individual or entity had corrupt intent (Foreign Corrupt Practices Act Anti-Bribery
Provisions Lay-Person’s Guide, 2010).
In the Books and Records Provisions, companies and issuers are mandated to “make
and keep books, records, and accounts, which, in reasonable detail, accurately and fairly
reect the transactions and dispositions of the assets of the issuer” and to “devise and
maintain a system of internal accounting controls sufcient to provide reasonable
assurances [15 U.S. Code §78m(b)(2)(A);15 U.S. Code §78m(b)(2)(B)]”. In essence, the
Books and Records Provisions seeks to prohibit individuals or entities from concealing
illegal bribery through falsifying or misrepresenting their internal books and records.
The FCPA has both civil and criminal penalties. For violations of the anti-bribery
provisions, entities can receive a ne of up to $2m [15 U.S.C. §§78dd-2(g)(1)(A),
78dd-3(e)(1)(A), 78ff(c)(1)(A)]. Individuals can receive a maximum ne of $100,000
and up to ve years of imprisonment [15 U.S.C. §§78dd-2(g)(2)(A), 78dd-3(e)(2)(A),
78ff(c)(2)(A)]. For violations of the accounting provisions, entities can receive a
maximum ne of $25m [15 U.S.C. §78ff(a)]. Individuals can receive a maximum ne
of $5m and imprisonment for up to 20 years [15 U.S.C. §78ff(a)]. Also, the Alternative
Fines Act, 18 U.S.C. §3,571(d), allows courts to impose signicantly higher nes
than those provided by the FCPA when there are aggravating circumstances.
In addition to the penalties listed above, a nding of FCPA liability can also result in
a company being placed on probation, being appointed a compliance monitor, being
ordered to implement enhanced compliance programs, pay disgorgement and or being
subject to forfeiture.
Critical to this paper is a discussion of the history of government agencies promising
benets to companies who voluntarily disclose FCPA misconduct. There were promised
benets to voluntary disclosure from the FCPA’s inception. These promises of a
benet to voluntary disclosure later arose in other forms such as the creation of the
Organizational Sentencing Guidelines created by the Sentencing Reform Act in 1984
(Organizational Sentencing Guidelines, 1984). The promise of mitigation for voluntary
disclosure also comes from several recent sources besides the Sentencing Guidelines and
legislative history of the FCPA such as the Department of Justice (DOJ) (Thompson,
2003), the Deputy Attorney General(Grindler, 2010) and the Assistant Attorney General
of the Criminal Division (Breuer, 2009).
Also important in our discussion here is the Sarbanes–Oxley Act (SOX) of 2002
which increased the maximum nes for false and misleading statements for
corporations; required companies to establish and or maintain internal controls for
nancial reporting and to evaluate those controls periodically; and required that
corporate executives be much more cognizant of potential fraud by establishing or
maintaining ethics programs (15 U.S. Code §78ff(a);Final Rule, 2003). It has been argued
that SOX, DOJ and Securities and Exchange Commission (SEC) trends have resulted in
more voluntary disclosures of FCPA violations (Kress, 2009;Cascini and DelFavero,
2008). Despite this increase in voluntary disclosure and the repeated promises of
mitigating benets to voluntary disclosure, many authors question whether companies
actually see a mitigating benet when voluntarily disclosing (Tillipman, 2008;Low
et al., 2006;Vernazza and Mueller, 2008).
In summary, this section rst outlined the provisions and penalties of the FCPA.
Most important to the current study, this section then identied the various US sources
that promised mitigation for voluntary disclosure and also identied authors who felt