Mike Koehler discusses the recent release by the OECD of “the most comprehensive guidance ever provided to companies and business organizations by an international organization” on internal controls, ethics and compliance programs to combat bribery.
Today, the DOJ announced the indictment of 22 “executives and employees of companies in the military and law enforcement products industry” for scheming to bribe foreign officials in the “largest single investigation and prosecution against individuals in the history of DOJ’s enforcement of the FCPA.”
In his regular featured column on Corporate Compliance Insights, Mike Koehler describes the current debates in UK about an FCPA-like “Bribery Bill” as well as the FCPA implications of IPOs.
Chevron has been involved in a long, mammoth legal battle in Ecuador involving allegations of environmental contamination at oil fields in the Amazon. This long, messy battle now includes an FCPA component.
Mike Koehler is the new Featured FCPA Columnist for CCI. In his first contribution, Koehler discusses benchmarking FCPA compliance and the risk of FCPA violations even in seemingly low-risk countries.
By Thomas Fox, FCPA Compliance Attorney and Consultant
U.S. companies have long utilized foreign business partner relationships to leverage their global reach and assist in the growth and development of overseas business relationships. When a U.S. company enters into this type of business relationship, it enables the company to expand their commercial reach in a cost effective manner. One key component of this foreign business relationship is that the U.S. company must manage compliance by the foreign business partner under the Foreign Corrupt Practices Act (FCPA).
By Leslie McCarthy, Director at The Steele Foundation
The fact is that there are “best practices” for the execution of due diligence, including basic standards and principles familiar to any investigative professional. These common ingredients underpin a credible FCPA due diligence program and stand up to scrutiny and potential litigation.
While the FCPA provides no ready “checklist” or timetable for acceptable and compliant levels of due diligence, there are norms that demonstrate legitimate commitment to regulatory accountability. Corporate due diligence investigations can vary depending on international legal constraints and practice; internal budgets and ethical codes; resources and case management tools; spirit and letter of the law as it applies within a given company’s particular industry sector. The standard for what constitutes “adequate” compliance is not set in stone and can’t be, at least in some respects, but there are without doubt meaningful guideposts and principles of which corporate leadership must be aware in order to maintain adequate fiduciary, ethical and practical standards of care.
The following white paper, which incorporates a wide variety of source material and primary interviews with compliance officers, legal counsel, government, law enforcement and experts in the field of corporate compliance and ethics, provides baseline terms and goals for compliance-driven due diligence programs which are necessary to vet third parties. Although particular emphasis has been placed on the FCPA’s specific strictures, the discussion and standards outlined herein may be considered across the spectrum of laws and regulations, both domestically and abroad.
By Daniel Levin – Partner at White & Case in Washington, DC
Companies lacking an anti-corruption compliance program face great legal, financial, and reputational risks. Government investigators will have no sympathy for those who fail to devote sufficient resources to compliance. Indeed, enforcement officials would certainly take the opportunity to make an example of companies that cut compliance resources in response to the financial crisis. Moreover, the trend towards prosecuting individuals—in addition to or rather than the company—is also likely to continue. But FCPA vigilance, like other forms of corporate compliance, need not break the bank in a time of budget constraints and cost controls.
The solution begins with a risk-based compliance assessment.
Rebekah Poston and Gregory Bates — Squire, Sanders & Dempsey
When the economic going gets tough, multinational companies might be tempted to cut costs by cutting back on steps needed to comply with the Foreign Corrupt Practices Act (FCPA).
But the Department of Justice is on record that it and the Securities and Exchange Commission don’t expect to cut back on the number of FCPA investigations and prosecutions. In 2008, the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) collected more than $924 million in combined penalties from corporations and individuals for FCPA violations. And lead DOJ Prosecutor Mark Mendelsohn recently – and pointedly – noted that even though the global economic crisis presents “a grave challenge in the fight against foreign bribery … companies need to be especially vigilant in this economic climate not to cut back. Our law enforcement efforts are not going to be scaled back, and so it would be, I think, a grave mistake for a company to take that path.”
Instituting policies and procedures that implement the Guidelines and practicing effective due diligence are two bedrock fundamentals of FCPA compliance and risk mitigation.
by Thomas Fox — FCPA Compliance and Risk Management Attorney and Consultant
The application of the Foreign Corrupt Practices Act (FCPA) to gifts and business entertainment expenditures to foreign officials is an area open to vagueness. There are no clear guidelines in the FCPA itself or the legislative history. While prohibiting payment of any money or thing of value to foreign officials to obtain or retain business, the FCPA arguably permits incurring certain expenses on behalf of these same officials. The presentation of a gift or business entertainment expense, however, can constitute a violation of the FCPA if this is coupled with the corrupt intent to obtain or retain business.
