U.S. probes Uber for possible bribery law violations

Note that the facilitation payment exception to the FCPA is (i) extremely narrow; (ii) still requires the company to accurately report the payment as a facilitation payment, which Uber probably didn't do: https://globalanticorruptionblog.com/2014/06/17/the-fcpas-fa...

> On top of that, even if a grease payment is exempt from the FCPA’s anti-bribery provisions, if that payment were not accurately recorded as a facilitation payment in the company’s books, then the company would be in violation of the FCPA’s accounting provisions–and if the mischaracterization in the books was “willful and knowing,” this would also be a criminal violation. On the other hand, if the company were to accurately record facilitation payments in its books, it would be officially confessing violations of the host country’s anti-bribery laws, as well as the laws of other countries that might have jurisdiction over the transaction (such as the UK) that lack any exception for facilitation payments in their foreign bribery laws. It is perhaps for this reason that I’m not aware of any company that today formally records facilitation bribes accurately in its books.

They've crossed a number of bright lines and they're still here. I don't mean this in a good way.

Aren't there some rumors that the Trump administration is weakening enforcement of the FCPA?

As you point out for a business the FCPA is both elementary, serious, and enitrely possible to comply with.

That said the "jail time" provision is a joke. Going from memory no corporate officer has ever gone to prison for an FCPA violation. A handful have been hung out to pay nominal fines. The vast majority of personal culpability (when it does happen) are settled by the company.

Edit: yes, some employees have gone to jail. But not officers that I can recall.

An off-topic gotcha can be illegally importing things into overseas offices --those momentary expediencies can result in long term bans or oversight from those governments when trying to get other things in legally.

Always follow your legal dept guidance. No matter how trivial it may seem (it's just for the expo, client demo, etc).

If there were any red flags that you could have known about, yes. Not knowing does not grant you immunity under FCPA.

Possibly. Most FCPA enforcement actions involve third parties. The FCPA expressly prohibits corrupt payments made through third parties or intermediaries. The fact that a bribe is paid by a third party does not eliminate the potential for criminal or civil FCPA liability. The FCPA expressly states that a company or individual may be held directly liable for bribes paid by a third party if the principal has knowledge of the third party's misconduct. It is unlawful to make a payment to a third party, while “knowing” that all or a portion of the payment will go directly or indirectly to a foreign official. The term “knowing” includes “conscious disregard” and “deliberate ignorance”. Intermediaries may include joint venture partners or agents. Third parties and intermediaries themselves are also liable for FCPA violations.*

*: https://www.transparency.org.uk/wp-content/plugins/download-...

> Did they foresee this probe coming or is this something that they will have to scramble to react to?

It depends entirely on whether or not this was a top-down decision. The most efficiently run companies consider the likely returns on illegal activity and the potential ramifications of getting caught. If the math works out in favor of the illegal behavior, they'll go ahead and do that. Depending on the nature of the illegal behavior, they may save for a fund that would pay for costs of being caught.

The math isn't just about money in vs money out, either. The best consider the effect on the brand, cost of a PR campaign, potential legal changes, lobbying fees(to make currently illegal behavior legal), the likelihood of getting caught in the first place, and a lot of other stuff that I'm probably not thinking about.

It's not right, but when shareholders demand exponential growth, the owners and managers will do what is necessary to make that happen.

Is that considered bribery in china? Is it illegal?

Under what circumstances would different such medium-to-large sharing companies have to do this?

Well, most 100+ employee companies are probably older than the law. Other than that, your attitude is of the rather useless variety: it's easy to disprove, as just a single counter-example is sufficient.

I'm actually not even sure if the majority of US companies does /any/ business in foreign countries. Even among those 100+ sized, an awful lot of them are hospitals, regional cleaning companies etc that couldn't bribe any foreigners even if they wanted.

(edit: just noticed that I had missed the "sharing economy" qualification. You may be right in that context.)

Then, to take an example closer to this audience, there are all those that sell into foreign markets but have basically no contact with those markets other than what's mediated by their payment processor. Think of some medium-sized ISV: under which circumstances would they even get into a situation where bribery was an option?

Is corruption something that actually occurs in the US–to such a degree that a significant portion of white-collar employees know how it works? Because I've never seen it, and wouldn't know were to start.

The FCPA is actually among the rather great achievements of US diplomacy. Until its enactment, my wonderfully law-abiding home country of Germany still allowed foreign bribes to be tax-deducted. It wasn't that bribery itself was tolerated domestically–far from it. But they considered it a matter of pragmatism to adjust to lower moral standards in other countries. Of course such rules only perpetuated those "lower moral standards", and German businesses never were the powerless victims they claimed to be.

When the US started to enforce rules against foreign corruption against domestic companies, these had a strong incentive to lobby for similar standards abroad, and for the US to use their unparalleled power to directly enforce such rules against foreign companies as well. The result was the almost complete elimination of corruption among a segment of the economy, namely large internationals, and specifically their b2g business.

They care because it becomes a political disaster for America when an American corporation is enabling some kind of bribery scandal.

This could easily lead to american investment abroad being blocked, and generally tarnishing the image of America on the international stage.

A lot of the American world order is based upon the perception that America are "good guys", allowing corruption to run rampant is very counter to that.

They care because if I expand to the foreign market rather than in the US market because I can bribe my way to advantages, that's competing on very unfair terms with competitors that stay in the US.

That and the fact that OECD has a convention against bribery, so if you want to trade in the largest trading block in the world on good terms, you better help enforce the rules.

That is true in some foreign countries, but probably not as many as one may think. Uber ran into a lot of trouble in countries such as France and Germany, where attempts of bribery are probably doomed–if only because whoever you're trying to bribe is quite likely not to even understand what you're trying to do.

That doesn't mean you couldn't find corrupt people in those countries. But the sort of regulatory trouble Uber was having would require bribing group of local officials all over those countries. And only a single one of them would have to go public to not only ruin your chances in that country, but also get you into trouble in the US.