Wal-Mart is broadening an investigation into potential violations of U.S. anti-corruption laws by the chain’s international operations. The probe started in Mexico, but Wal-Mart said it has added China, India and Brazil.
American companies operating abroad are subject to the Foreign Corrupt Practices Act, a law that is intended to deter bribery but which has many legal gray areas. Just this week, the Justice Department tried to clarify critical portions of the FCPA — to mixed reviews.
“Basically we have a situation here where Wal-Mart is alleged to have made improper payments in Mexico that perhaps allowed it to open up its stores earlier than if it would have if it had gone through the normal regulatory process in Mexico,” says Mike Koehler, a law professor at Southern Illinois University who also blogs at FCPAProfessor.com.
Koehler thinks this could be more of a misunderstanding or a slip-up on Wal-Mart’s part. “More often than not, the case is that someone is making payments on the company’s behalf,” he says. “The U.S. has a very, very broad standard for corporate criminal liability; it’s the notion that anyone acting on the company’s behalf can expose a corporate entity like Wal-Mart to legal exposure in the case like this.”
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