The FCPA and International Anti-Corruption Law
Description
U.S. and foreign businesses increasingly face a multitude of international anti-corruption laws. Their dangers can be mapped, their risks can be mitigated, and a safe course can be plotted, but operating blindly comes with great peril. The U.S. government is devoting ever increasing resources to enforcing the Foreign Corrupt Practices Act (“FCPAâ€), and other nations are following suit with their own—often more stringent—anti-bribery laws, such as the UK Bribery Act of 2010. Authorities are deploying a broader array of investigative techniques than ever before and imposing harsher sanctions, and jail sentences are increasing at record rates. Doing business abroad today requires close and careful attention to these laws.
One of the most difficult things about anti-corruption compliance is finding the right match between the risks a company faces and its compliance efforts. Many companies underestimate the risks of anti-bribery violations, while others can overreact in complying with those laws. Much like buying insurance, there are many compliance options out there; a company should buy the coverage that is needed.
Effective compliance, like insurance, means understanding the risks and reacting appropriately. We find it helpful to think of compliance in three distinct phases: “before,†“during†and “after.†“Before†means understanding the particular risks faced by your company, setting up a compliance program to address those risks, and allocating the right resources to it. “During†means implementing the program and providing vigorous oversight — making sure that the program exists in real life, rather than just on paper. And “after†means investigating, resolving, and remediating potential FCPA issues that come to light.
Each of these three phases requires care and attention. There must be cooperation and involvement from the highest levels of management. The compliance program must be led by a member of management with the authority to make difficult calls as needed — in effect, the power to say “no†when necessary. Risk assessment must be ongoing, sometimes with the help of outside counsel. No matter the situation, a good rule of thumb is for a company always to be asking itself, “How Will This Look?†That is, if a corruption problem ever arises, how will the company’s actions look to investigators, employees, or a jury, or on page one of the New York Times? Businesses that follow this rule can avoid the worst outcomes while fostering a more ethical business environment for themselves and preserving their ability to compete in a globalized economy.
This chapter first provides a brief overview of the anti-corruption laws in the U.S. and the United Kingdom. It then summarizes the typical steps that companies take in developing and implementing anti-corruption compliance programs.
One of the most difficult things about anti-corruption compliance is finding the right match between the risks a company faces and its compliance efforts. Many companies underestimate the risks of anti-bribery violations, while others can overreact in complying with those laws. Much like buying insurance, there are many compliance options out there; a company should buy the coverage that is needed.
Effective compliance, like insurance, means understanding the risks and reacting appropriately. We find it helpful to think of compliance in three distinct phases: “before,†“during†and “after.†“Before†means understanding the particular risks faced by your company, setting up a compliance program to address those risks, and allocating the right resources to it. “During†means implementing the program and providing vigorous oversight — making sure that the program exists in real life, rather than just on paper. And “after†means investigating, resolving, and remediating potential FCPA issues that come to light.
Each of these three phases requires care and attention. There must be cooperation and involvement from the highest levels of management. The compliance program must be led by a member of management with the authority to make difficult calls as needed — in effect, the power to say “no†when necessary. Risk assessment must be ongoing, sometimes with the help of outside counsel. No matter the situation, a good rule of thumb is for a company always to be asking itself, “How Will This Look?†That is, if a corruption problem ever arises, how will the company’s actions look to investigators, employees, or a jury, or on page one of the New York Times? Businesses that follow this rule can avoid the worst outcomes while fostering a more ethical business environment for themselves and preserving their ability to compete in a globalized economy.
This chapter first provides a brief overview of the anti-corruption laws in the U.S. and the United Kingdom. It then summarizes the typical steps that companies take in developing and implementing anti-corruption compliance programs.
