Prevention of Overseas Bribery
GI&T Law Office
Q1 What is the FCPA?
The FCPA is the U.S. Foreign Corrupt Practices Act. It is a U.S. federal law that prohibits and punishes the bribery of foreign public officials. Like the UK’s Bribery Act 2010 (UKBA), discussed later, and Japan’s Unfair Competition Prevention Act, the FCPA is an extraterritorial law that applies to bribery committed overseas, separately from the local criminal law of the country in question.
The FCPA was enacted in 1977 following the Watergate scandal and revelations, including those arising from the Lockheed scandal, that U.S. companies were engaging in bribery and corrupt financial practices in international transactions in the early and mid-1970s, causing significant social and political concerns.
Nonetheless, the FCPA was seldom enforced for several decades, with many people taking the view that, when it came to bribery overseas, one should simply "do as the locals do."
Enforcement of the FCPA suddenly became active around 2004. There are various theories why FCPA enforcement intensified at this time. The factors most often cited are that: (1) in the fight against terrorism following 9/11, attention turned to bribery as an important source of funding for authoritarian regimes; and (2) the U.S. Department of Justice (DOJ) established an enforcement approach based on entering into deferred prosecution agreements (DPAs) with companies, under which the DOJ filed criminal charges against companies but agreed to pause prosecution if the companies admitted wrongdoing, paid financial penalties, and upgraded compliance programs.
Q2 What is the trend in FCPA enforcement?
For a number of years after 2004, FCPA enforcement appeared to grow stricter. Below are the Top 10 FCPA enforcement actions as of March 2021. As shown in the table below, there were an increasing number of cases involving penalties exceeding USD 1 billion (JPY 159,800,000,000 as of September 1, 2026).
More recently, since 2025 under the current U.S. presidential administration, FCPA enforcement against companies has declined significantly, although the DOJ has continued to pursue cases involving individual bribery and money laundering.
Q3 Can the FCPA be enforced against Japanese companies?
Yes. If a Japanese company pays a bribe overseas, there is a risk that the FCPA will apply. The FCPA has an extremely broad scope of application and has been enforced against a total of seven Japanese companies as of March 2021, including manufacturers, trading companies, and engineering firms. The highest penalty in this respect was for USD 280 million imposed on a Japanese manufacturer in 2018.
The scope of the FCPA’s applicability falls into the following four categories:
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"Issuer" means a company listed in the United States. Among Japanese companies, this includes companies listed on a U.S. stock exchange or companies that have raised capital in the U.S. and continue to make ongoing disclosures there. Many Japanese companies have shares traded over the counter (OTC) in the U.S. through ADRs (American Depositary Receipts), but such companies do not qualify as "Issuers."
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As for "Domestic Concern," this category could include a U.S. subsidiary of a Japanese company that engaged in bribery outside the United States, for example, paying a bribe to a public official in South America.
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"Foreign Person Acting within the U.S." applies even where only part of the act was performed within the United States. Typical examples falling within this scope include sending an email to a person connected with the U.S. or remitting bribe funds in U.S. dollars.
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A typical example of this category would be a joint venture with a U.S. company that pays a bribe.
Q4 The FCPA is said to consist of two types of provisions—the anti-bribery provisions and the accounting/internal-controls provisions. What do these terms mean?
The anti-bribery provisions prohibit the payment, offer, promise, or authorization of payment of a bribe to a foreign public official.
The accounting/internal-controls provisions require companies to maintain accurate and fair books of account and to establish internal controls. These provisions address the circumstance that, where a company pays a bribe, it will almost never record this payment as a "bribe" in its financial books. Such payments are therefore typically accompanied by accounting fraud.
These accounting/internal-controls provisions are a high-risk area of the law because they may apply even where it is not proven that a bribe was actually paid. A typical example would be where a company paid a fee to a consultant to help win business or obtain a permit or license but failed to adequately oversee that consultant.
