Global Compliance and FCPA: 20 Ideas from Thomas Fox for Playing by the Rules

Columnist's Note - I was honored and humbled to find this post wherein the Corporate Law Report collected twenty ideas I have set forth in my blog postings over the past couple of years. I was honored because someone else thought my postings were of note. I was humbled because the editor laid it out much better than I ever could have done. I ask and received permission to reprint it, in its entirety.

Today’s post brings together some of the collected writings of Foreign Corrupt Practices Act attorney Thomas Fox, who provides regular updates on a wide variety of global compliance topics aimed at businesses seeking to operate profitably, legally and ethically around the world:

1. Whatever business you are in, the requirement is for you to understand what laws are applicable to your business. If you have to hire local lawyers in the jurisdiction where you are doing business … don’t whine about it, hire them.

2. Identify the requirements of anti-corruption laws in all the countries in which your company does business. This is critical in understanding the key differences in requirements that your company may be facing.

3. If there are serious allegations made concerning your company’s employees engaging in criminal conduct, a serious response is required. Your company needs to hire some seriously good lawyers to handle any internal investigation.

4. One the criticisms of the Foreign Corrupt Practices Act (FCPA) is that it provides little guidance as to what constitutes an instrumentality under the Act and attendant question of who is a foreign governmental official.

5. While many companies here in the US complain about the enforcement of the Foreign Corrupt Practices Act … just imagine how they might feel about paying a multi-million dollar fine for a situation in which no bribery was proven.

6. Just imagine how many jobs that Avon could have created if it had not engaged in "possible" FCPA violations and did not have to spend north of $100 MM to internally investigate these "possible" FCPA violations.

7. These steps need to be taken by all US Companies entering into, or already engaged in, a relationship with an Agent as the FCPA applies to all US Companies, whether public or private.

8. If the inherent message of the C-Suite is to make quarterly or other numbers, and the pressure is solely on that issue, the Board needs to understand that a train wreck may be coming.

9. Many of us who came to compliance through a corporate legal department simply think that explaining a project logically is sufficient and expect it to be accepted, that is certainly our training. However, in the Compliance Department there may be a greater need to request funding for new project as the parameters of a best practices compliance program expands.

10. As much as companies try to make all employees conform to one compliance program across the world, it is simply not possible to do so. … Customs and relations are different across the globe. There needs to be some cultural sensitivity.

11. Mehra and Agbool argue that a strong internal compliance program should be an integrated part of corporate social responsibility. They believe that businesses should be able to identify and mitigate against bribes and corruption … to keep markets competitive and to ensure that their activities are benefiting the societies in which they operate.

12. One of the purposes of the compliance assessment is to determine if any new elements of an effective compliance program have been developed in the past year and if they should be incorporated into your company’s compliance program.

13. So the lesson learned from News Corp’s 56 page B+ rated Code of Conduct is that such a Code is worthless unless trained upon and actually implemented by management.

14. … self-disclose, clean house, remediate and implement a best practices compliance program and your company may well be able to extricate itself without landing on the "Top Ten of All Time FCPA Settlement List".

15. Nortz has put together a cogent process to utilize when bringing a group of non-compliance professionals together. A Chief Compliance Officer who is attempting to co-op or obtain company-wide buy-in to help solve a compliance issue may well wish to utilize some or all of these techniques.

16. … what can you do as a Law or Compliance Department member to facilitate the creation, implementation and sustainment of a strong ethical culture, where such initiative is not found in the company leadership, and play with the weak compliance hand you may have been initially dealt.

17. In addition to supporting internal investigations, I believe that HR can be … a key component in changing or maintaining your company’s compliance DNA.

18. In addition to the area of discipline which may be administered after the completion of any compliance investigation, you must also place compliance firmly as a part of ongoing employee evaluations and promotions.

19. While I do not believe that most Compliance Departments will face the PR disaster that United has had to endure over "United Breaks Guitars", the failure to have a fair and equitable process for managing employee compliance complaints … can lead to very serious financial consequences

20. The Board must have quarterly or semi-annual reports from a company’s Chief Compliance Officer to either the Audit Committee or the Compliance Committee.

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