In recent years, the books and records provision of the Foreign Corrupt Practices Act (FCPA) has taken on new life, as both the Department of Justice and the Securities and Exchange Commission (SEC) have announced their intention to bring more charges, especially against individuals, for violations of this section of the FCPA.1 A review of recent enforcement actions reveals that the Justice Department and the SEC consider the books and records requirements violated whenever corrupt payments are made to a foreign official and recorded in a corporation’s books as anything other than a “bribe,” including, but not limited to, such things as commissions, social payments, or after sales service fees.2 This article proposes that the books and records provision is, in fact, narrower than the Justice Department and the SEC interpretations suggest, and argues that both agencies may be using the provision to punish behavior falling outside the FCPA’s reach.
It has become fairly common practice for FCPA defendants to resolve enforcement actions out of court. Consequently, there has been little judicial interpretation of the books and records provision, and thus, it can be challenging for a defendant to refute the government’s legal assertions. This article attempts to sketch the limitations of the books and records provision in the hopes of providing helpful guidance to both corporate and individual defendants.
