Financial Crime World

FCPA Guidelines in Thailand: What Americans Need to Know

As American businesses expand their operations into Thailand, they must navigate a complex web of laws that govern international business practices. One crucial law to consider is the Foreign Corrupt Practices Act (FCPA), a U.S. federal statute that penalizes bribery by American businesspeople operating outside the United States.

Understanding the FCPA

The FCPA contains two sections:

Accounting Provisions

  • Require companies registered with the Securities and Exchange Commission (SEC) to maintain accurate books, records, and accounting practices.
  • Ensure transparency and compliance in financial reporting.

Anti-Bribery Provisions

  • Prohibit any company or individual from giving or promising anything of value to a foreign government official for the purpose of doing business or gaining an improper advantage.
  • Make exceptions for payments made to secure or facilitate routine governmental actions, such as obtaining permits, licenses, or other official documents.

Key Considerations in Thailand

The distinction between “offering a gift” and “bribe” can be ambiguous in Thailand’s culture of corruption. American businesses must understand how the scope of the anti-bribery prohibition could apply here.

Routine Governmental Action

  • Engaging in direct negotiations with a government procurement officer before or during the bidding process may be considered an offense under the FCPA.
  • Colluding with other suppliers to fix prices could also fall under this prohibition.

Lawful Under Foreign Law

  • An affirmative defense to a charge of violating anti-bribery provisions is that the alleged act was lawful under the written laws and regulations of the foreign official’s country.
  • Thailand’s procurement regulations require transparency and open competition in the bidding process, but also allow for exceptions as designated in the regulations.

Additional Guidance

The FCPA provides additional guidance on payments related to:

Demonstrating, Explaining, or Promoting a Product or Service

  • Payments related to demonstrating, explaining, or promoting a product or service are allowed under the FCPA.
  • Transparency and compliance in financial reporting are essential.

Performance of a Public Contract

  • Payments related to the performance of a public contract are also allowed under the FCPA.
  • Ensuring transparency and compliance in financial reporting is crucial.

Final Comments

The FCPA provides critical guidance for American businesses operating in Thailand. To avoid potential offenses, companies must carefully consider these guidelines and ensure compliance with international business practices.

Siam Legal is an international law firm with experienced lawyers and attorneys both in Thailand law and international law. The firm offers comprehensive legal services in Thailand, including corporate law, company registration & BOI, family law, property law, and private investigation.