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June 14, 2011

House Hearing: An Important Step Toward Fixing the FCPA

Today’s House Judiciary Crime Subcommittee hearing to examine the Foreign Corrupt Practices Act (FCPA) was an important step toward modernizing the Act, a 34-year-old law that has become a stumbling block for America’s ability to compete in today’s global economy.  The FCPA, though well-intentioned, is a relic of a time before globalization transformed the U.S. economy and, until updated, it will continue to hurt U.S. businesses.

Former U.S. Attorney General Michael Mukasey testified on behalf of the U.S. Chamber Institute for Legal Reform and highlighted the need to provide clarity and guidance to the business community.  “The FCPA, as it is currently written and enforced, leaves corporations vulnerable to civil and criminal penalties for a wide variety of conduct that is in many cases beyond their control or even their knowledge,” Mukasey said.

He went on to outline six FCPA reforms that will enable businesses to have a clearer understanding of what is and is not a violation of the FCPA.  Among these reforms were adding a compliance defense, clearly defining a ‘foreign official’ under the statute, limiting a company’s criminal liability for prior acts of a company it has acquired, and adding a ‘willfulness’ requirement for corporate criminal liability.

In an economy where nearly one-third of U.S. business revenue comes from foreign trade, Congress should advance FCPA reforms that will provide clarity and guidance to the business community while continuing to bar unethical practices that undermine our free market system.  This will help grow jobs during a time when millions of U.S. citizens are looking for one.

At the conclusion of the hearing, Crime Subcommittee Chairman James Sensenbrenner (R-WI) said: “There is no question in my mind that we have to bring this law up to date.”  He then told the witness from the Department of Justice:  “We will be drafting the bill and I’ll see you later…get the message sir and tell that to the AG.”

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