California Attorney General Warns That FCPA Violations Are Actionable Under the State’s Unfair Competition Law

He warned that bribing foreign officials is illegal under California law and will not be tolerated.

Despite the US Department of Justice’s temporary pause on FCPA enforcement, the California AG noted that the FCPA “remains binding federal law and violations are actionable under California’s Unfair Competition Law (UCL).” The UCL was enacted to preserve fair business competition and protect consumers and prohibits unlawful, unfair, and fraudulent business acts and practices. Violations of federal and of criminal laws may serve as the predicate for a UCL cause of action.

California has successfully used the UCL to secure significant fines against global companies. For example, a medical goods and pharmaceuticals company was ordered to pay over $300 million in fines for violating the UCL.

The Attorney General elaborated that as the world’s fifth largest economy, California has an interest in defending honest business. The state’s press release notes that “[p]aying bribes to foreign officials is not only unethical, it is also bad for business. Bribery erodes consumer confidence in the market and rewards corruption instead of competition.”

Businesses based in California or operating in the state should ensure that they have a compliance program designed to actively and effectively prevent and detect bribery. Read more tips on how to develop and enhance your compliance program at Compliance Fox.

The ArentFox Schiff team has extensive experience with advising companies on best practices for their compliance programs. ArentFox Schiff can help you develop uniquely tailored compliance enhancements and, if necessary, demonstrate how they work in practice to the government or other stakeholders.