Foreign Corrupt Practices Act suggests that companies should be punished regardless of the country in which companies were established and the country where the bribe was given. Although acts such as the UK Bribery Act, the Brazil Clean Company Act, and the France Anti-Bribery Act contain harsher clauses than the FCPA, they lag behind the FCPA in terms of scope. Nevertheless, transactions around the whole world are covered by the FCPA. For this reason, the FCPA is still one of the most potent and effective laws for preventing financial crime. The US Securities Exchange Commission applies FCPA clauses to listed companies and the US Department of Justice to non-listed companies.
According to Lexis Nexis, there are several targets of FCPA, such as preventing corruption activities, facilitating the success of honest companies, and ensuring that companies gain the trust of the public. In addition, the Law aims to make companies' transparent accounting records transparent and requires that the accounting accounts contain the necessary details in every transaction. In addition, internal control systems should be used more actively.
FCPA, which wants to have a broad impact worldwide, has kept the scope of definitions quite broad. It has created a pervasive potential list of companies subject to the US Securities and Exchange Commission (SEC), including subsidiaries, officers, directors, employees, and agents worldwide. These potential persons are prohibited from giving or receiving bribes, gifts, or "anything of value" to public officials.
The FCPA was proclaimed in 1977 because of the Watergate scandal of the early 1970s. This event had enough consequences for President Nixon to resign from the presidency. In recent years, the SEC has increased its sanctions under FCPA compliance and has imposed a total of $7 billion in criminal sanctions to 116 companies between 2004 and 2014
Violating this law has serious consequences because the SEC may prosecute the individuals and companies involved. Also, there is one more compensation type which is called disgorgement. In this section, we will examine the concept of "disgorgement", which has an important place with the sanctions applied and demands the return of the profits taken from the corruption transaction. Disgorgement requires that profits from corrupt practices be returned to the US treasury. Disgorgement can be compared to the concepts of unjust enrichment and the return of illicit goods with their similarities. This concept was introduced in the Securities Exchange Act 1934 and was applied by the SEC with the aim of recovering unfair gains in irregularities. The SEC was first established in 2004 by ABB Ltd. requested the return of unfair profits based on FCPA law in the investigation of that company. According to FATF data, Siemens refunded 350 million dollars while Och-Ziff refunded 199 million dollars of their profit as disgorgement.
There are several questions that determine the penalty amount:
• What is the company's previous criminal history?
• What is the nature of the abuse? And in which area of the company the abuses happened?
• How long did the abuse last? How much damage has it done to investors?
• How was fraud detected, and by whom?
• How long after the fraud has occurred, effective control put it into practice?
• Has the company fully cooperated with regulatory authorities?
• What are the safeguards to prevent fraud from reoccurring?