No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe
Jump to a Section
  • At the Office
    • Ethics
    • HR Compliance
    • Leadership & Career
    • Well-Being at Work
  • Compliance & Risk
    • Compliance
    • FCPA
    • Fraud
    • Risk
  • Finserv & Audit
    • Financial Services
    • Internal Audit
  • Governance
    • ESG
    • Getting Governance Right
  • Infosec
    • Cybersecurity
    • Data Privacy
  • Opinion
    • Adam Balfour
    • Jim DeLoach
    • Mary Shirley
    • Yan Tougas
No Result
View All Result
Corporate Compliance Insights
Home FCPA

Companies Ignore Cross-Cultural FCPA Competence at Their Own Peril

True compliance with FCPA requires evolving local, regional knowledge

by Kenneth Johnson
August 1, 2023
in FCPA
brazil corruption protest

The two main areas of FCPA focus are well-known, prohibitions against bribery and SEC accounting reporting. But as business development expert Kenneth D. Johnson argues, local cultural awareness is just as important — or should be.

The FCPA, enacted in 1977 by the U.S. Congress, attempts to ensure fair commercial dealing, government integrity and accountability. The purpose of this legislation is to stop and prevent corruption, thus creating a level playing field and restoring market integrity. Its primary focus areas are spelled out in its anti-bribery and records provisions.

The FCPA’s two main areas of focus:

  1. Anti-bribery provisions: Prohibit the promise, payment or giving of money or anything of value to any foreign official to obtain or retain business.
  2. Accounting requirements: Companies required to file periodic reports with the SEC are to (i) maintain a system of internal accounting controls and (ii) to make and keep books, records, and accounts, which accurately reflect the transactions and dispositions of assets of the issuer.

But there’s a crucial third plank for an effective FCPA compliance program that often goes overlooked — understanding local cultural practices.

Intercultural knowledge

Intercultural knowledge is the third and most overlooked element for complete FCPA compliance. Companies have disregarded this aspect of compliance at their peril. Simply applying U.S. or Western standards of business ethics and practices in countries or regions vastly different from U.S. business norms may see the noblest of compliance efforts go awry. No matter how well-intentioned internal policies and procedures are, if they do not incorporate a strong cross-cultural component. 

U.S. companies must also comply with the Bank Secrecy Act and its implementation regulations, such as anti-money laundering rules. Important to note is the link between FCPA and AML in many emerging economies: A violation of the former almost certainly leads to a breach of the latter. A deep and broad understanding of local customs, culture and mores underpin a successful compliance framework. 

As emerging countries and regions continue to grow in significance to U.S. companies, the importance of cross-cultural competency takes on a higher purpose. It is vital for any compliance strategy to analyze and address the “foreign” component in the FCPA, without which your corporate compliance framework would be woefully inadequate and ineffective. Corruption almost always takes on a local dimension, whether bribes referred to as “facilitation fees” in some countries, “grease,” “dash,” “commissions” or simply time-honored “gifting-giving” in others. 

To further complicate matters, an increasing number of countries have established anti-corruption commissions or other such bodies to monitor various business activities and transactions, albeit with varying degrees of enforcement strengths but all with a local, social and cultural dimension; violation of these local laws will likely trigger a separate U.S. FCPA investigation.

FCPA conferences are held throughout the year, and very few, if any, focus on cross-cultural factors and implications in any meaningful way that will lead to actionable steps to address potential cross-cultural pitfalls.

Red flags in a row
Compliance

Identification of “Red Flags” for Possible Violations of Key U.S. Laws for Companies Operating Overseas

by Sharie A. Brown
October 14, 2017

Read moreDetails

A serious enterprise risk exposure

Multinational companies with a direct or indirect presence through suppliers or agents in multiple jurisdictions, notably in frontier or emerging markets, often experience myriad political, cultural and compliance complexities, along with new obligations and responsibilities as they navigate these evolving global marketplaces.

