The US Foreign Corrupt Practices Act

The US Foreign Corrupt Practices Act

April 01, 2013 | By Keith Martin in Washington, DC

The US Foreign Corrupt Practices Act applies to three Hungarian executives of Magyar Telekom PLC, a federal district court judge in New York ruled in February.

The executives are accused of paying bribes to Macedonian officials to limit a law allowing a competitor into the Macedonian market. American depositary receipts in Magyar Telekom trade on the New York Stock Exchange. The executives were accused by the US Securities and Exchange Commission of misleading US investors when they certified to the company’s auditors that the company’s financial statements were complete and accurate and they were not aware of any violations of law. The certifications were later filed with the SEC.

The executives moved to dismiss the case on grounds that the US courts have no jurisdiction over the alleged crime since it took place in Macedonia by foreign nationals and it occurred more than five years ago. The US judge declined to dismiss. He said the statute of limitations on such crimes does not run while the perpetrators are outside the United States. The case is SEC v. Straub.

The same court said it had no jurisdiction over a German citizen working for Siemens who allegedly encouraged others to bribe Argentine government officials. The particular Siemens employee was not involved himself in paying or authorizing the bribes or in any false filings with the SEC.

The second case is SEC v. Sharef.