Source: http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=10048
Timestamp: 2019-04-23 12:14:26+00:00

Document:
The Foreign Corrupt Practices Act of 1977 (FCPA) was enacted to prohibit bribery of foreign officials and restore public confidence in the integrity of the American business system. This Notice provides a brief overview of the FCPA and discusses the application of the anti-bribery prohibitions to member firms.
Member firms that are considered to be "issuers" under the FCPA also must comply with the FCPA's accounting provisions, which generally require an "issuer" to make and keep books and records that accurately and fairly reflect the company's transactions and to devise and maintain an adequate system of internal accounting controls.
FINRA advises member firms to review their business practices to ensure they are complying with all of their obligations under the FCPA. A member firm's failure to comply with its FCPA obligations will be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade).
The FCPA was enacted to prohibit bribery of foreign officials and to restore public confidence in the integrity of the American business system. The FCPA includes anti-bribery and accounting provisions. The anti-bribery provisions make it unlawful to bribe foreign officials to obtain or retain business in a foreign country. The accounting provisions generally require each company considered to be an "issuer" under the FCPA to make and keep books and records that accurately and fairly reflect the company's transactions and to devise and maintain an adequate system of internal accounting controls.
D. Affirmative Defenses and Exception for Facilitating Payments for "Routine Governmental Actions"
The FCPA's anti-bribery prohibitions apply to every FINRA member firm (and its officers, directors, employees, agents and any stockholders acting on its behalf). Specifically, FINRA member firms that are considered issuers pursuant to the FCPA must comply with both the FCPA's anti-bribery provisions for issuers and the accounting provisions that are incorporated into the Exchange Act.19 FINRA member firms meeting the definition of "domestic concern" and that are not considered issuers must comply with the FCPA's anti-bribery provisions for domestic concerns. Any FINRA member firms that are foreign broker-dealers registered with the SEC may be considered foreign businesses that must comply with the FCPA anti-bribery provisions for foreign businesses.20 Member firms that are considered either domestic concerns or foreign businesses should be aware that the FCPA's anti-bribery prohibitions apply to them under the statutory terms of those provisions even though they are not incorporated into the Exchange Act, as is the case for members that are issuers.
FINRA advises all member firms to review the FCPA's provisions and their business practices to ensure they are complying with their applicable obligations under the FCPA. A member firm's failure to comply with its FCPA obligations will be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010.
1 See generally 15 U.S.C. §§ 78dd-1 (Prohibited foreign trade practices by issuers) & 78dd-2 (Prohibited foreign trade practices by domestic concerns).
2 15 U.S.C. § 78l.
3 15 U.S.C. § 78o(d). Certain foreign companies are considered "issuers" within the meaning of the FCPA, and therefore subject to the FCPA provisions applicable to issuers. See, e.g., In the Matter of Statoil, Securities Exchange Act Release No. B4B99, 2006 SEC LEXIS 2321, at *3–4 (Oct. 13, 2006) (cease-and-desist order against foreign issuer found to be violating the FCPA's anti-bribery and books and records provisions).
4 See 15 U.S.C. § 78dd-2(h)(1)(B) (defining "domestic concern" to mean "(A) any individual who is a citizen, national, or resident of the United States; and (B) any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States or a territory, possession, or commonwealth of the United States").
5 See generally 15 U.S.C. § 78dd-3 (Prohibited foreign trade practices by persons other than issuers or domestic concerns); see also 15 U.S.C. §§ 78dd-3(f)(1) (the foreign national or business anti-bribery provisions apply to "any natural person other than a national of the United States... or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized underthe law of a foreign nation or a political subdivision thereof") and 78dd-3(a) (requiring compliance while a foreign national or business is "in the territory of the United States").
6 See U.S. Department of Justice, Lay-Person's Guide to FCPA (overview of the FCPA's anti-bribery provisions, including enforcement authority).
7 A foreign national or business (and its officers, directors, employees, agents and any stockholders acting on its behalf) may also violate the FCPA while in the territory of the U.S., irrespective of whether it makes use of the mails or any means or instrumentality of interstate commerce. See 15 U.S.C. § 78dd-3(a). In addition, the FCPA's provisions for issuers and domestic concerns include provisions addressing alternative jurisdiction for acts taken by U.S. issuers and domestic concerns outside of the U.S. irrespective of whether such parties make use of the mails or other means or instrumentality of interstate commerce. See 15 U.S.C. §§ 78dd-1(g) and 78dd-2(i).
8 See Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders In Het Kapitaal Van Saybolt Int'l B. V. v. Schreiber, 327 F.3d 173, 183 (2d Cir. 2003) (referring to the FCPA's legislative history to conclude that the term "corruptly," as used in the FCPA, signifies, in addition to the element of "general intent" present in most criminal statutes, a bad or wrongful purpose and an intent to influence a foreign official to misuse his official position). See also Department of Justice, Lay-Person's Guide to FCPA, supra note 6 (explaining that the person making or authorizing the payment must have a corrupt intent, and the payment must be intended to induce the recipient to misuse his official position to direct business wrongfully to the payor or to any other person).
9 See U.S. v. Kay, 359 F.3d 738, 743 (5th Cir. 2004) (noting that the FCPA criminalizes payments that are intended to: (1) influence a foreign official to act or make a decision in his official capacity; (2) induce such an official to perform or refrain from performing some act in violation of his duty; (3) or secure some wrongful advantage to the payor).
10 See 15 U.S.C. §§ 78dd-1(a), 78dd-2(a), 78dd-3(a).
11 See 15 U.S.C. §§ 78dd-1(c)(1), 78dd-2(c)(1), 78dd-3(c)(1).
12 See 15 U.S.C. §§ 78dd-1(c)(2), 78dd-2(c)(2), 78dd-3(c)(2).
13 See 15 U.S.C. §§ 78dd-1(b), 78dd-2(b), 78dd-3(b).
14 See 15 U.S.C. §§ 78dd-1(f)(3), 78dd-2(h)(4), 78dd-3(f)(4) (defining "routine governmental action").
16 See 15 U.S.C. §§78m(a), (b)(2)(A)–(B), (b)(3)–(7).
17 See Exchange Act Section 13(a).
18 See Exchange Act Section 13(b)(2)(A)-(B).
19 Member firms are reminded that they must comply with FINRA's books and records obligations and other applicable federal securities laws and regulations, including NASD Rule 3110 (Books and Records) and SEA Rules 17a-3 (Records to Be Made By Certain Exchange Members, Brokers, and Dealers) and 17a-4 (Records to be Preserved by Certain Exchange Members, Brokers, and Dealers), irrespective of their compliance obligations underthe FCPA's books and records provision. See also Securities Exchange Act Release No. 63784 (January 27, 2011), 76 FR 5850 (February 2, 2011) (Order approving the adoption of certain paragraphs of NASD Rule 3110 as FINRA Rules in the Consolidated FINRA Rulebook; File No. SR-FINRA-2010-052). FINRA will announce the effective date of the consolidated books and records rules in a Regulatory Notice.
20 A foreign FINRA member firm also may need to consider whether it would be an issuer for purposes of FCPA compliance.

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