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FCPA Challenge

FCPA Challenge

How much do you know about the Foreign Corrupt Practices Act? Let’s find out.

To commemorate the FCPA’s 40th year, FCPA Professor is presenting the FCPA Challenge.

Each Thursday during 2018, a question will be posed and the answer will be below the fold.

This week’s question is: In this 2010 enforcement action, the SEC acknowledged that expatriate workers of a company’s subsidiary in Kazakhstan were the victims of extortionate demands by Kazakhstan officials, specifically that Kazakh immigration prosecutors “threatened to fine, jail or deport the workers if [subsidiary] did not pay cash fines.” “Believing the prosecutor’s threats to be genuine,” the SEC complaint alleged that [subsidiary] employees “used personal funds to pay the prosecutors” and “then obtained reimbursement” from the company. According to the SEC, [the company] violated the FCPA’s books and records and internal control provisions because its subsidiary described the reimbursements as “an advance against bonus” or “payroll advance” in its wire instructions to the bank.

Answer: Natco Group (see here and here).

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