U.S. Cracks Down on Corporate Bribes

 By DIONNE SEARCEY, Wall Street Journal

The Justice Department is increasing its prosecutions of alleged acts of foreign bribery by U.S. corporations, forcing them to take costly steps to defend against scrutiny.

The crackdown under the Foreign Corrupt Practices Act, or FCPA — a post-Watergate law largely dormant for decades — now extends across five continents and penetrates entire industries, including energy and medical devices. Among the companies currently under Justice Department review: Sun Microsystems Inc. and Royal Dutch Shell PLC, according to the companies’ disclosures.

The law prohibits U.S. companies from paying, or offering to pay, foreign-government officials or employees of state-owned companies to gain a business advantage. It covers nonmonetary gifts or offers in addition to cash payments, and is worded broadly enough that it’s spawning an army of consultants, some of whom once prosecuted bribery cases for the Justice Department, who offer to interpret the gray areas.

“When you have a law that can result in criminal sanctions and jail time and that you can violate without actually realizing you’re violating it, that’s terrifying,” said Alexandra Wrage, president of Trace International Inc., a Washington-based nonprofit specializing in antibribery compliance.

The gray areas of the law sometimes apply to actions — for example, the giving of seasonal gifts — that can be common in some countries. This has left corporations concerned about other practices, such as picking up the cost of trips or meals for foreign officials.

Read the full article at http://online.wsj.com/article/SB124329477230952689.html

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