Why Every EB-5
Issuer Needs an
FCPA Compliance
Program
by Charles Kaufman & Jor Law
The Foreign Corrupt Practices Act (FCPA)
forbids U.S. companies from using bribery to
further their business interests abroad. When
participants in EB-5 projects raise money
abroad, if they or their agents make any kind
of corrupting payment or gift to any person
who fits a broad definition of “foreign official,”
they may face severe penalties – including fines
and imprisonment. Because EB-5 offering
activities carry a risk of FCPA violation, and the
severity of punishment for the company and
its officers, directors and managers depends in
part on whether the company had an effective
program in place to comply with the FCPA, all
EB‑5 issuers should take the time to educate
themselves about FCPA and implement an
effective compliance plan.
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Background
Most developed countries have long outlawed bribery within
their own borders, but few, if any, had laws preventing their
citizens from paying bribes when they went abroad. The United
States broke from this legal tradition and adopted the FCPA in
1977 in reaction to revelations of widespread bribery of foreign
officials by U.S.-based corporations, including bribery of a
sitting Japanese Prime Minister by Lockheed Corporation. At
first, many within and without the United States saw the law as a
naïve effort that would benefit only competitors from countries
less shy about dirtying their hands to gain global economic
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