Q5 What is the UKBA?
The UKBA is the UK Bribery Act 2010, the UK law that prohibits and punishes bribery. It is a relatively new law; it was enacted on April 8, 2010 and became effective from July 1, 2011.
The UKBA has two distinctive features:
1. There is no exemption for facilitation payments, that is, small bribes intended to expedite routine official action.
By contrast, the FCPA expressly provides that small payments made in connection with a routine governmental action are not subject to punishment. The UKBA contains no such exception.
2. Under the UKBA, bribery of private individuals, and not only of public officials, is also subject to punishment.
As noted, the FCPA targets bribery of (foreign) public officials, and bribery offenses in Japan similarly relate primarily to relationships involving public officials. The UKBA, however, also punishes bribery in relationships involving private individuals. An example would be a company paying a bribe to a representative of the U.S. credit rating agency Standard & Poor’s in order to have its credit rating improved.
Q6 What is the scope of application of the UKBA?
The UKBA’s scope of application is wide ranging, but the applicable category that Japanese companies particularly need to be aware of is "a company that carries on business in the UK." Under this category, regardless of where the company is headquartered or where wrongful conduct took place, the UKBA applies if "a company that carries on business in the UK" fails to prevent the payment of a bribe.
Accordingly, for international companies, including Japanese companies, which carry on business in the UK, the UKBA can pose a significant risk.
Q7 Does Japan also have a law that punishes the bribery of foreign public officials?
Yes, such bribery is punished under the offense of bribing a foreign public official, provided for in Article 18 of the Unfair Competition Prevention Act. This provision was added by a 1998 amendment to the Unfair Competition Prevention Act, following Japan’s adoption—as a member country—of the OECD’s Convention on Combating Bribery of Foreign Public Officials, and it took effect in February 1999.
Article 18’s scope of application covers: (1) cases where a Japanese national bribes a foreign public official overseas (under the principle of active personality); and (2) cases where all or part of the act was performed in Japan (under the principle of territoriality). For example, in a case where a local employee at an overseas location pays a bribe to a local public official, the principle of active personality would apply if a Japanese expatriate employee approved the payment. The principle of territoriality also would apply if the Japan head office approved of the payment.
Q8 What is the enforcement trend under Article 18 of the Unfair Competition Prevention Act?
The main cases that have been enforced are limited to Kyudenko, PCI, Futaba, Japan Transportation Consultants, Mitsubishi Hitachi Power Systems, Tenma and Taisei. It cannot necessarily be said that Japanese authorities are enforcing this provision proactively, which is thought to be due to the limited investigative capacity of Japanese authorities overseas.
Unlike the FCPA, when Article 18 is enforced, it tends to be reported prominently by the Japanese media, so the risk of reputational damage is high.
Q9 Why is compliance important for preventing bribery?
An anti-bribery compliance program not only deters bribery, but under the laws of various countries the existence of such a program can also result in a mitigated or reduced criminal sentence.
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FCPA
The U.S. Federal Sentencing Guidelines expressly provide that the existence of a compliance program is taken into account, and whether enforcement action is taken at all can depend on the existence and content of the compliance program. The U.S. DOJ has also published guidelines on evaluating compliance programs, as referenced immediately below.
Evaluation of Corporate Compliance Programs (U.S. Department of Justice) -
UKBA
Under the UKBA, the existence of an effective compliance program is expressly provided as a basis for exemption from punishment. Specifically, the law provides that a company is exempted from corporate liability, even if a bribery incident occurs, if the company had "Adequate Procedures" (i.e., an appropriate compliance program) in place. The UK Ministry of Justice published guidance in March 2011 explaining this in specific detail.
