Compliance Issues Associated with Foreign Corrupt Practices Act 1977 Report (Assessment)

Introducing Foreign Corrupt Practices Act of 1977 creates substantial grounds for companies and corporations to take preventive measures for avoiding bribery and controlling compliance mechanisms.

However, as practice shows, the awareness of the existing federal law does not always prevent third parties and company’s staff from violating the provision.

Therefore, it is essential for the companies to establish specialized committees that would monitor and enforce the Foreign Corrupt Practices Act (FCPA) to guarantee that all regulations and provisions are taken into consideration.

More importantly, it is also purposeful to examine whether all provisions are followed in compliance with the accepted standards.

While discussing the compliance with (FCPA), specific attention should be given to the analysis of the employed environment, as well as attitude of companies toward the law enforcement.

In this respect, Aguilar (2011) attains much importance to the role of compliance mechanisms and preventive measures in adhering to the act provisions.

In particular, the scholar emphasizes, “given the current anti-corruption enforcement climate, being able to demonstrate that you program is actually being used is even more important than ever” (Aguilar, 2011, p. 11).

In addition, concerns with bribery and violation of the act provision have recently become the focus of attention due to its large-scale impact.

The problem is extremely significant because further complications of the situation may lead to spending financial resources and time on averting legal crimes (Aguilar, 2010).

Thus, the audit committee should be aware that ignorance of the problem could cause further cost consideration. Therefore, paying attention to briberies can abate significant financial expenditures.

Increased awareness of bribery issues provides companies and corporations with establishing ethics and compliance programs that can contribute to FCPA enforcement. This is of particular concern to the risks relating to third-party interventions.

According to Kavanagh (2010), “Mitigating risks by supplies and other third parties can be accomplished by performing effective due diligence, distributing and obtaining certifications to a third-party code of conduct, providing training, and conducting periodic audits of third-party activities” (p. 7).

The scholar also notes that some of the existing supplier codes fail due to the inability to conform to the legal provisions and international standards (Kavanagh, 2010, p. 7).

Nevertheless, serious worries expressed in regard to the act violation prove that committees and companies strive to take an active part preventive measures.

Lipton et al. (2010) focus on similar debates and introduce the circumstances under which companies reconsider procedures and policies directed at risk elimination patterns. They also insist that lack of adherence to the provision is strongly associated with poor corporate culture.

Despite the challenges of compliance mechanism established in various companies, the major stakeholders are concerned with the potential risks and consequences of violating FCPA 1977.

They realize the seriousness of the issue and introduce specific preventive measures, new codes of ethical conduct, and risk assessment procedures that can abate the existing problems.

While evaluating the evidence, it should be stressed that previously established compliance mechanisms were not effective enough for the company to assure security and privacy protection, as well as proper operation activities.

Therefore, a specific officer should be appointed to take control of the compliance with the FCPA. Under these conditions only, it is possible to guarantee that all the provisions are followed as intended. In addition, companies should adopt strong policies that would enhance corporate culture.


Aguilar, M. K. (2010). FCPA compliance: Latest, best practices for boards. Compliance Week, 7(80), 53.

Aguilar, M. K. (2011). Anticorruption trends: What you should expect in 2011. Compliance Week, 8(87), 11.

Kavanagh, S. (2010). Supplier codes can help handle third-party risks. Federal Ethics Report, 17(4), 6.

Lipton, M., Neff, D. A., Brownstein, A. R., Rosenblum, S. A., Emmerich, A. O., & Fain, S. L. (2010). Risk management and the board of directors. Venulex Legal Summaries, 1.

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