The U.S. federal government has dramatically sharpened its focus on business activities in foreign countries, from investigation to prosecution — FCPA enforcement is intensifying. The DOJ is vigorously policing the activities of U.S. firms to ensure strict compliance with its anti-bribery and accounting provisions. This renewed focus presents a unique threat to multinationals operating in emerging regions. Understanding, preventing or mitigating this risk is critical to avoid stiff fines and other penalties, long and disruptive investigations and reputational risk to businesses due to the high-profile nature of these cases.

Applying the law to emerging markets

Opportunities in transitional and developing countries often require dealing with unfamiliar geographic territories and foreign governments where lines between politically exposed persons (PEPs), government officials and non-officials are sometimes blurred, and their roles are not always evident. These situations make compliance with numerous international, regional or local laws even more difficult. Companies operating in these jurisdictions face unforeseen regional and country-specific risks that may be culturally based, resulting in civil or criminal penalties.

Understanding how to identify potential FCPA risk exposures more common in emerging regions and ways to mitigate or prevent such risks is critical. First-hand knowledge and a deep understanding of business pitfalls in emerging countries can help protect an enterprise from financial and reputational risks. A practical approach to tackling bribery on foreign soil includes an examination of important local customs and belief systems and how they affect FCPA compliance.


Previous Post

Business Continuity & Disaster Planning 101

Next Post

SEC’s New Cybersecurity Rules Are Finally Out. Are They as Strict as Many Feared?

Kenneth Johnson

Kenneth Johnson

Kenneth D. Johnson is an authority in business development, supply chain and enterprise risk management (ERM) relating to Africa and other emerging markets and has 18 years of experience. He provides insightful analysis, process improvement and recommendations in the areas of regulatory compliance, risk mitigation and growth strategies. His experience has included working with the private sector, the Sierra Leone Government Gold and Diamond Office (GGDO) and local miners to implement the Kimberly Process concerning conflict diamonds. Kenneth is an adviser, trainer and speaker. He is a principal at Devconia, LLC and a former executive with Accenture and PricewaterhouseCoopers.

Related Posts

ice building

How Business Leaders Can Navigate a Shifting Immigration Policy Landscape

by Jorge Lopez, Deepti Orekondy and George Michael Thompson
June 25, 2025

Immigration policy changes under the Trump Administration extend far beyond border security, creating immediate business disruptions from workforce gaps to...

risk reporting concepts

The ‘So What?’ Problem With Board Risk Reporting

by Jim DeLoach
June 24, 2025

10 modern principles for transforming risk communication from compliance exercise to strategic dialogue in uncertain times

board of directors meeting table

Before You Say Yes to That Board Seat: A Director’s Due Diligence Checklist

by Chase Cole and Sidney Edgar
June 24, 2025

Public company directors face scrutiny from Wall Street, Congress, the SEC and beyond — comprehensive preparation is essential for business...

slippery slope ice mountain

The Slippery Slope & Your Culture of Integrity

by Mary Shirley
June 23, 2025

Small transgressions and unanswered questions create pathways to major misconduct — and compliance teams need strategies beyond punishment

Next Post
sec building exterior

SEC’s New Cybersecurity Rules Are Finally Out. Are They as Strict as Many Feared?

No Result
View All Result

Privacy Policy | AI Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Research
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2025 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
No Result
View All Result
  • Home
  • About
    • About CCI
    • CCI Magazine
    • Writing for CCI
    • Career Connection
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Library
    • Download Whitepapers & Reports
    • Download eBooks
    • New: Living Your Best Compliance Life by Mary Shirley
    • New: Ethics and Compliance for Humans by Adam Balfour
    • 2021: Raise Your Game, Not Your Voice by Lentini-Walker & Tschida
    • CCI Press & Compliance Bookshelf
  • Podcasts
    • Great Women in Compliance
    • Unless: The Podcast (Hemma Lomax)
  • Research
  • Webinars
  • Events
  • Subscribe

© 2025 Corporate Compliance Insights