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How to Improve your FCPA Program

How to Improve your FCPA Program

 

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Full video transcript available below:

Hello and welcome to today's webinar hosted by me, Joe Boyhan of MCO, and Paul Murdock of MCG Compliance Services. Today, we're going to be looking at the Foreign Corrupt Practices Act or the FCPA.

I now want to pass you on to Paul, who's going to start today's webinar. 

So, I mean, things to do to protect your organization, your offices and employees. Key things to have in place, especially since many of the folks that's on this call are within financial services, are always written policies and procedures. That applies to everyone, so I shouldn't segment that to financial services. We must have written policies and procedures in place around FCPA.

Annual training for staff on FCPA policies, that is always ... That is more than just an idea. This is something that should be ingrained in the culture of your organization, to train around these policies and procedures. You can't just ... I want to say something about training, annual is important because sometimes people will say, "Well, look, you know, I know all about this stuff. You trained me last year, the year before that.", but, you know, people forget. Because a lot of these ... A lot of aspects of this rule, I would say, can be very nuanced. So, it's important that people keep training and keep refreshing once [inaudible 17:00].

So, annual attestation, at this station, to develop policy by the following; senior management, sales and finance staff and accountant staff who approve expenses. Now, some people may say, "Okay, so there's policies and procedures so, I could see senior management. I get that." Sales, I mean, obviously the sales guys are front line folks that are dealing with some of these potential foreign folks that the Act applies to.

Finance staff, accountant staff, you may want to ask yourself, "Well, why finance and accounting?" Well, you know, as I said previously, you know, with the accountant rules typically finance and accountant people are some of the first line of defense to see what's going on in this because clearly a lot of times they are seeing wires and disbursement, intent. Just really make any business sense, you know, "Why are we sending this wire to this entity? Do we have enough information about the entity or individuals? Have we done the due diligence?" So, you know, accountant folks, finance folks, are very, very important to protect the organization from potential violations of this Act.

Review of contracts with all vendors and business associates, ensuring code of conduct to be in compliance with FCPA. I think that's a very important aspect. Sometimes, you know, we don't do enough then the due diligence. We want to make sure that they do have a code of conduct around this law so that they're aware of all aspects and, you know, where it could lead in terms of violations and sanctions.

We shouldn't just take their word for it, I mean, for vendors, a lot of times, you know, there's plenty of information that's posted on their website and their policies. So, you know, as compliance officers, we should take a look at vendor websites to see if it's posted there. If it's not then we should request it and make sure that we, you know, document that as part of our due diligence files.

Firms should have disciplinary procedures for those that violate the policy. So, clearly, you know, it should be written in the policies, as we talked about in the first bullet, but you should also review it to make sure that everyone is aware of it, once again, as part the training. The disciplinary procedures part of that is important because employees need to know, you know, what personal consequences it has to them for violating the Act, right? Besides just being fired.

You know, obviously you would not want to fire, or if it happens that you have an employee that violates the Act and you have to fire them, I mean, you want to make sure that whoever is hiring them, you know, may have some perspective on what went on. We want to be, obviously, careful in terms of even information we give out about employees.

So, I would say that a good course of action is to be in touch with both internal and possibly external council in terms of how you want to handle it once someone has violated. Obviously, or hopefully, by that point in time, you know, legal will be very abreast and well aware of what went on. That's, kind of, a work in assumptions though. You just want to make sure that you, you know, have all of those things lined up.

Consultants and temporary staff, clearly we want to scrutinize them. Some companies, some firms, even for consultants and temporary staff, will take them through a onboard in process that will talk about the policies of the firm. Not just this policy, but other aspects as well. So, just as an opportunity if you haven't introduced it into your program to talk about FCPA, is, kind of, part of that onboard in process.

Next slide please. Record keeping. So, the record keeping and internal contract provisions only apply to companies registered with SEC for record keeping purposes, but we want to make sure that we keep any records and internal documentation, obviously. A review of market and expenses. Once again, going back to the aspect I mentioned before about accountant and financial professionals, we want to make sure that they take a look at this. So, scrutinize marketing expenses in foreign jurisdictions is a pretty good idea because, one, we want to make sure that it's a legitimate market and expense, and not just something that says market and expense, but really no market intent.

As I talked about before, a lot of this Act revolves around corrupt intent. So, we want to make sure that we always, you know, are cognizant of what other people are doing and what the intent is. So, market and expenses is one that usually comes up a lot, where people try and hide bribes. So, that's an area that you should focus on.

Affiliates reporting to Parent company, you want to make sure that you have strong control and a reporting structure for all of the affiliates, as well as the Parent company around FCPA. So, you just want to make sure from a governance perspective, organizationally, that all of these things are being captured appropriately.

Use of outside experts to review program periodically. I always think that's a good idea. Sometimes we get a little insular in our own world and it's always good to have an outside perspective. So, you know, a consultant firm can come in and gladly assist you with that. External orders can assist you with that. Outside council can assist you with that. So, it's always good to, you know, make sure you get a second, third pair of eyes on your current procedures.

Then there's, you know, we are in a new world in terms of technology and software being out there to help track these initiatives. Clearly our partners with MCO, have software and technology that they've developed, which you'll hear about a little later on, but the use of technology is important and, you know, today's environment cuts size, breath of organizations from anything's going around. It's a good way to track and instead of just putting it on Excel spreadsheets.

 

 

This webinar was co-hosted with MCG Consulting

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