Last Updated on December 14, 2022 by Anda Malescu
In today’s economy almost no business transaction involves purely domestic services or goods, and it is important for the U.S. businesses and beyond to learn the mechanics of international business transactions and be aware of bribery in international business transactions.
In the United States, if you buy or sell goods and services as a business or individual and the transaction goes wrong for any reason, your relief is well known and relatively easy to accomplish. All you have to do is sue for the money or failure to perform the transaction, receive damages, and collect a court judgement with a writ of attachment which allows seizure of bank accounts and other assets in order to satisfy your court judgment and recover damages. The writ of attachment is issued by a court to a law enforcement officer or sheriff. The procedure to obtain relief can take one to two years and typically requires an attorney. However, even with this, the average businessperson in the U.S. is familiar with the recovery process, the statutes that govern the transaction, and the fact that such remedies exist acts as a deterrent for those that would otherwise breach the transaction. Therefore, if the transaction goes wrong, there are clear criteria set by local laws or courts and both sides are aware of the performance criteria that must be met.
However, none of the requirements for obtaining relief, or the laws or the settled criteria exist in international transactions. The parties can agree in writing to such terms to resolve disputes, but if they do not, the law of the breaching party’s domicile determines what relief, if any, is available. The issue is that large markets such as China, Russia, the Middle East, Eastern Europe, Indonesia and most of Africa do not have effective legal remedies or may not have laws that allow the enforcement of judgements obtained elsewhere.
Even worse, in these countries, the court systems are slow and corrupt. In the United States, the Federal Corrupt Practices Act makes it a crime for U.S. businesses and individuals to bribe any foreign official, but in other countries any business person or local attorney will advise you to pay officials money otherwise you will not get a day on court or you will lose you case regardless how strong your claim is. And if you sue in the United States and get jurisdiction, you have to go to those countries to collect your judgement and end up with the same result – you either bribe the foreign officials and violate Unites States law or do not get relief.
The Federal Corrupt Practices Act imposes civil and criminal liability on a U.S. person who transfers any benefit to a foreign government official to achieve business success. The law applies to American businesses and individuals for their actions outside of the United States even if under the foreign country’s laws such payment is not illegal or unethical. In this respect, the United States is different from many countries and especially from countries that rarely use the courts. In certain countries, if the right local people or family are involved in a transaction as agents or partners then there is little risk of fraud or breach and there is no need to seek redress of injury in the courts.
However, the bribery in international business transactions and the Federal Corrupt Practices Ad makes it almost impossible for U.S. businesses to compete in a foreign country with domestic companies or foreign competitors. Because of the outcry from businesses, United States government is seeking to influence other countries to adopt a similar law, but most nations are unenthusiastic or unresponsive. In these countries, “bribery” is part of the pay given to the underpaid official for performing his or her duties, an unofficial tax to compensate a civil servant and not a bribe.
Contact us or schedule a consultation with your international business attorney in Miami, Florida USA to assist you in cases of bribery in international business transactions and help you navigate the Federal Corrupt Practices Act.
Malescu Law P.A. – Business Lawyers
