By its definition, the foreign corrupt practices act is a law that was enacted with the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials so as to get an extra hand in obtaining or retaining business. The core of the act is anti-bribery to officials who, in their official capacity, might offer some business opportunities advantages over other business entities. In its essence, the act is mainly centered on American residents and was enacted in 1977 (Clayton, 2011).All these factors and circumstances apply to Zhuku who was a Cleveland resident, having relocated there with his parents during the second world war.Furthermore, he had invested in Ukraine in a business called customs strategy solution.
Considering the two provisions of the act which is anti-bribery and anti-accounting, Zhuku committed two criminal offenses. Let us begin with the anti-bribery provisions of the act. This provision states that it is illegal for any individual, business entity or employee of a business entity based in the United States to provide or offer anything that has a monetary claim to a foreign government with the main intention to influence the decision-making process in order to gain an advantage (Mcgraw & Rufe, 2014). Regardless of the mechanism that is involved in the illegal payment-direct or indirect-, the provision categorizes it as a crime. On this note, we have to look at the business dealings that Zhuku and his counterpart, Hnatyuk, undertook.
Vasyl Feodorovych Mylofienko can be regarded as a very corrupt official. In the meeting that was conducted in his office, he detailed them on the expenses that would be involved in the installation of the telephone line in the country: ten hryvnias and usage rate of 0.5 hryvnias per minute would cost the company an installation fee of 100 hryvnias per line. This might be a good prospect but because of the backlog of orders, the installation would take a while, maybe three years. On the corrupt side, an offer of $300 per line would result in the installation of the lines within a year while $500 would lead to installation within a week’s time.on this note, Hnatyuk offered $500 onetime fee which would subsequently lead to installation within a week.In this respect, the fee offered gave the company an edge over other companies which were not willing to comply with corrupt dealings. Though Hnatyuk can be considered as a third party, the law considers the act as a crime and subject to various departments of justice.
The anti-accounting provision makes it illegal for a company that reports to the SEC to have false or inaccurate books or records or fails to maintain a system of internal accounting controls (Mcgraw & Rufe, 2014). After the corrupt dealings with the corrupt official, Mylofienko, Zhuku asked Hnatyukt to check with the firms CFO in California on how to account for such payments on the company’s books. In essence, the details provided in the accounts books were wrong and as stated, a criminal offense
Clayton, S. (2011, June 01). Top Ten Basics of Foreign Corrupt Practices Act Compliance for the Small Legal Department. Retrieved from http://www.acc.com/legalresources/publications/topten/SLD-FCPA-Compliance.cfm
Mcgraw, S. L., & Rufe, S. E. (2014, March 21). The Foreign Corrupt Practices Act. Retrieved from http://apps.americanbar.org/litigation/committees/insurance/articles/janfeb2014-foreign-corrupt-practices-act.html