The Foreign Corrupt Practices Act (FCPA) prohibits the bribing of foreign officials by public companies. The FCPA applies to conduct anywhere in the world and applies to companies publicly traded in the United States and their officers, directors, employees, agents (such as consultants, distributors, joint-venture partners), and stockholders. Violations of the FCPA can lead to significant monetary penalties, but could also result in criminal penalties and cause a company to be subject to oversight by an independent compliance monitor.

In a recent public filing, Albemarle Corporation disclosed that it had reached an agreement in principle with the Department of Justice (DOJ) and the SEC to pay $218.5 million in aggregate fines, disgorgement, and prejudgment interest to the DOJ and SEC to resolve an investigation into potential improper payments by its third-party sales representatives. This was the proposed settlement for a violation of the FCPA that Albemarle discovered and self-reported to the DOJ and the SEC after five years of investigations and legal fees that likely cost the company millions of more dollars.  And the fine would have likely been even greater if they had not discovered it themselves and reported it to the authorities.

Companies should insure that:

• they maintain a system of internal controls that is likely to identify and prevent any payments that might violate the FCPA; and
• any violation that a company discovers is promptly reported to the DOJ and the SEC.