The Man From FCPA has advocated that companies doing business in South Africa take stock of their compliance programs, third-party representatives, and business customers in that country based upon the ongoing corruption scandal involving the administration of President Zuma and most particularly the Gupta family. The investigations took an unusual turn when it was recently reported that the South African police raided offices of the country’s ruling party, the African National Congress (ANC). While some will proceed with the facile explanation that the revolution is finally eating its own, The Man From FCPA draws a different lesson for the compliance practitioner.
The FCPA specifically applies to political parties. The African National Congress is therefore a covered entity under the FCPA. The 2012 FCPA Guidance states: “The FCPA’s anti-bribery provisions apply to corrupt payments made to (1) “any foreign official”; (2) “any foreign political party or official thereof ”; (3) “any candidate for foreign political office”; or (4) any person, while knowing that all or a portion of the payment will be offered, given, or promised to an individual falling within one of these three categories.” Although the statute distinguishes between a “foreign official,” “foreign political party or official thereof,” and “candidate for foreign political office,” the term “foreign official” in this guide generally refers to an individual falling within any of these three categories.
For any company doing business in South Africa, all your contacts with the ANC have FCPA implications, even if the persons who dealt with were not in elected or appointed, they are covered under the FCPA. This means all the investigations you might be performing for contracts with the South African government, anything associated with the Gupta family or state-owned enterprises, should be assessed for ANC contacts as well. Three major international companies, SAP, McKinsey and Company and KPMG have all been tagged with problems uncovered in their South Africa operations. In a country such as South Africa, it is a good time to remember that the FCPA covers more than foreign government officials and employees of state owned enterprises.