US battles corporate corruption overseas
(AFP): Envelopes stuffed with cash and lavish gifts for foreign officials were once standard practice for companies chasing profits in the red-hot markets of Asia, Africa and Latin America, but now US authorities have cracked down stepping up enforcement of the Foreign Corrupt Practices Act (FCPA), a 1977 law rarely enforced until recently. The surge in FCPA enforcement has led to multimillion-dollar fines on firms that are often not even based in the United States, and it has shed light on how some corporations pursue growth in emerging markets.
On Thursday, Japanese rubber giant Bridgestone agreed to plead guilty to charges that its US employees bribed officials of Mexico's state oil firm Pemex to win deals, sometimes writing "Read and Destroy" on sensitive fax messages about the illicit payments.
And in July, US regulators charged London-based liquor company Diageo with FCPA violations that included taking South Korean officials on a junket to Prague and Budapest in return for favorable tax treatment. Diageo also paid a senior Thai official to lobby for lower sales taxes on its Johnnie Walker whiskey and bribed employees of state-owned liquor stores in India to stock its brands, the US Securities and Exchange Commission (SEC) alleged. Diageo did not admit wrongdoing but paid $16 million to settle the charges.
Category: Finance
