Businesses Securing EB-5 Investors Must Follow FCPA Guidelines

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The FCPA is the Foreign Corrupt Practices Act which is jointly enforced by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ). In short, the act “prohibits the bribing of foreign officials.”

There are many countries where some forms of bribery are considered as part of the customary way of doing business. (This statement should not be inferred as a reference to any specific country, and it should be notice that we did not use the word “foreign”). Because seeking EB-5 investors is inherently done in foreign countries, it is particularly important that Regional Centers, developers, and other investment seekers understand the extent of the FCPA.

Essentially, the Act applies anywhere in the world, even where there is no U.S. territorial connection. And, although it is directly aimed at public companies, its prohibitions extend to any third party agents, including consultants and, yes, Regional Centers.

The SEC and DOJ take the Act seriously, so, give allegations of corruption, including bribery, in some EB-5 operations, all parties should know the law and obey it meticulously. This can present difficulties when foreign officials expect something of value “under the table,” regardless of what that something of value is.

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