Some Tips on Formulating an FCPA Compliance Effort

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A recent article in CFO that noted that the Feds (are) Oil(ing) Up Their Antibribery Machine had some great tips for those of you looking to put a rigorous FCPA compliance effort in place — and minimize the chances that you, like Mr. David M. Pillor of Invision, will be slapped with a 65,000 civil penalty merely for being in charge of internal controls that failed to spot violations. (That’s right … you don’t even have to make, approve, or be aware of bribes to be charged! If you’re responsible for financials or compliance, and if the financials are found to be incorrect or your company found to be in non-compliance, thanks to recent acts, like SarBox, you can be prosecuted civilly.)

So if you want to avoid a dire, and expensive fate, be sure that your rigorous efforts to be compliant include:

  • background checks on business partners and third parties
  • a code of conduct for employees, suppliers, & agents
  • compliance training
  • effective internal controls
  • record-keeping systems that properly account for all overseas transactions
  • a hotline for whistle-blowers to anonymously report possible violations

And if a possible violation is discovered, working with your legal counsel, voluntarily disclose the violation as soon as possible. This will allow you to distance yourself from the responsible parties as soon as possible, avoid prosecution, and mitigate penalties. Considering that you could be slammed with a 1.6 Billion settlement, like Siemens AG, if the Feds find violations and prosecute, you want to do everything you can to minimize damages.