• Are universities, like Penn, at risk for FCPA violations?
  • YES

    As Penn’s global initiatives continue to expand the risk of an FCPA violation increases. International research, collaborations, use of 3rd party vendors are just a few of the activities that expose Penn and its employees to possible violations. 

What is FCPA?

The FCPA prohibits the offer, payment or promise of “anything of value” to a foreign official with the corrupt intent of obtaining or retaining business.

  • This violation is not limited only to activities overseas. -- Applies also to actions taken in the U.S. that would further the corruption of a foreign official.
  • An FCPA violation occurs where the inducer offers or promises a payment. -- Whether it is paid is irrelevant. It is the offer or promise that is considered a violation.

To understand FCPA it is important to understand:

  • Who is a Foreign Official?
  • A foreign official is very broadly defined, and NOT limited to:

    • High level officials or ‘federal’ employees
    • Employees of government owned or government controlled entities
    • Persons acting officially on behalf of a government entity
    • Political parties, party officials and candidates
    • Examples:
      • Administrators and faculty of foreign state universities
      • Healthcare professionals at government-owned or controlled hospitals
      • Members of a royal family
      • Government Inspectors/Customs Agents
      • Employees of public international organizations (such as the World Bank)
      • Private persons who are “advisors” or “intermediaries”
  • What is “Anything of Value”?
  • “Anything of value” under the FCPA can fall under the category of monetary payments, preferential treatment or hospitality.

    • Monetary Payments include: Cash, gift vouchers, gift cards, per diems/daily allowances and charitable donations.
    • Preferential treatment can include: Contracting with an entity owned or recommended by a foreign official or their family members; Promises of internships/scholarships to Penn; Promises of admission Penn
    • Hospitality within the university context can include: Travel, meals, entertainment or gifts for friends/relatives of foreign official; Training, scholarships, internships; Conference and event scholarships
  • What Defines a Corrupt Intent?
  • To violate FCPA the payment of "anything of value" must be given with a "corrupt intent".

    • Corrupt intent is defined as when “anything of value” is given with the direct purpose of inducing the recipient to misuse his official position by doing or omitting any act that violates his or her lawful duty in order for the payee to obtain improper advantage.
    • It is important to note that you are liable for a violation if a 3rd party or intermediary working on your behalf makes an improper payment with corrupt intent. This makes it very important to follow steps and understand how to mitigate the risk of using a 3rd party or intermediary.