FCPA Compliance | NAVEX Global

Challenge of addressing FCPA Compliance

The U.S. Foreign Corrupt Practices Act (FCPA) aims to combat bribery and corruption. It establishes liability for corporations regarding bribery payments and third-party oversight. The U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) both aggressively enforce the FCPA to encourage fair business practices on a global scale. The DOJ expects a risk-based compliance programme that applies greater resources and due diligence for the areas at highest risk in your organisation. In addition, senior management is expected to go beyond internal controls by creating a tone from the top that embeds a culture of FCPA compliance throughout the organisation.

Fines for FCPA violations frequently are in the hundreds of millions of dollars category with the heftiest fine nearing $1 billion. The company is not the only entity at stake when violating FCPA compliance. Individual employees across all levels of the organisation can be hit with civil enforcement actions that can result in significant civil penalties as well as disgorgement of profits gained from corrupt practices. Since 1977, FCPA has been one of the most prominent anti-corruption acts facing organisations and continues to remain a significant concern to ethics and compliance programmes globally.

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What you need to comply with the Foreign Corrupt Practices Act

Code of Conduct & Compliance Policies

Policies regarding internal controls, auditing practices and documentation, anti-bribery measures must exist, along with the burden of proof that employees attested to key policies

Effective Training on FCPA guidelines

Periodic training is necessary for all directors, officers, relevant employees, and agents/business partners in the local language

Third-Party Due Diligence

A business rationale for using the third party, initial due-diligence and ongoing monitoring of third-party relationships should all be documented

Confidential Reporting & Investigation

Employees and others should have a mechanism to report suspected or actual misconduct or violations of policies without fear of retaliation

Incentives & Disciplinary Measures

Appropriate disciplinary actions and modifications of internal controls need to be fairly and consistently applied to prevent misconduct

Continuous Improvement & Review

Benchmarks and internal measurements of compliance programme effectiveness should be regularly reviewed to prove best practice intentions and results

Steps You Can Take to Meet FCPA Compliance Requirements

Step 1: Make sure your policies and procedures create effective internal controls that guide employee behaviour as well as create sufficient documentation of transactions

Step 2: Offer multiple whistleblower reporting methods, including a compliance hotline to encourage employees to identify and report potential FCPA violations. Resolving violations internally can protect companies from significant financial and reputational damage.

Step 3: Train the right people on the anti-bribery and corruption practices to mitigate risks of non-compliance with applicable laws and regulations.

Step 4: Be the first to know when third-party or vendor behaviour may put you at risk for FCPA violations. Automated, continuous third-party due diligence is critical.

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