APPENDIX 1. United States foreign corrupt practices act (nov. 10, 1998)

• Author: Robert W. Tarun
• Pages: 467-484

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

(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—

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(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 general

or specific authorization;

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

financial statements in conformity with generally accepted account-

ing 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 management’s

general or specific authorization; and

(iv) the recorded accountability for assets is compared with the existing

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 coopera-

tion 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 Presi-

dential authority to issue such directives. Each directive 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,

transmit a summary of matters covered by such directives in force at

any time during the previous year to the Permanent Select Committee

on Intelligence of the House of Representatives and the Select Com-

mittee on Intelligence of the Senate.

(4) No criminal liability shall be imposed for failing to comply with the require-

ments of paragraph (2) of this subsection except as provided in paragraph

(5) of this subsection.

(5) No person shall knowingly circumvent or knowingly fail to implement

a system of internal accounting controls or knowingly falsify any book,

record, or account described in paragraph (2).

(6) Where an issuer which has a class of securities registered pursuant to sec-

tion 781 of this title or an issuer which is required to file reports pursuant

to section 78o(d) of this title holds 50 per centum or less of the voting

power with respect to a domestic or foreign firm, the provisions of para-

graph (2) require only that the issuer proceed in good faith to use its influ-

ence, to the extent reasonable under the issuer’s circumstances, to cause

such domestic or foreign firm to devise and maintain a system of internal

accounting controls consistent with paragraph (2). Such circumstances