The Foreign Corrupt Practices Act, or FCPA, is an act passed in 1977 to control the dealings of US persons or entities with foreign officials. The act makes it illegal for any U.S. party to pay, directly or indirectly, money or anything else of value, to a foreign official in exchange for obtaining or retaining business (FCPA Enforcement). In addition to this, any company trading securities in the United States is required to file a periodic report with the Securities and Exchange Commission to record all trading transactions in order to maintain effective internal controls (Department of Justice). In the United States, most contracts are entered into privately allowing entities to control their business effectively preventing the problem that the FCPA seeks to solve. No party will accept a bribe that is not for their benefit, and most entities do not have jurisdiction over the contracts of others to assume any control. In many other countries, however, it is exactly the opposite. It is the government that controls large construction and manufacturing contracts. For this reason, many entities in these countries pay or bribe officials to obtain business contracts in their favor. Since this type of policy also applies to foreign entities operating in these countries, many U.S. companies would follow this practice even though this was not the norm in the United States (Miller & Hollowell, 2011, p. 22). This is why the FCPA was created. It allowed the United States to prevent entities from using foreign business as a way to pay for their own profitable contracts, which they could not do in the United States. It also prevents foreign entities from having this advantage if they do business in the United States. The r...... middle of paper ...... October 15, 2011, from FindLaw: http://library.findlaw.com /1997/Jan/1/126234.htmlMiller, R.L. and Hollowell, W.E. ( 2011). Commercial law: text and exercises 6th edition. In R. L. Miller and W. E. Hollowell, Business Law: Text and Exercises 6th edition (pp. 22-23). Mason: South-Western Cengage Learning.Smith, Gambrell& Russell, LLP. (n.d.). The Foreign Corrupt Practices Act. Retrieved September 15, 2011, from Smith, Gambrell& Russell, LLP: http://www.sgrlaw.com/resources/trust_the_leaders/leaders_issues/ttl15/836/Stackhouse, D. (1993, April 21). Retrieved September 13, 2011, from IceMiller LLP: http://www.icemiller.com/publication_detail/id/45/index.aspxSteskal, C.J. (2008, January 29). United States: The Foreign Corrupt Practices Act: the next corporate scandal? Retrieved September 16, 2011, from mondaq: http://www.mondaq.com/unitedstates/article.asp?articleid=56616