<u>Corporation R makes payments to potential clients, including representatives of foreign labor organizations and private foreign companies to facilitate business. If the company knows that the payments will be passed on to a foreign government, then this practice is illegal if the payments violate the Foreign Corrupt Practices Act. </u>
Further Explanation:
Foreign Corrupt Practices Act: It is enacted for making payment unlawful that is made by certain classes of entities and persons to foreign government officials to facilitate business.
Justification for correct and incorrect answer:
a.
Illegal if the payments violate the Foreign Corrupt Practices Act: This option is correct.
The FCPA states any payment made to the foreign government to assists in retaining and obtaining business is unlawful under the law. So, if the payment violates the conditions that are laid down in the Act, then it is illegal.
b.
Legal because the third party acts as “go-between’’: This option is incorrect.
According to the law, if the payment is made indirectly or through the agent but violates the conditions that are laid down in the Act, then the payment is still considered.
c.
Legal because the private parties are involved on both sides of the deal: This option is incorrect.
The involvement of the private parties on both sides of the deal does not make the payment legal to a foreign government if it is made to facilitate the business.
d.
Legal because the payments are made to facilitate the business: This option is incorrect.
The payment made to a foreign government for obtaining or retaining the business in the country is illegal under the Foreign Corrupt Practices Act.
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Answer details:
Grade: Middle School
Subject: Business Studies
Chapter: Business law
Keywords: Rio Corporation makes payments to potential clients, including representatives of foreign labor organizations and private foreign companies to facilitate business. If the company knows that the payments will be passed on to a foreign government, this practice, illegal if the payments violate the Foreign Corrupt Practices Act, legal because the third party acts as “go-between’’, legal because the private parties are involved on both sides of the deal, legal because the payments are made to facilitate the business.