The UK Bribery Act 2010 (justice.gov.uk) -
Article 18 of the Unfair Competition Prevention Act
The Ministry of Economy, Trade and Industry (METI) has published Guidelines for the Prevention of Bribery of Foreign Public Officials. Chapter 2 of these guidelines, "On Systems for Preventing Bribery of Foreign Public Officials within Companies," contains specific provisions on building a compliance framework. It is expressly stated that building a compliance framework is necessary in order for directors to fulfill their duty of due care. The guidelines further note that, based on the so-called "presumption of corporate negligence" theory, an effective compliance framework may support a finding that the corporation was not negligent, potentially allowing it to avoid criminal liability.
Guidelines for the Prevention of Bribery of Foreign Public Officials (METI)
Q10 How should a company build a compliance framework to prevent bribery?
Anti-bribery compliance can generally be broken down into the following elements:
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Commitment and action by top management
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Adoption of a risk-based approach
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Formulation of basic policies and internal rules
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Development of an organizational structure
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Management of third parties
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Training / education
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Monitoring and continuous improvement
For specific guidance on these elements, the "Guidance (Handbook) for the Prevention of Overseas Bribery" published by the Japan Federation of Bar Associations is a useful reference. Japan Federation of Bar Associations – Guidance (Handbook) for the Prevention of Overseas Bribery (https://www.nichibenren.or.jp/en/document/opinionpapers/20160715.html)
An increasing number of Japanese companies have put anti-bribery rules in place, but only a minority have introduced an effective compliance program and there is still a long way to go.
Please feel free to contact GI&T Law Office regarding the specific implementation of an anti-bribery program.
Q11 Looking at the reality in Southeast Asia and China, isn’t "bribery prevention" just empty rhetoric from the head office? If a bribe is actually demanded, how should we respond?
Anti-bribery compliance is by no means merely a matter of form. It must provide real solutions for people actually doing business on the ground overseas.
At GI&T Law Office, we provide services that go into the practical question of how to do business in places where corruption is rampant, while avoiding the payment of bribes. Please feel free to contact us.
Q12 What are the legal regulations on bribery in Vietnam?
The principal Vietnamese laws regulating bribery are the Criminal Code and the Anti-Corruption Law. Criminal penalties are set out in the Criminal Code (note that, in Vietnam, all criminal penalties—not only in the area of bribery—are set out in the Criminal Code), and attempted offenses are also subject to punishment.
Under a 2015 amendment to the Criminal Code: (1) the scope of application of the bribery offenses was expanded beyond public officials to include private individuals, meaning that so-called commercial bribery is now also regulated; and (2) not only "material benefits" such as the typical bribe of money but also "non-material benefits" became subject to punishment.
The threshold amount for punishment involving a "material benefit" is, in principle, VND 2 million (approximately JPY 12,280) or more, with the statutory penalty varying according to the amount of the benefit involved (see the table below).
There is no express provision in the Criminal Code defining what constitutes a "non-material benefit," but examples are set out in Resolution No. 03/2020/NQ-HĐTP issued by the Supreme People’s Court, which include promises of promotion or of graduation from school, and the provision of sexual services.
In addition, Vietnam’s Criminal Code also contains a provision granting immunity where a person, having been coerced into paying a bribe, voluntarily confesses before the matter comes to light. In such situations, risk-mitigation measures such as actively cooperating with investigative authorities should also be considered.
Q13 What are the legal regulations on bribery in Thailand?
Laws regulating bribery and other forms of corruption in Thailand include the Criminal Code, as well as the Anti-Corruption Act and legislation concerning violations relating to bidding with state agencies.
The Thai Criminal Code forms the core of criminal punishment. As in Japan, where a public official wrongfully receives property or another benefit in connection with their duties, or demands or agrees to receive such a benefit, this is punished as the offense of receiving a bribe.
Regarding the giving of a bribe, where a person provides, or offers or promises to provide, property or another benefit to a public official for the purpose of having that official perform an improper act, refrain from performing an appropriate act, or delay the performance of their duties, this is punished as the offense of bribery, carrying a penalty of imprisonment of up to 5 years or a fine of up to THB 100,000 (approximately JPY 482,000) (note that so-called commercial bribery between private individuals is not currently subject to regulation).
