Dissertation
Dissertation > Political, legal > Legal

The Revelation U.S. Foreign Corrupt Practices Act Providing to the Compliance Review of Chinese Enterprises

Author JiangZuo
Tutor HeMin
School East China University of Political Science
Course Civil and Commercial Law
Keywords FCPA Anti - Commercial Bribery Chinese Enterprises Compliance Review
CLC D971.2
Type Master's thesis
Year 2010
Downloads 124
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The recent bribery case of Lucent Technologies Inc. and the resignation of Zhang Eng-Zhao revealed the latent rules in business environment of China, which also made the U.S. Foreign Corrupt Practices Act known. The Foreign Corrupt Practices Act, known as FCPA, was published in 1977, and amended in 1988 and in 1998. The focus of the Act is forbidding individuals and business paying anything of value directly or indirectly to any foreign official, government employee, officer of a public international organization, foreign political party or political candidate, or any person acting on behalf of any of these entities.The FCPA is mainly comprised of two parts of provisions: the Anti-bribery Provisions and the Record-keeping and Accounting Provisions. The anti-bribery provisions of the FCPA make it illegal for any issuers or any domestic concerns, or for any officer, director, employee, or agent of such issuer or domestic concern or any stockholder thereof acting on behalf of such issuer or domestic concern,?to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to, any foreign official, any foreign political party or official thereof or any candidate for foreign political office, for the purposes of obtaining or retaining business, or securing any improper advantage. The record-keeping and accounting provisions requires that all the issuers make and keep books, records and accounts accurately and create a system of internal accounting controls to reflect the transaction and dispositions of the assets of the issuer, which shall be able to prohibit the improper payments.Compliance review, conducted by compliance departments or compliance functions to control the compliance risks, is a system containing the following parts: identification, assessment, prevention, report, detection and review of the compliance risks. Chinese enterprises are not very familiar with the conception of“compliance”so that the enterprises set up compliance functions just because of the regulatory requirements. The enterprises usually pay more attention to the legal settlement of the incidents, other than the prevention measures before the incidents occurring. In additional to the existing law and regulation, Chinese government will implement anti-commercial corrupt law soon because China signed the United Nations Convention Against Corruption. Secondly, with the globalization in the economic world, chinese enterprises have taken much more part into the international trade and business activities after China’s joining WTO. More and more Chinese enterprises want to issue their stock in the foreign security markets and want to take over the oversea business so that they will be exposed in the risk of incompliance with the anti-corruption laws and regulations of variations of countries.Chinese enterprises do not have much experience of how to build an effective compliance review program so that the study of the relative foreign laws and regulations such as FCPA and the best practices of the industry are very necessary. To have an effective compliance review program, an enterprise must have the support and the engagement from the high-level management of the organization, as well as the sufficient resources of personnel and fund. And the enterprise shall establish a series of standards and procedures of compliance review, which is also an operational working process to be followed step by step. The enterprises shall also take some steps to have a mechanism of confidential whistle-blowing and appropriate disciplinary measures for failing to follow the compliance review program, as supporting procedures to the compliance review program.

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