setting foot in Israel puts you on a blacklist in many Arab countries, to the extent where if you do this often you generally carry two passports. Goes the other way around too... try going into Israel after having Lebanon or Syria stamps on your passport and enjoy an hour in a dimly lit room answering questions to a couple of stone faced idf officers.
mc32 9y ago
An off-topic gotcha can be illegally importing things into overseas offices --those momentary expediencies can result in long term bans or oversight from those governments when trying to get other things in legally. Always follow your legal dept guidance. No matter how trivial it may seem (it's just for the expo, client demo, etc).

rayiner 9y ago

Note that the facilitation payment exception to the FCPA is (i) extremely narrow; (ii) still requires the company to accurately report the payment as a facilitation payment, which Uber probably didn't do: https://globalanticorruptionblog.com/2014/06/17/the-fcpas-facilitating-payments-exception-mostly-harmless https://globalanticorruptionblog.com/2014/06/17/the-fcpas-fa... > On top of that, even if a grease payment is exempt from the FCPA’s anti-bribery provisions, if that payment were not accurately recorded as a facilitation payment in the company’s books, then the company would be in violation of the FCPA’s accounting provisions–and if the mischaracterization in the books was “willful and knowing,” this would also be a criminal violation. On the other hand, if the company were to accurately record facilitation payments in its books, it would be officially confessing violations of the host country’s anti-bribery laws, as well as the laws of other countries that might have jurisdiction over the transaction (such as the UK) that lack any exception for facilitation payments in their foreign bribery laws. It is perhaps for this reason that I’m not aware of any company that today formally records facilitation bribes accurately in its books.

dreamcompiler 9y ago
Very interesting! Thanks. The FCPA is a minefield that I'm still trying to wrap my head around many years after I was first trained on it.
- tomp 9y ago
  What do you mean by "minefield"? To me, it sounds pretty easy to comply with - just don't offer (or accept) bribes.
  - remline 9y ago
    Yes, what could possibly go wrong if an official doesn't respect the fact that you can't bribe them, pay their "official" fee, or hire a consultant from a very short list of "approved" consultants? Anyone who hasn't chosen to spend years in jail when they were a victim of the airport mall shoplifter scam is an example of someone who has violated the FCPA.
    - ada1981 9y ago
      Is this what you mean by "airport mall scam"? https://www.tripadvisor.com/ShowTopic-g293916-i3687-k6457766-Bangkok_Airport_Scam-Bangkok.html https://www.tripadvisor.com/ShowTopic-g293916-i3687-k6457766... TL;DR - Get accused of shoplifting and police give you the option of paying a $5k - $10k fine to avoid waiting in Thai jail for months awaiting trial. Some accounts say it wasn't a scam and the people were actually caught on CCTV and that they were given the option of a paying a bribe to avoid waiting months in jail.
      - remline 9y ago
        Exactly, and the defense claimed they handled the goods and put them back with the video being cut to simply imply they never were put back.. If you can claim duress in this case, then can you not bribe authorities in every case of being arrested and awaiting trial? Do you need to file paperwork to claim this duress, might another country acquire this paperwork before you flee? AFAIK, it is all a minefield as the higher post claims.
    - rayiner 9y ago
      If they're holding you on trumped up allegations demanding a bribe to let you go, that falls under the FCPA's duress exception: http://www.fcpablog.com/blog/2012/11/14/doj-and-sec-release-unprecedented-joint-fcpa-guidance.html http://www.fcpablog.com/blog/2012/11/14/doj-and-sec-release-...
deleted 9y ago
[deleted]

whipoodle 9y ago

They've crossed a number of bright lines and they're still here. I don't mean this in a good way.

ojbyrne 9y ago

Aren't there some rumors that the Trump administration is weakening enforcement of the FCPA?

dreamcompiler 9y ago
The Wikipedia article says that Trump called the FCPA a "horrible law" but Jeff Sessions says he'll continue to enforce it.
- r00fus 9y ago
  Which means "selective enforcement".
  - dsfyu404ed 9y ago
    What part about "Jeff Sessions" didn't you get? The dude is pretty fanatical when it comes to enforcing the law. I don't think he understands what "selective" means.
    - headhuntermdk 9y ago
      Enforcing the law like not committing perjury during his confirmation process?
      - dsfyu404ed 9y ago
        I didn't say he was good at doing the job consistently, just that he seems pretty fanatical about enforcing it. I can see him ignoring the political side of things and enforcing laws very comprehensively depending on how it fits his ideology and the mood he's in that day.
  - PeachPlum 9y ago
    All laws are selectively enforced.

donavanm 9y ago

As you point out for a business the FCPA is both elementary, serious, and enitrely possible to comply with. That said the "jail time" provision is a joke. Going from memory no corporate officer has ever gone to prison for an FCPA violation. A handful have been hung out to pay nominal fines. The vast majority of personal culpability (when it does happen) are settled by the company. Edit: yes, some employees have gone to jail. But not officers that I can recall.

matt4077 9y ago
While I feel the same raging wish to see corrupt business leaders suffer, I think it's just the nature of these cases that most enforcement works via Civil liability. The FCPA is mostly concerned with larger, often public companies. Corruption at that level almost certainly is a sign of a organisational failure. It's the shared responsibility of a lot of people to create structures that don't allow for corruption. At the core of it are the incentives: for an employee to consider bribing someone, a lot must have gone wrong. After all it carries the risk of jail time for them, while any benefits go to their employer first.
- honestoHeminway 9y ago
  I distinctly remember that for quite some time doing buisness in israel put you on a black list on many arab countrys in the middle east. So finding out who bribed to do buisness with both sides- was as easy as clicking on the "subsidiary" map on many companys sides. And there they where, in peacefull coexistance, overcoming stupid hatred and propaganda with pocket butter.
  - dmoy 9y ago
    "Doing business"? Hell, setting foot in Israel puts you on a blacklist in many Arab countries, to the extent where if you do this often you generally carry two passports. Goes the other way around too... try going into Israel after having Lebanon or Syria stamps on your passport and enjoy an hour in a dimly lit room answering questions to a couple of stone faced idf officers.

mc32 9y ago

An off-topic gotcha can be illegally importing things into overseas offices --those momentary expediencies can result in long term bans or oversight from those governments when trying to get other things in legally. Always follow your legal dept guidance. No matter how trivial it may seem (it's just for the expo, client demo, etc).