This article aims at dealing with the applicability of Foreign Corrupt Practices Act in the foreign investment scenario in Asia.  I will further concentrate on the nature of compliances that a corporate ought to observe, be it under FCPA or under the domestic laws of a particular country, and the reason and wisdom to do so.

All around the world, in every country, the goal of business is not to serve the public; it is to make money.  When that drive for profit produces corrupt behaviour and erupts in major scandals, it can have a demoralizing effect.  The early twenty-first century scandals in America over revelation of business fraud followed by indictments and punishment included corporations such as WorldCom, Qwest, Tyco, Adelphia Communications, ImClone and Global Crossing.  In 2000, Enron’s reported revenues made it the seventh largest company in America.  Questionable methods and strategy and misrepresentations to the public of their financial status were used to expand this natural gas pipeline company.  It exploded in growth until 2001, when the Securities and Exchange Commission (SEC) investigated and Enron admitted that it had been overstating earnings by nearly $600 million since 1997.

The American response to the corporate scandals and corporate failures of the past had been to pass laws that addressed the problems and that strengthened regulations.  The FCPA emerged from SEC investigations in the mid-1970′s that led to over 400 US companies admitting having made questionable or illegal payments to foreign governments and officials.  The Act was enacted to bring a halt to the bribery of foreign officials and to restore public confidence.  Asia has forever been a lucrative market for the traders from the western hemisphere.  With the attractive opportunities that the Asian markets had to offer, came the urge to resort to any and every means to get that opportunity, and thereafter maximizing the profits.