Complying with the Foreign Corrupt Practices Act in a Down Economy

By Homer E. Moyer, Jr. — Member of Miller & Chevalier

The current economic downturn and the accompanying uncertainties about job security may increase the usual pressures on managers to “make their numbers.” These pressures may tempt those responsible for foreign sales and deals to operate close to the line, or even cross the line, in their efforts to secure new business.

In this climate, risks under the Foreign Corrupt Practices Act (“FCPA”) are heightened, as some enforcement officials have already publicly noted. Corporate management, audit committees, compliance professionals, and others may worry that in the mind of an anxious manager on the other side of the world, the lure of new business may outweigh the risks inherent in an improper payment or inducement to a foreign official.

The same economic pressures, however, may also limit dollars and resources available for FCPA compliance. This twin set of pressures is causing corporations to ask themselves how they can stretch their compliance dollars and make them as cost-effective as possible.

Although the answers to this question will vary with each company’s individual business and risk profile, the following eight suggestions may nonetheless have broad applicability and help maximize the cost-effectiveness of FCPA compliance programs. Companies can implement these steps on their own or with the assistance of knowledgeable outside counsel who share a sensitivity about managing costs.