Criminal penalties are also provided for under the Thai Anti-Corruption Act. Of particular note, an amendment to this law provides that, where a person commits a corruption offense such as bribery for the benefit of a foreign legal entity, that foreign legal entity itself becomes subject to criminal penalties and may be fined. This naturally also applies to the Thai local subsidiaries of Japanese companies. The maximum fine is up to twice the amount of the benefit gained, or the damage caused, through the corrupt act.
The Anti-Corruption Act also provides that this fine may be reduced or exempted if a company has established an appropriate internal control system to prevent the occurrence of corruption offenses. As a benchmark for what constitutes an adequate internal control system, Thailand’s National Anti-Corruption Commission (NACC) has published guidelines setting out the following eight basic principles. Companies operating in Thailand should refer to these guidelines and place significant importance on establishing an internal compliance framework to prevent bribery:
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Establishing a robust and clear anti-bribery policy that is supported by top management
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Establishing a mechanism to efficiently identify and assess the risk of bribery being discovered
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Setting out, and improving, detailed measures for high-risk and vulnerable areas (such as gifts, donations, and goodwill expenditures that carry a high risk of being regarded as bribery)
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Applying anti-bribery measures to business partners as well
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Maintaining accurate records in books and accounting documents
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Establishing HR management policies consistent with anti-bribery measures
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Establishing a communication system that allows suspected bribery to be reported promptly
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Conducting periodic review and evaluation of the results of anti-bribery measures and their effectiveness
Note that, in Thailand, customary gift-giving to public officials does occur, but the NACC has issued a notification requiring that the receipt of gifts exceeding THB 3,000 (approximately JPY 14,460) be reported to a superior, among other requirements. That said, because the bribery offense under the Criminal Code has no statutory minimum amount, it is not necessarily the case that anything under THB 3,000 is automatically permissible. For example, even when giving a gift, care should be taken to avoid giving it at a time close to when the relevant official duties are performed, and to otherwise ensure that the gift can be shown, from an external perspective, to have no improper purpose.
Q14 What are the legal regulations on bribery in China?
1. Regulations Concerning Public Officials (Chinese: 国家工作人员, "state functionaries")
Regarding relationships with individual public officials, as in other countries, where a public official abuses their authority to receive money or receives money in exchange for providing favors to another person, this is punished under the Chinese Criminal Code as the offense of accepting a bribe.
On the giving side, a person who provides property to a public official for the purpose of securing an improper benefit is punished for the offense of bribery. Even without such a purpose, a person who, in the course of economic activity, violates state regulations and provides a public official with a relatively large amount of property, or provides a public official with a rebate (Chinese: 回扣, huíkòu) or commission, is also punished for the offense of bribery.
The recipient side of bribery is not limited to individual public officials. It also extends to persons closely related to a public official such as family members, as well as to "organizational entities" such as state organs and state-owned enterprises. Where property is provided not by an individual but by an "organizational entity" such as a corporation or enterprise, this is likewise punished under the Chinese Criminal Code.
In addition to imprisonment, an offender is also subject to a criminal fine (Chinese: 罚金, fájīn), the amount of which is at the discretion of the People’s Court, so there is a risk of an unexpectedly severe financial penalty.
Note that matters not expressly provided for in the statute—such as the standard for punishing bribery offense or guidance on what constitutes "circumstances that are serious"—are in some cases addressed in "judicial interpretations," which are guidelines issued by bodies such as the Supreme People’s Court.
The bribery regulations under the Chinese Criminal Code and judicial interpretations concerning public officials can be summarized as follows.
2. Regulations on Commercial Bribery
In China, not only bribery involving public officials, but also so-called commercial bribery exchanged between private parties, is subject to criminal punishment. A person who, for the purpose of securing an improper benefit, provides property to an employee of a company, enterprise, or other organization is punished under the Criminal Code for the offense of bribery.
