Appendix 1 United States Foreign Corrupt Practices Act

• Author: Robert W. Tarun
• Profession: Former Executive Assistant U.S. Attorney in Chicago
• Pages: 703-721

APPENDIX 1

United States Foreign

Corrupt Practices Act

TEXT OF THE FOREIGN CORRUPT PRACTICES ACT

Current through Pub. L. 105-366 (November 10, 1998)

UNITED STATES CODE

TITLE 15. COMMERCE AND TRADE

CHAPTER 2B—SECURITIES EXCHANGES

§ 78M. PERIODICAL AND OTHER REPORTS

(a) Reports by issuer of security; contents

Every issuer of a security registered pursuant to section 781 of this title shall file

with the Commission, in accordance with such rules and regulations as the Com-

mission may prescribe as necessary or appropriate for the proper protection of

investors and to insure fair dealing in the security—

(1) such information and documents (and such copies thereof) as the Com-

mission shall require to keep reasonably current the information and docu-

ments required to be included in or filed with an application or registration

statement filed pursuant to section 781 of this title, except that the Com-

mission may not require the filing of any material contract wholly executed

before July 1, 1962.

(2) such annual reports (and such copies thereof), certified if required by the

rules and regulations of the Commission by independent public accoun-

tants, and such quarterly reports (and such copies thereof), as the Com-

mission may prescribe. Every issuer of a security registered on a national

securities exchange shall also file a duplicate original of such information,

documents, and reports with the exchange.

(b) Form of report; books, records, and internal accounting; directives

(1) The Commission may prescribe, in regard to reports made pursuant to

this chapter, the form or forms in which the required information shall

be set forth, the items or details to be shown in the balance sheet and the

earnings statement, and the methods to be followed in the preparation of

reports, in the appraisal or valuation of assets and liabilities, in the deter-

mination of depreciation and depletion, in the differentiation of recurring

703

tar51556_12_app1_703-722.indd 703 5/4/15 2:23 PM

704 APPENDIX 1

and nonrecurring income, in the differentiation of investment and operat-

ing income, and in the preparation, where the Commission deems it neces-

sary or desirable, of separate and/or consolidated balance sheets or income

accounts of any person directly or indirectly controlling or controlled by

the issuer, or any person under direct or indirect common control with

the issuer; but in the case of the reports of any person whose methods of

accounting are prescribed under the provisions of any law of the United

States, or any rule or regulation thereunder, the rules and regulations of

the Commission with respect to reports shall not be inconsistent with the

requirements imposed by such law or rule or regulation in respect of the

same subject matter (except that such rules and regulations of the Com-

mission may be inconsistent with such requirements to the extent that the

Commission determines that the public interest or the protection of inves-

tors so requires.)

(2) Every issuer which has a class of securities registered pursuant to section

781 of this title and every issuer which is required to file reports pursuant

to section 78o(d) of this title shall—

(A) make and keep books, records, and accounts, which, in reasonable

detail, accurately and fairly reflect the transactions and dispositions of

the assets of the issuer; and

(B) devise and maintain a system of internal accounting controls suffi-

cient to provide reasonable assurances that—

(i) transactions are executed in accordance with management’s gen-

eral or specific authorization;

(ii) transactions are recorded as necessary (I) to permit preparation

of financial statements in conformity with generally accepted

accounting principles or any other criteria applicable to such

statements, and (II) to maintain accountability for assets;

(iii) access to assets is permitted only in accordance with manage-

ment’s general or specific authorization; and

(iv) the recorded accountability for assets is compared with the exist-

ing assets at reasonable intervals and appropriate action is taken

with respect to any differences.

(3) (A) With respect to matters concerning the national security of the United

States, no duty or liability under paragraph (2) of this subsection shall

be imposed upon any person acting in cooperation with the head of any

Federal department or agency responsible for such matters if such act in

cooperation with such head of a department or agency was done upon

the specific, written directive of the head of such department or agency

pursuant to Presidential authority to issue such directives. Each direc-

tive issued under this paragraph shall set forth the specific facts and

circumstances with respect to which the provisions of this paragraph

are to be invoked. Each such directive shall, unless renewed in writing,

expire one year after the date of issuance.

(B) Each head of a Federal department or agency of the United States who

issues such a directive pursuant to this paragraph shall maintain a

complete file of all such directives and shall, on October 1 of each year,

tar51556_12_app1_703-722.indd 704 5/4/15 2:23 PM