William & Mary Business Law Review


Dieter Juedes


Currently many American corporations must pursue and develop international business relationships. For these American firms, the Foreign Corrupt Practices Act (FCPA) is the most important U.S. law governing international commerce. The FCPA prohibits firms from bribing foreign officials for the purpose of obtaining or retaining business in a foreign country. Despite its infrequent use during the last quarter of the twentieth century, Department of Justice (DOJ) and Securities and Exchange Commission (SEC) enforcement actions under the statute have exploded in the last few years. Due to this increase in enforcement and the difficulties in complying with the FCPA, the anti-bribery statute has caused American firms to avoid foreign markets and prospective growth areas, creating a competitive imbalance for U.S. companies.

This Article proposes an adequate procedures defense as the best way to fix this imbalance and allow American corporations to operate efficiently overseas without the cloud of FCPA liability hanging over them. The defense would allow American firms to escape FCPA liability upon showing that they had adequate procedures in place designed to detect and prevent international bribery. To be sure, Congress has recently considered amending the FCPA to add a similar defense, and others have suggested that Congress take such action. However, this piece goes further in so much as it proposes specific statutory language that Congress could use in adopting such a defense and it establishes precise factors to be promulgated by the DOJ and SEC for determining whether a firm’s procedure would be deemed “adequate.” Lastly, the Article details projected outcomes associated with American firms being able to use the adequate procedures defense.