Automating FCPA Compliance Can Be A Win-Win


The U.S. Department of Justice (DOJ) relaxed its Foreign Corrupt Practices Act (FCPA) policy, better known as the “Yates Memo,” at the end of 2018. Previously, the DOJ required corporations provide all information on an employee’s potential misconduct to earn any cooperation credit during an investigation. The softened policy simply requires corporations identify individuals involved in potential misconduct to earn possible credit.

At face value, the change appears to be an easing of FCPA compliance requirements, following the trend toward more lenient Trump administration policies. But in reality, the DOJ’s motive is stepped up enforcement of the law. The old policy was slowing down investigations as corporations would carefully analyze whether or not they could earn credit before cooperating.

Increasing DOJ and SEC Enforcement and Fines

Despite the obstacles of the old policy, the DOJ, along with the Securities and Exchange Commission (SEC), took more than 50 enforcement actions related to FCPA violations in 2018, a significant spike over 2017. According to the FCPA Blog's 2018 FCPA Enforcement Index, 16 companies paid a total of $2.89 billion to resolve FCPA cases last year.

The DOJ and SEC will likely place even greater scrutiny on corporations’ anti-bribery and corruption compliance efforts in 2019. It’s more important than ever before to have the right FCPA compliance program in place. It’s equally important to have the right tone at the top. Your business leaders need to emphasize to their team members the increased need for compliance. But how can you ensure they both play their part? To start, investigate MCO’s blog “6 Ways to Mitigate Risk During the Gift-Giving Season and Year Round.

Automated Compliance is a Win-Win

Next, consider investing in an FCPA compliance monitoring technology that can make it easier for both your leaders and employees to understand and act on their obligations. Doing so will make it more likely for them to buy-in to your compliance program. They can both have access to clearly defined policies and procedures developed in accordance with your risk profile and which can be applied consistently and globally.

Technology can also give your Compliance and Finance departments more control by proactive, pre-approval of expenses along with reduced paperwork. Managers will have greater transparency into what their employees are doing in real-time in accordance with your policies. And they will have the ability to raise red flags and follow up with real-time audits before violations can occur.

Finally, an automated system allows you to easily aggregate the data you need to provide regulators should you have to cooperate on an FCPA investigation to earn credit. In the case of the revised DOJ policy, that's identification of employees involved in potential employee misconduct. An automated system can help you quickly identify data trends that lead to such evidence. And that will give you peace of mind heading into the uncertain regulatory environment ahead.

Learn more about Gifts and Entertainment automation