In the mid 1970s, the Securities and Exchange Commission conducted numerous investigations of the way American firms did business in foreign countries. As a result of those investigations, more than 400 American companies admitted to making questionable or illegal payments, totaling more than $300 million, to various foreign government officials.[FOOTNOTE 1] The Foreign Corrupt Practices Act of 1977 aimed to reduce that way of doing business abroad. The FCPA both prohibits bribery of foreign officials and requires companies to accurately record and account for financial transactions.
Since 1977, the U.S. and other governments have taken additional steps toward collaboration in limiting foreign corrupt activities by ratifying the Organization of Economic Cooperation and Development Anti-Bribery Convention. The Anti-Bribery Convention has contributed to an increased global awareness of corruption in business transactions and has led to an overall increase in enforcement worldwide. The OECD has played an important role in identifying “high risk” countries that are characterized by weak or non-existent governments [FOOTNOTE 2] that naturally lend themselves to cultures of corruption.
