The Association of Corporate Counsel (ACC) published an article in May focusing on the top ten things small corporate legal departments need to know about complying with the Foreign Corrupt Practices Act (FCPA). While all ten are good to review, three stand out as critical to making sure your FCPA compliance program is more than just a written policy.
#1: You need an executive who is accountable for the “tone at the top.”
It may not be a good idea to make this the general counsel. FCPA compliance is more than just the cost of doing international business. And it’s likely your GC is already overworked. Having the CEO, CFO or a Board member be the executive sponsor of your FCPA Compliance program will get employees to understand the serious nature of adhering to it.
#2: Train employees and managers PLUS the Board AND third parties.
Your training needs to be practical. Familiarize your employees, managers, board members, and third parties with the actual corruption risks in your industry; the countries where you do business; and the business model your company is using. Trained individuals should be able to recognize red flags and to know what to do when they see them. Too many companies assume third party representatives helping them do business in foreign countries are FCPA compliant. You need to make sure they are not only compliant but can meet your own company’s FCPA program requirements.
#3: Get to know all the third parties your company uses for international business.
Third parties do not shield your company from liability. They create liability. 90% of FCPA cases brought by the US government involve conduct by 3rd parties. Some third parties represent much more risk than others. Examples include sales agents, lobbyists, joint ventures, government officials, and distributors or resellers who receive variable pricing and discounts.
To see the full list of things your small corporate legal department needs to know about FCPA compliance, consider reading the ACC’s article on the topic.