International Corporations: Adhere to the Foreign Corrupt Practices Act
If you lead a company that is facing charges related to the Foreign Corrupt Practices Act (FCPA), you could be looking at serious time behind bars, in addition to potential disbarment, suspension, and reimbursements. The FCPA is something every corporate CEO and every manager should be conversant in if their company operates outside of the United States in any capacity. There are two primary provisions in the act:
- One that deals with bribery;
- One that addresses accounting.
Business leaders should be aware that they are going to be held liable for any violations of the FCPA, regardless of the size of the infraction or who, specifically, was involved in the corruption.
Bribery Provisions
The FCPA specifically bars any person, employee, or business from offering anything of value to a foreign government in exchange for influence or opportunity in this country. The goal is to maintain and protect a level playing field for all business transactions in the international arena.
Accounting Provisions
The accounting requirements of the FCPA punish companies whose basic accounting lack checks and balances, as well as those who provide inaccurate financial certifications to the SEC.
Avoid these Errors
Unless the government is relatively certain they have a strong case, they generally do not bring a FCPA case to court. But sometimes corporations make basic mistakes that get them in trouble, putting them on the government’s radar:
- Failing to do a risk assessment in order to save money: Doing business outside of the United States exposes companies to risk, principally in certain countries like China, Mexico, Brazil, and India. These countries have a reputation as countries with a high level of corruption, but are second to countries including Pakistan, Nigeria, Russia, and Vietnam. Conducting a risk assessment before doing business could save a lot of headaches and potentially illegal entanglements in the long run.
- Believing everyone does it: Some managers justify their actions, believing that corruption is inevitable when dealing with foreign countries. They tell themselves it’s accepted practice to engage in bribery in some situations in order to maneuver through foreign government red tape. However, FCPA regulations are not optional for U.S. corporations who do business outside the country. Corruption—bribery– will be prosecuted.
- Failing to have & enforce a FCPA policy: Because compliance to the FCPA is so essential, creating a policy and assigning a high-level manager to head the compliance team is paramount for any company that does business outside of the country. There should be a strong missive that originates from the top and bleeds down to every member of the company: corruption is intolerable.
- Neglecting to train employees and intermediaries: If one person engages in corrupt practices on behalf of the company, it puts the whole company at risk. Even a third-party who mediates on behalf of a company can leave that company open to charges. Third parties most exposed to this risk are sales people, lobbyists, and joint venturers, and any corruption on their part is directly connected to your business. Make sure any third parties who interact with foreign agents on your behalf are playing by the rules.
Defending Your Reputation
If you are facing FCPA charges, you will require a strong defense. At risk is more than your livelihood: your personal reputation is on the line, as well. At Lobo Law, our Las Vegas criminal defense lawyers understand the issues and we know what’s at stake. Contact our experienced team in Las Vegas today for a consultation on your case.
Source:
justice.gov/criminal-fraud/foreign-corrupt-practices-act
