Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What are the primary provisions of the FCPA enacted in 1977?

1. Reporting requirements for financial institutions

2. Anti-bribery provisions for companies

3. Regulation of international commodity exchanges

4. Licensing requirements for commodity brokers

The correct answer is: Anti-bribery provisions for companies

The primary provisions of the Foreign Corrupt Practices Act (FCPA), enacted in 1977, center around anti-bribery measures aimed at preventing U.S. companies from engaging in corrupt practices when doing business abroad. These provisions make it illegal for U.S. persons and companies to offer, pay, or promise anything of value to foreign officials in order to influence their decisions or gain business advantages. This anti-bribery facet of the FCPA is designed to foster fair competition and maintain the integrity of the international market by discouraging corrupt practices that are detrimental to both ethical business conduct and the economies in which companies operate. In contrast, the other options highlight aspects that are not the primary focus of the FCPA. While there are reporting requirements for financial institutions in various regulations, they are not specifically central to the FCPA. The act also does not regulate international commodity exchanges nor set licensing requirements for commodity brokers, both of which pertain to different areas of law and regulatory practices. Understanding the FCPA's emphasis on anti-bribery helps clarify its significance in promoting transparency and ethical business practices on a global scale.