Regulations: Non-U.S. Activity
Work with non-U.S. collaborators and sponsors is subject to certain U.S. regulations. If you have questions regarding compliance with these laws, contact the Office of the General Counsel.
Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) prohibits payments or gifts of anything of value, directly or indirectly, to a foreign official for the purpose of influencing the official to give business or obtaining an improper advantage in securing or retaining business. Enforcement is handled by the U.S. Department of Justice, which interprets the terms “anything of value,” and “foreign official” broadly.
“Anything of value” may be construed to include use of materials, facilities, equipment, entertainment, meals, lodging, and transportation.
“Foreign official” may be construed to include employees of state-owned or controlled entities, such as hospitals, laboratories, and businesses.
Violations of the FCPA can result in serious criminal penalties against the individual who made the unlawful payment as well as the entity on behalf of which the payment was made. All financial transactions should be well documented to demonstrate that they are lawful and authentic.
U.S. Anti-Boycott Laws
The Export Administration Act (EAA) prohibits or penalizes U.S. individuals and entities from cooperating with international economic boycotts in which the U.S. does not participate. The purpose of such prohibition is to prevent U.S. organizations and entities from supporting or participating in foreign policies of other nations that run in a manner contrary to U.S. policy.
Boycott-related activities prohibited by the U.S. Department of Commerce include:
- Refusing or requiring others to refuse to do business with or in a boycotted country or with a national of a boycotted country or with a boycotted person;
- Refusing to employ or otherwise discriminating against a U.S. person, in deference to a boycott request, on the basis of race, religion, sex, or national origin;
- Furnishing information, in response to a boycott request, about the race, religion, sex, or national origin of a U.S. person or any owner, officer, director, or employee of a domestic concern or any of its “controlled in fact” non-U.S. affiliates;
- Furnishing information about any person’s past, ongoing, or proposed future relationships (or the absence of relationships) with other parties, if that information is sought for boycott-related reasons;
- Furnishing information about any person’s association with or support for any charitable or fraternal organization supporting a boycotted country; and
- Paying, honoring, confirming or otherwise implementing a letter of credit that contains any prohibited boycott requirement or request.
The Department of the Treasury implements anti-boycott laws through the Internal Revenue Code (IRC) by denying tax benefits. The IRC requires a U.S. individual or organization to report services performed in, with, or related to a boycotting country or its nationals, whether or not they are for profit. Violations of reporting requirements or anti-boycott laws can result in significant fines and potentially imprisonment.
The U.S. Department of the Treasury maintains a list of boycotting countries; operations in these boycotting countries must be reported. If your program is planning to conduct any activities or business transactions in one of the countries on the Treasury Department list, the program administrator should contact MIT’s Office of General Counsel.