Federal investigations can be intimidating. They can be time consuming and menacing. That’s why you should always ensure that you are FCPA compliant. To be on the safer side, stay up to date on all matters of FCPA compliance. Invest in FCPA programs. Attend seminars. Go to conferences. Have clear internal controls. These are the things that will ensure that you are FCPA compliant. The following quick facts are all you need to beat the FCPA compliance hurdles.
Introduction
Over the years, countries around the globe have been enacting laws that forbid corruption by the business. Such acts make it a criminal offense to receive a bribe for business purposes. FCPA forbids you from receiving corruption money to conduct business in any given country. Nowadays, you must have FCPA compliance to engage in international business.
Ephemeral Messaging Platforms
When considering FCPA enforcement action, the SEC (Securities and Exchange Commission) often takes into account an organization’s cooperation with the investigation, their remediation actions, as well as, their compliance program.
Previously, FCPA compliance guidelines required organizations to utilize ephemeral messaging apps like Wechat and WhatsApp. But the most recent FCPA compliance guidelines permit the use of disappearing messaging apps as long as the company implements appropriate control systems to ensure that the platform effectively retains business records. Companies should also establish procedures guaranteeing the retention of business records and training employees on those procedures. It’s also important that your organization complies with its document preservation policies with respect to the messaging apps.
Interview Coordination
Updates to the FCPA compliance program also clarify the deconfliction policy. Most companies perceive de-confliction as a way for the Department of Justice (DOJ) to control investigations.
But the good news is that the enforcement policy now indicates that de-confliction is only applicable to circumstances where it’s requested and appropriate. So, the DOJ won’t directly interfere with your company’s internal investigations. Although the Department, where necessary requests that an organization refrains from taking specific actions for a limited period of time, due to de-confliction, it won’t take any measures to affirmatively direct your company’s internal investigation efforts.
Pre-Acquisition Based On Due Diligence
It’s always important for acquiring companies to establish a strong compliance program. This will go a long way in helping them obtain full credit. If your company cooperates and self-discloses misconduct, then criminal charges won’t be brought against them. A company’s voluntary disclosure, proper due diligence, as well as, implementation of appropriate compliance can go a long way in reducing the chances of an enforcement action.
Sharing Employee Information
Today, companies seeking FCPA compliance don’t need to share information about employees who’re connected to the alleged misconduct. This allows them to keep some privacy whilst still prioritizing the pursuit of employees who violated the law. The Department of Justice (DOJ) gives companies credit for performing detailed and accurate investigations with clear documentation.
Compliance Checklist
The FCPA is a federal law that’s specifically formulated to prevent American companies from making corrupt payments. Business consultants, joint-ventures, third-party business partners, as well as distributors are also subject to FCPA’s anti-corruption provisions. Plus, the FCPA policy also applies to foreign organizations with subsidiaries in the U.S that conduct business in America, or whose transactions are made through the U.S banking system.
Aside from the anti-corruption provision, the FCPA also includes specific accounting transparency guidelines. These requirements mandate that every organization that reports to the SEC maintain accurate records and set up a system of internal controls.
Companies that fail to comply with the FCPA requirements could be hit with huge fines and individuals could be imprisoned. Essentially the DOJ (U.S. Department of Justice) and the SEC are jointly responsible for enforcing the FCPA anti-bribery law.
Contents of An FCPA Compliance Checklist
To help organizations devise effective compliance programs, the FCPA requires a compliance program to include various aspects, including:
- A well-documented policy that prohibits FCPA violations, as well as, other anti-corruption laws.
- Clear communication of the compliance program policies plus procedures. And these should include detailed information about proper internal controls, documentation policies, and auditing practices.
- A commitment from your company’s top management that trickles down through the corporation.
- Regular assessment of third-party members, including business partners. Take time to educate them about your company’s compliance program plus the code of conduct.
- Encouragement of employees to adhere to the company’s FCPA compliance policies and procedures. You can easily achieve this by offering compliance incentives.
- It’s also important to note that employees in charge of oversight must separate from the management team and have adequate resources for implementing the compliance program appropriately.
- A strategic whistle-blowing mechanism based on confidentiality that allows employees to safely report possible FCPA violations. After an internal investigation, your company should always update its compliance program plus internal controls.
- – As a company, you should also be able to review and update the FCPA compliance regularly. Given that the business environment is constantly evolving, you should always be vigilant. Make sure that both your compliance program and the internal controls are up to date.
Risk Assessment
Before drafting your company’s compliance program, it’s always important to start by conducting comprehensive risk assessments. The assessment should identify key risk areas. And these include where your company has significant dealings with foreign officials, business units operating in highly corrupt countries, and locations where anti-bribery concerns have been spotted in the past.
The SEC and the DOJ aren’t usually responsible for establishing the requirements of a compliance program. And that’s mainly because different companies have different business needs. So, each company will be required to devise its own FCPA compliance program based on its sizes, as well as, risk exposure.
The Bottom-Line
If you love your company, stay away from FCPA violations. Let your organization conduct a clean business. Adhere to FCPA regulations. Don’t engage in corrupt practices. Have clear controls. Your bookkeeping should be spotless. Remember, the regulations keep on changing. So, staying up to date is very important. The above are key things you should know about FCPA compliance to beat hurdles.
