I'm a U.S.-based employer and the Foreign Corrupt Practices Act is not front burner for us. Why should we care?
It's very important that you be aware of the Foreign Corrupt Practices Act, or the FCPA. In many countries, payments that might be viewed simply as "business as usual" may fall under the Act — for example, a payment made to procure a government contract or even to obtain an operating license.
The SEC and the DOJ have dual enforcement jurisdiction. While the SEC is limited to publicly traded companies, the DOJ has a much broader mandate. Both agencies now offer a whistleblower incentive to employees who report violations of the FCPA.
And with a new law, the Foreign Extortion Prevention Act, or FEPA, the DOJ is poised to go after the foreign officials who request the bribes — giving those officials an incentive to throw their own victims under the bus.
The risks are high — any company or individual that violates these laws is subject to massive civil fines and/or criminal prosecution. Not to mention millions spent on investigations and independent monitors.
But there are ways to lower the risk. Create a functional policy. Conduct internal training on that policy. Respond to reports of illicit payments. Be prepared to conduct an internal investigation, if appropriate.
And, be aware of the DOJ's latest initiatives — for example, its updated guidance on credits for effective compliance programs. If a company learns an employee has paid a bribe, and it later takes action to recover associated bonuses or commissions, there can be a reduction in penalties. And even unsuccessful clawback efforts can reduce assessed fines.
So, if any part of your business extends beyond the U.S. borders, review your company's Code of Business Conduct and executive employment agreements.
Implement an effective clawback policy. Having effective policies and procedures in place when a report comes in positions you to act quickly, laying the groundwork for a favorable resolution.
To address your individual concerns around FCPA awareness and compliance, connect with a Littler attorney.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
