Gifts and Business Entertainment under the FCPA. Artikel vom 18. Juni 2010 von Thomas R. Fox, USA.
“If one were to reflect upon the providing of gifts and business entertainment to foreign governmental officials by a US Company, one might reasonably conclude that after 30 odd years of the Foreign Corrupt Practices Act (FCPA), US companies might follow its prescriptions regarding gifts and business entertainment. However 2009 brought about a couple of notable FCPA enforcement actions where one of the significant FCPA violations was precisely in this area.
In July 2009, Control Components, Inc (CCI) pled guilty to substantive FCPA anti-bribery charges and to conspiring to violate the FCPA. CCI engaged in actions including rewarding customers’ employees for the award of contracts with expensive gifts and extravagant overseas holidays, to destinations including Disneyland, Las Vegas and Hawaii, under the guise of training and inspection trips. In addition, CCI paid the college tuition for the children of at least two executives of CCI’s customers. For the Department of Justice (DOJ) information filed against CCI, click here.
To round out the year on December 31, 2009 UTStarcom pled guilty to conduct which violated the FCPA which included (among other FCPA violations):
1. Arranging and paying for travel to popular tourist destinations in the United States, including Hawaii, Las Vegas and New York City, when such trips were recorded as training expenses at UTStarcom facilities. However, it is worthwhile to note that UTStarcom had no facilities in these areas. The trips also included a cash allowance of between $800 and $3,000 per person.
2. Spending nearly $7 million on lavish gifts and all-expenses paid executive training programs in the US for existing and potential foreign government customers in China and Thailand.
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