FCPA

Recipe for Anti-Corruption Successes: Due Diligence, Diverse Messaging

May 08, 2012

Much goes into doing anti-corruption properly, but there are four broad categories that top companies focus on: assessing corruption risks, devising controls against them, implementing those controls and procedures with the local workforce, and then following up with constant monitoring. Inside, more lessons for building an effective anti-corruption program.
 

Finding FCPA Violations in Employee Expense Reports

May 01, 2012

Travel and entertainment expenses have long been a haven for abuse, but since the dollar amounts are often insubstantial, companies don't always pay close attention to them. Companies are now finding, though, that they can be a conduit for bribes. "If T&E goes unchecked, it can make a company susceptible to allegations of corruption," says Andrew Levi, head of the Miami office at investigation firm Nardello & Co. How to root out fraud? More inside.
 

Walmart, in Damage Control Mode, Appoints Global FCPA Head

April 25, 2012

Walmart shifted into full damage control mode last week, following allegations of a massive bribery and corruption campaign at its Mexico operations. It has issued a statement on the charges and announced it will appoint a global FCPA compliance chief along with making other "enhancements" to its FCPA compliance practices. Details inside.
 

The High Cost of FCPA Investigations

April 17, 2012

Forget about fines and penalties to settle a Foreign Corrupt Practices Act investigation; simply conducting one can run into the hundreds of millions of dollars. Just ask Avon: The cosmetics company has spent $249 million since 2009 to investigate charges of FCPA violations. Inside are more examples of those racking up massive FCPA costs and tips to hold down expenses.
 

The Future of Compliance: Metrics and Communicating Risks

April 03, 2012

What's on the horizon for compliance and ethics? Metrics and communicating risks will dominate the agenda, say compliance executives. As companies expand overseas, they need better tools to measure and identify risk areas such as corruption. "The compliance function has become much more about metrics, especially for third-party vendors," said Brackett Denniston, general counsel at GE. More inside.
 

How BizJet Convinced the Justice Department to Go Easy

March 27, 2012

After aviation maintenance company BizJet uncovered potential Foreign Corrupt Practices Act violations, the company reacted swiftly, launching an internal investigation and notifying the Justice Department. The actions earned the company goodwill for "extraordinary cooperation," and a 30 percent reduction in its FCPA fines. More details inside.
 

Targeting the Demand for Facilitation Payments

March 27, 2012

A group of energy companies is banding together to press countries where demand for facilitation payments is high to adopt new practices that combat such requests. Among the solutions the group is pursuing are better documentation of government service fees and procedures, automated payment processes, and more training for officials. The group now hopes to expand beyond its own industry. Details inside.
 

Dealing With JV Compliance Takes Varsity Skills

February 22, 2012

A recent Justice Department FCPA settlement against a participant in an energy joint venture in Nigeria is yet another reminder of how challenging ethics and compliance can be in such arrangements. "The average JV hasn't been around a long time. It probably doesn't have a compliance officer; it doesn't have a lot of processes," says lawyer Jeff Kaplan. A close look at how to establish strong conduct at "JVs" is inside.
 

More FCPA Defendants Opting for Trials Over Settlements

January 10, 2012

Defendants in Foreign Corrupt Practices Act cases are increasingly opting to fight the Department of Justice in court rather than agreeing to prepackaged settlements, and more of them are winning. "For so many years, FCPA enforcement rarely saw the inside of a courtroom. Thankfully, that is beginning to change," says Mike Koehler, a law professor at Butler University.
 

2012 Will Be Another Busy Year in Regulation and Compliance

January 03, 2012

Amid holiday cheers and winter chills, legal experts say 2012 will be yet another busy year in regulation. Inside, we take a look at what's next for the SEC's Office of the Whistleblower, rulemaking under the Dodd-Frank Act, insider trading enforcement, and more.
 

Anti-Corruption Programs Enable Business Agility

December 20, 2011

One of the most frequently asked questions about manag­ing corruption risk demonstrates the compliance profession's passion for benchmarking: "What do companies with the best anti-corruption programs do dif­ferently?" The answer is less about process or technology, at least not directly, than it is about philoso­phy and vision. Inside, our GRC Illustrated series returns with this look at anti-corruption programs.
 

SciClone Raises Standards, and Eyebrows, With FCPA Deal

November 29, 2011

SciClone Pharmaceuticals, a middle-weight drug development business with only 260 employees, struck a memorable blow for corporate compliance this month: The company agreed to profound changes in its anti-corruption program solely to settle a shareholder lawsuit. "I'm not aware of any other case, certainly in the FCPA area, where this sort of result has occurred," says Lucinda Low of the law firm Steptoe & Johnson.
 

Study: Fraud Reporting Hits Record Levels

September 13, 2011

Reports of corporate fraud now account for one in every five calls to compliance departments, according to a new study. The increase is due partly to more fraud, but also to an increase in employees' willingness to report it, say the study authors. "There is more awareness in regard to fraud in the market today and less tolerance," says Glenn Pomerantz, a partner at BDO Consulting. Full details inside.
 

The Dos and Don'ts of Corporate Hospitality

July 26, 2011

Vigorous enforcement of the Foreign Corrupt Practices Act is causing some companies to second-guess their compliance efforts. In the latest example, a company recently asked the Justice Department for an advisory opinion on corporate hospitality questions that had already been clearly answered years ago. The Justice Department's (repeat) answer is inside.
 

