IMPROPER PAYMENTS TO OFFICIALS OF FOREIGN COUNTRIES.

SEC. 5. IMPROPER PAYMENTS TO OFFICIALS OF FOREIGN COUNTRIES. (a) Denial of Deduction.—Section 162 (relating to trade or business expenses) is amended by redesignating subsection (c) as subsection (d), and by inserting after subsection (b) the following new subsection: “(c) Improper Payments to Officials or Employees of Foreign Countries.—No deduction shall be allowed under subsection (a) for any expenses paid or incurred if the payment thereof is made, directly or indirectly, to an official or employee of a foreign country, and if the making of the payment would be unlawful under the laws of the United States if such laws were applicable to such payment and to such official or employee.” (b) Effective Date.—The amendment made by subsection (a) shall apply only with respect to expenses paid or incurred after the date of the enactment of this Act. The determination as to whether any expense paid or incurred on or before the date of the enactment of this Act shall be allowed as a deduction shall be made as if this section had not been enacted and without inference drawn from the fact that this section is not made applicable with respect to expenses paid or incurred on or before the date of the enactment of this Act.