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Overview of the
Foreign Corrupt
Practices Act and
Related Corporate
Procedures (A312,
A312A and A301)
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Northrop Grumman has had a long-standing commitment to
the letter and spirit of the U.S. Foreign Corrupt Practices Act
(“FCPA”). All employees must be well-informed regarding the
FCPA and various international anti-bribery laws that have
been enacted since the FCPA was introduced in the U.S.
Completion of this module should enable you to identify
issues that require the attention of the Law Department.
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Risk of Prosecution or Investigation
Reducing bribery and increasing transparency has become an
important topic in the international community and has moved
to the top of the global and political agenda. The number of
investigations and prosecutions is increasing and the
likelihood of being brought before a foreign court for
violations of international anti-bribery laws has increased
dramatically.
Ronald D. Sugar, Chairman and CEO of Northrop Grumman
has stated that FCPA compliance is a top priority for the
company and that the consequences of non-compliance
would represent a huge and unacceptable risk.
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What is the FCPA?
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U.S. law passed in 1977 to prohibit bribery of foreign
officials
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Two main components:
(1) Anti-bribery Provisions: prohibits bribes (or offers to
bribe) made to foreign officials, political parties,
candidates for public office whether made directly or
through a third party
(2) Accounting Provisions: requires accurate books and
records and adequate accounting and financial controls
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Violations can result in both criminal and civil penalties
including imprisonment, fines, loss of export licenses
and suspension from competing on government
contracts
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Who does the FCPA apply to?
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Any U.S. person or company, as well as any officer,
director, employee or agent of the company and any
stockholder acting on behalf of the company
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All foreign persons who commit an act in furtherance of a
foreign bribe while in the U.S.

Employees of foreign subsidiaries of U.S. companies can
be liable for acts committed while in the United States
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Also, foreign subsidiaries can cause liability for U.S. parent
for acts outside of the U.S.
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Corporate Procedure A312, Foreign Corrupt
Practices Act
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Provides a general description of the FCPA, defines
responsibilities and guidelines for identifying potential
compliance issues
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All employees are responsible for compliance and must
notify the Law Department of any potential or actual
violation
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In addition to criminal and civil penalties under the FCPA,
violations of A312 can lead to termination of employment
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Corporate Procedure A312A, Business
Expenditures for Foreign Officials
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All business courtesies (gifts, travel or hospitalities)
provided to a foreign official must adhere to the
guidelines and requirements in A312A. Requests for
such courtesies must be submitted to the International
Legal Group of the Law Department for pre-approval
using Form C-591 (Request for International Legal
Group Approval of Business Expenditures for Foreign
Official(s)).
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The Law Department will review the proposed courtesy
for compliance with the FCPA and the relevant local law.
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Corporate Procedure A301, Consultants,
Representatives, and Lobbyists
Companies like Northrop Grumman can be held liable under the
FCPA and similar international anti-bribery laws for the acts of
third parties, including commercial intermediaries and other
agent representatives and joint venture partners. To mitigate
this risk, any company element intending to utilize the services
of a third party must conduct a thorough due diligence to
identify any “red flags” that may indicate a potential violation of
the FCPA.
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Corporate Procedure A301 – continued
Examples of “red flags”:
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Requests for unusually large or up-front commissions
Refusal to sign FCPA certification
Requests for payment in a third country
Refusal to disclose owners, partners or principals
Use of shell companies, holding companies or blind
trusts
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Corporate Procedure A301 - continued
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Corporate Procedure A301 provides the requirements for
engaging third parties to represent the company or
provide advice or lobbying services.
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No commissioned sales representative or consultant may
be tasked or retained without the review and approval of
the Law Department!
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The Law Department reviews the ownership, financial
viability, government relations, and reputation of the
proposed agent or consultant, as well as local law
requirements, if any.
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Where to Get More Information
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Employees with specific questions about this module or
Corporate Procedure A312, A312A or A301 should contact
the Law Department. For more information on the topics
discussed in this module please contact:
James Gormley (1-410-765-3124)
David Morris
(1-410-765-0097)
Jannette Hasan (1-410-765-6654)
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Employees who wish to discuss a matter confidentially
should contact either the Law Department or the Ethics
OpenLine at 1-800-247-4952.
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Test Yourself
Click the link below to take the required on-line training and test
2006 FCPA Training