In addition, even where commercial bribery is not subject to criminal punishment under the Criminal Code, Chinese administrative authorities may impose an administrative fine (Chinese: 罚款, fákuǎn) under administrative regulations such as the Anti-Unfair Competition Law.
For example, the Anti-Unfair Competition Law prohibits the provision of bribes for purposes such as securing business opportunities or gaining a competitive advantage, and its scope of application is broader than that of the Criminal Code, extending not only to the counterparty to a transaction, but also to persons entrusted with business by the counterparty and to persons who use their position or influence to affect a transaction. Violations can result in an administrative fine of between RMB 100,000 (approximately JPY 2,379,000) and RMB 2 million (approximately JPY 47,580,000) imposed by the administrative authorities, and in some cases a further disposition described as "confiscation of illegal gains" may be imposed in addition to the fine. Notably, the amount of such additional recovery confiscated as illegal gains tends to significantly exceed the amount of the fine itself, creating a high risk of unexpectedly large financial losses for a company, and there have reportedly been cases of enforcement against Japanese companies. Depending on the circumstances, a company’s business license itself may also be revoked.
3. Possible Responses for Companies Operating in China
As described above, in China, both bribery of public officials and commercial bribery are broadly subject to punishment. Accordingly, in addition to the general approach of "clearly refusing to give in to demands for bribes from the other party," companies also need measures to ensure that ordinary business activities—such as transactions and gift-giving—are not found by Chinese authorities to constitute bribery.
Regarding the quantitative level to keep in mind when giving a gift to a public official that does not constitute a bribe but falls within the bounds of social courtesy, under the Chinese government regulations on the receipt of gifts during external official activities, where a public official receives a gift worth RMB 200 (approximately JPY 4,758) or more, the official is required to report the receipt of the gift to the relevant department and to hand over the gift. Accordingly, if a gift is to be given at all, care should be taken to keep its value below RMB 200.
Further, regarding points to keep in mind about how a gift is given, the "Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Commercial Bribery" (issued by the Supreme People’s Court and the Supreme People’s Procuratorate) states that commercial bribery should be distinguished from non-bribery based on factors such as (1) the background and degree of the transfer of property; (2) the value of the property; (3) the reason, timing, and method of the transfer, and whether a request was made to the recipient; and (4) whether the recipient provides a benefit in the course of their duties. Even where the gift in question is not of high value, care should be taken to avoid giving a gift at a time close to the relevant duty or transaction, so that the act of transferring property is not inferred as being intended to secure an improper benefit and is therefore not deemed to constitute bribery.
Moreover, it is also important to establish internal controls in advance so that ordinary transaction activity is not regarded as bribery. The Anti-Unfair Competition Law referenced above expressly prohibits the payment of rebates or commissions to a transaction counterparty but does not prohibit discounts given to a transaction counterparty or commissions paid to an intermediary. However, since the Anti-Unfair Competition Law requires that such discounts and commission payments be recorded "explicitly" and "in accordance with the facts," it can be said that, under the Chinese legal system, transactions that "cannot be clearly and specifically documented"—of which rebates are a representative example—carry the risk of being found to constitute bribery. Accordingly, it is important for a company to accurately record the details of its transactions and to also require its transaction counterparties to keep accurate records. In some cases, it may be useful to include a clause in the master agreement with a business partner, at the time of signing, providing that "both parties shall accurately record and process the transaction for accounting purposes."
Finally, regarding follow up after the fact: the Criminal Code provides that, in cases of bribery involving both public officials and commercial bribery, a sentence may be reduced or waived if the person voluntarily confesses the act of bribery to the investigative authorities before prosecution. Accordingly, if a matter reaches the stage of being treated as a bribery case, a company should also consider risk-mitigation measures such as actively cooperating with the authorities’ investigation.