The Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (FCPA) prohibit corruption of overseas lawmaking official, The Foreign Corrupt Practices Act (FCPA) applies to any U. S. person and make it unlawful for that U. S. persons to bribe a foreign government bureaucrat for the intention of attaining or preserving their corporation. FCPA deals only with bribes that are anticipated of attaining or preserving their company; this provision is imposed by Department of Justice (DOJ), If U.

S. persons found or charged breaching the Foreign Corrupt Practices Act (FCPA) will be able to defend themselves by providing evidence that the disbursement made was legitimate in agreement with written laws of the host country. And if any U. S. person found guilty of their dealings in light of the Foreign Corrupt Practices Act (FCPA) that individual can be fined up to $100,000 and jailed for up to five years, or both.

The Foreign Corrupt Practices Act (FCPA) has strict provisions for the violation of the accounting procedure of the companies which are publicly traded in the U. S. ; the rationale for closely monitoring of the accounting procedure is due to the fact that accounts are frequently used to make illegal payments and also to forbid the mislabeling of expenditure. If any U. S. person found guilty of violating the accounting and record-keeping is subjected to consequence which includes monetary fines but no criminal penalties are imposed.

This practice sounds wonderful but in reality it’s a different story altogether for instance if one want to do business in the international market, lot of consideration is given to localization of the product. This is done to cater the local market, there fore one has to change accordingly to match with the condition of the market in order to be successful. Correspondingly the Foreign Corrupt Practices Act (FCPA) does not have that change mechanism that is competitive disadvantage to do business in overseas markets.

Not only were overseas rivals permitted to put forward bribes to overseas government bureaucrats, they were also permissible to alter this amount by deducting these payments from the business expenses. In my opinion Geletx and Jeds concerns about the office in Lima, Peru is breaching the Foreign Corrupt Practices Act (FCPA) which applies to any U. S. person and makes it unlawful for that U. S.

person to bribe foreign government bureaucrat for the intention of attaining or preserving their business. The commissions which it paid to sales people for the sale is their for their taking for the employees and making a deal with customer to give a share of that in order to make a sale is unethical on any moral grounds and is against the Foreign Corrupt Practices Act (FCPA) as in the United States, such expenditure would be commercial bribery and a desecration of Geletex’s code of ethics.

This situation is in contravention of the company’s policy and procedures of doing business and should be rectified in order to be safe in the court of law were Geletex’s will face harsh penalty and may be fined up to $100,000 and jailed for up to five years, or both. This unethical act should be rectified immediately for the betterment of the organization, if a mark of disgrace is connected with Geletex’s it will have an adverse affect on the organization goodwill.

Jed Richardson has to understand the foreign market phenomena is different then the local market which is simple and easy to comprehend, overseas market is a different ball game altogether. Business is done differently and alteration has to be made to run the business for instance if one want to do business in china bribery is practiced in order to run the business, one has to bribe to keep their business in a running condition.

I would recommend Jed Richardson to allow salespeople to pay kickbacks in exchange for catches as it is acceptable in Lima, Peru and in order to be competitive we have do as the local to adjust in the foreign market, further I think that Jed Richardson should change his perception as at present business market world over have cutthroat competition and by not amending the business to the environment means losing the business to competitor for instance if P&G hadn’t changed their diaper to the thin ones running successfully in china by the local competition, P&G would be out of china.So businesses have to alter their strategy accordingly to enchant the foreign market.

Reference:

Stuart H. Deming, Stuart (2006). The Foreign Corrupt Practices Act and the New International Norms (International Practitioner's Deskbook Series) .