The core aim of the Foreign Corrupt Practices Act (FCPA) is to prohibit companies and their individual officers from influencing foreign officials with any personal payments or rewards.

The Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. § 78dd-1, et seq.) is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests.

The FCPA is applicable worldwide and extends specifically to publicly traded companies and their personnel, including officers, directors, employees, shareholders, and agents. Following amendments made in 1998, the Act also applies to foreign firms and persons who, either directly or through intermediaries, help facilitate or carry out corrupt payments in U.S. territory.

Pursuant to its anti-bribery purpose, the FCPA amends the Securities Exchange Act of 1934 to require all companies with securities listed in the U.S. to meet certain accounting provisions, such as ensuring accurate and transparent financial records and maintaining internal accounting controls.

The FCPA is jointly enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which apply criminal and civil penalties, respectively.

Since its passage, the FCPA has been subject to controversy and criticism, namely whether its enforcement discourages U.S. companies from investing abroad. The Act was subsequently amended in 1988 to raise the standard of proof for a finding of bribery.

The FCPA applies to any person who has a certain degree of connection to the United States and engages in corrupt practices abroad, as well as to U.S. businesses, foreign corporations trading securities in the U.S., American nationals, citizens, and residents acting in furtherance of a foreign corrupt practice, whether or not they are physically present in the U.S. This is considered the nationality principle of the Act. Any individuals involved in these activities may face prison time.

In the case of foreign natural and legal persons, the Act covers their deeds if they are in the U.S. at the time of the corrupt conduct. This is considered the protective principle of the Act. Moreover, the FCPA governs not only direct payments to foreign officials, candidates, and parties, but payments made to any other recipient in furtherance of influencing a foreign official, candidate, or party. These payments are not restricted to monetary forms and may include anything of value. This is considered the territoriality principle of the act.

The FCPA is subject to ongoing scholarly and congressional debate regarding its effects on international commerce. Scholars have found that its enforcement discourages U.S. firms from investing in foreign markets, particularly those where graft, bribery, and other forms of corruption are endemic. This coincides with the well established observation that companies engaging in mergers and acquisitions in emerging markets face a uniquely increased level of regulatory and corruption risk.