The u. S. Foreign corrupt practices act implications for international distributors

Prohibition on payments “knowing” this will violate FCPA

• Prohibition on payments “knowing” this will violate FCPA
• ▪ FCPA requires actual knowledge of both the act of making payment and circumstances under which payment is made
• ▪ Includes conscious disregard or ‘willful blindness’ to purpose of payment
• Common ‘red flags’ DOJ uses to measure ‘knowledge’
• ▪ Unusually high commission/margins for product in country Special attention in targeted industry or sensitive countries
• ▪ Atypical financial arrangements, in new or existing relationships
• ▪ Relative lack of qualifications/experience in an agent, joint venture partner, consultant measured against success or promises
• ▪ New intermediaries with family connections to ruling families or government officials

• Red Flags