Canada Takes Landmark Anti-Bribery Enforcement Action

July 12, 2011

Move over, FCPA—your northern cousin, the Corruption of Foreign Public Officials Act, just took a big step into adulthood. Canadian officials have reached their first-ever plea deal with a company for overseas bribery, and more enforcement is ahead. "For a U.S. company that may have thought anti-bribery was not an issue in Canada ... it is now," Toronto lawyer John Boscariol says. More inside.
 

The BRIC Wall of Anti-Corruption Law

July 06, 2011

Britain's Bribery Act went into effect on July 1, but that's not the only new anti-bribery hurdle compliance departments are facing. Brazil, Russia, India, and China have all either enacted or proposed new anti-bribery legislation, and a slew of other countries have measures in the works. In short, anti-corruption compliance just got a whole lot more complex. Details inside.
 

Lessons From SEC's First Deferred Prosecution Agreement

June 21, 2011

Last month the SEC signed its first-ever deferred-prosecution agreement with a company. The intent of the SEC's DPA is "essentially to create incentives for corporate self-policing, self-reporting, and self-remediations," says John Sturc, partner at law firm Gibson, Dunn & Crutcher. But is self-disclosing your way into a DPA really worth the risk? Not everyone is sure.
 

The Summer of FCPA

June 14, 2011

Enforcement actions of Foreign Corrupt Practices Act violations are intensifying as the summer begins. In May alone, several notable FCPA cases transpired, including the first ever jury conviction of a corporation, the first deferred-prosecution agreement by the Securities and Exchange Commission, and challenges to the law's defining language. Inside, Columnist Bruce Carton recaps the latest.
 

Companies Struggling with Anti-Bribery and Corruption Compliance, Survey Shows

June 02, 2011

A new survey of U.S. and British companies finds that while many are making great strides to improve their fights against corruption, plenty more are still struggling. One telling statistic: 40 percent of respondents who said they train employees on corruption risks don't do the same for resellers or other third parties. More inside.
 

FCPA Officers Aim for Global Anti-Corruption Program

June 01, 2011

Compliance officers at CW 2011 debated the challenges of the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, and mapped out strategies to craft one common anti-bribery policy that could be applied worldwide as more and more risks pile up around corruption and improper payments. The full discussion is inside.
 

Latest FCPA Trial Sheds New Light on State-Owned Companies

May 24, 2011

Executives at Lindsey Manufacturing had hoped to challenge the Justice Department on its assertion that the Foreign Corrupt Practices Act applies to payments made to employees of state-owned entities. The bad news: They lost. The good news: The judge presiding over the case issued a clarification on the issue, which could help defenses in future FCPA cases. Details inside.
 

Fraud Reporting Near Record Levels

May 24, 2011

Employees are reporting more incidents of fraud via whistleblower hotlines, with more than 20 percent of calls relating to fraud, misuse of assets, conflicts of interest, or violations of the Foreign Corrupt Practices Act. Timothy Mohr, a partner at BDO Consulting says that an increase in regulation is "allowing for fraud to be discovered in a more timely fashion." More survey data inside.
 

Justice Department Targets Foreign Documents in Antitrust Probe

May 17, 2011

Defense attorneys are lashing out over an aggressive new tactic by the Justice Department to retrieve foreign documents by subpoenaing them from law firms that are involved in parallel civil lawsuits—which critics say is an over-reach of the department's subpoena power. The matter has split federal courts and is nearly certain to head to the U.S. Supreme Court. Details inside.
 

Companies Lacking in Facilitation Payments Policies

April 26, 2011

An examination of the codes of conduct at 40 oil and gas companies finds that more than half don't address the controversial topic of facilitation payments, and only two prohibit the practice outright. With enforcement of the U.K. Bribery Act—which outlaws such payments—just a few months away, it may be time to review your policy on the topic. More analysis inside.
 

U.S. Execs Lack Bribery Act Knowledge

April 21, 2011

As the July 1 deadline for Britain to begin enforcing its tough new anti-bribery law approaches, many executives in the United States are unprepared. Three-quarters of U.S. business professionals surveyed said they were not familiar with provisions of the Bribery Act, according to research from Deloitte.
 

Lessons From J&J's $70 Million FCPA Settlement

April 19, 2011

Earlier this month Johnson & Johnson settled a Foreign Corrupt Practices Act case with the Justice Department for $70 million. The company scored points for having an effective compliance program, but will now be required to audit its anti-corruption program. It's just the latest case in a crackdown on FCPA violations. Details inside.
 

China Passes Anti-Bribery Law

April 12, 2011

At just two lines of text, China's new anti-bribery law is open for interpretation—but it is certain to complicate corporate anti-bribery efforts. "The government is concerned that corrupt officials are besmirching the good name of the Communist party," says Amy Sommers, national China partner for law firm Squire, Sanders & Dempsey.
 

In Court, FCPA Comes Under Fire

April 05, 2011

The question of whether state-owned companies fall within the scope of the Foreign Corrupt Practices Act is finally getting a hearing in court. Three cases over so-called "foreign instrumentalities" are pending this spring; the question is urgent, Butler University law professor Mike Koehler says, because companies are spending "a lot of wasteful money to comply with a law based [solely] on what the Justice Department says." Details inside.
 

Bribery Act Guidance Retreats, Still Fails to Deliver Clarity

April 05, 2011

The British government has finally given prosecutors the green light to start enforcing the country's tough new Bribery Act starting July 1—and also published eagerly awaited guidance suggesting that the anti-corruption law may not be enforced so toughly. One thing that is clear: Compliance departments looking for clarity are out of luck. Details inside.
 

Anti-corruption Trends: What to Expect in 2011

February 22, 2011

A reminder for compliance professionals who think they've got Foreign Corrupt Practices Act compliance in the bag: Don't forget to do a regular gut check.
 

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