FCPA Compliance: More Important Now than Ever
Running an FCPA Compliance Program in 2013 is a much more demanding task than it was a few years ago. A few points to consider:
- Bribery, corruption and falsification of records are, unfortunately, very common in international business. Most business people running companies with international operations believe their company is clean and their fellow employees are honest, but most companies have done no actual corruption risk assessment and have no data to support that belief.
- The Department of Justice, SEC and FBI have all dramatically increased their resources for investigations and prosecutions. The chance of your industry, your company and your executives being subject to an FCPA investigation is increasing year by year.
- Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, employees, partners and other persons who provide original information of an FCPA violation by a public company can receive between 10% and 30% of the resulting fines as a "whistleblower" bounty. This is a powerful incentive for an employee who has evidence implicating the company in an violation to take the information to the Department of Justice rather than to company management or the company hot-line.
- The government is focusing on bringing cases against executives as individuals, and it is winning virtually all those case. Liability for FCPA violations extends to executives, including CFOs, GCs, Sales VPs and other executives who are control persons or may be considered to be aiding and abetting violations.
- The Department of Justice and SEC published a very helpful FCPA Guidance in 2012. That Guidance lays out clearly the elements that the government considers to be essential in a company's FCPA Compliance Program. Unfortunately most companies' programs do not contain all of the elements the government considers to be essential. But fortunately an appropriate, adequate FCPA Compliance Program which contains all the elements can be developed and put in place in a very cost effective manner.
- The standards to receive credit for having an adequate anti-corruption compliance program under the Federal Sentencing Guidelines are very difficult to meet. Very few companies' programs meet the Guidelines. Does your company's board of directors and senior management know that your company's anti-corruption compliance program does not meet the Federal Sentencing Guidelines standards? Do they understand the impact that failure can have on the company? Do they know why your company's program does not meet the Guidelines?