Certification in Supplier Diversity Practice Exam

Which act prohibits corrupt payments to foreign officials by U.S. citizens?

1. Trade Agreement Act

2. NAFTA

3. Foreign Corrupt Practices Act

4. GATT

The correct answer is: Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (FCPA) is the correct choice as it specifically addresses and prohibits corrupt payments made to foreign officials by U.S. citizens and businesses. This legislation was enacted in 1977 to combat bribery and maintain the integrity of international business practices. It holds U.S. entities accountable for their actions overseas and aims to prevent the distortion of fair competition resulting from bribery. The FCPA also includes provisions that require companies to maintain accurate records and internal accounting controls, further reinforcing ethical business conduct. By complying with the FCPA, U.S. companies are encouraged to engage in lawful and transparent dealings in global markets, thereby promoting a level playing field. Other options do not address the specific issue of bribery to foreign officials. While trade agreements and international regulations, such as the Trade Agreement Act, NAFTA, and GATT, play important roles in trade relations and economic cooperation, they do not incorporate measures specifically targeting corrupt practices in international transactions like the FCPA does.