What is the Foreign Corrupt Practices Act (FCPA)?

The Foreign Corrupt Practices Act (FCPA) is a US federal law, enacted in 1977, that makes it a crime to bribe foreign officials to win or keep business. It has two parts: anti-bribery provisions, which apply broadly, and accounting provisions, which apply to companies with securities registered in the US. It has strongly influenced how multinational groups, including many with Indian operations, design their anti-bribery compliance programmes.

What does the FCPA prohibit?

The anti-bribery provisions prohibit corruptly offering, paying, promising or authorising payment of money or "anything of value" to a foreign official to influence an official act, secure an improper advantage or obtain or retain business. They cover three groups:

• Issuers (15 U.S.C. §78dd-1): companies with securities listed in the US or required to file reports with the SEC, including foreign companies with American Depositary Receipts.
• Domestic concerns (§78dd-2): US citizens, residents and businesses.
• Other persons (§78dd-3): foreign companies and individuals who act in furtherance of a bribe while in US territory.

The accounting provisions, under §78m(b)(2)(A) and (B), require issuers to keep accurate books and records in reasonable detail and to maintain a system of internal accounting controls. These are often the basis of enforcement against companies even where bribery itself is not charged.

Enforcement is shared: the Department of Justice (DOJ) brings criminal cases and civil cases against domestic concerns, and the Securities and Exchange Commission (SEC) brings civil cases against issuers.

What changed in 2025?

On 10 February 2025, Executive Order 14209 directed the US Attorney General to pause new FCPA investigations and enforcement actions, review existing ones and issue updated guidelines. On 9 June 2025 the Deputy Attorney General issued Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act, ending the pause. Under the guidelines:

• new FCPA investigations need approval from the Assistant Attorney General for the Criminal Division or higher;
• prosecutors should focus on individual wrongdoers and weigh collateral consequences for companies;
• routine, low-value courtesies are not a priority;
• priority goes to conduct linked to cartels or transnational criminal organisations, conduct that deprives US companies of fair competition, threats to national security, and serious bribery with strong indicia of corrupt intent.

The statute was not amended, past conduct can still be examined, and future administrations may enforce it differently, so companies should not treat the 2025 changes as a safe harbour.

How does the FCPA reach Indian businesses?

Indian exposure arises when an Indian company is a US issuer, when it is a subsidiary or joint-venture partner of a US company, when payments pass through US banks or systems, or when employees or agents act while in the US. Indian distributors, agents and consultants of US multinationals are also scrutinised as third parties. Our article on when the FCPA and UK Bribery Act reach Indian companies explains these routes in more detail.

What are the red flags in an FCPA context?

• agents or consultants introduced by government officials;
• commissions far above market rates or paid offshore;
• "facilitation" or "liaison" expenses with poor documentation;
• hospitality for officials, especially travel unrelated to a business purpose;
• customers that are state-owned enterprises, whose employees count as foreign officials;
• kickback arrangements disguised as discounts or rebates;
• counterparties with politically exposed person links that were not disclosed.

How is the FCPA different from Indian and UK law?

India's Prevention of Corruption Act targets bribery of Indian public servants, while the FCPA targets bribery of non-US officials. The UK Bribery Act is wider than the FCPA: it covers private-sector bribery and has a strict-liability corporate offence with an adequate procedures defence. The FCPA's accounting provisions have no direct equivalent in either law, which is why integrity due diligence on third parties and sound internal controls are central to FCPA risk management.

Our anti-bribery and corruption service covers third-party risk reviews and investigations into suspect payments for groups with US exposure.