The holidays are when blurred lines and merriment come together to take the edge off validating kickbacks, and in some cases, just plain bribery. Going beyond season tickets to ball games, the scope for corruption and bribery has breached borders and taken an international stage. The argument that it’s impossible to operate your business without some leeway on kickbacks and bribery in countries that are on the road to economic progress, but not quite there yet, is one that the FCPA renounces loud and clear.
The stats support the FCPA’s unflinching stand on the matter: in 2009, the total penalties imposed by the Department of Justice and the SEC stood at $622 million. The figures marched up to $1.8 billion dollars in 2010. The math here is a huge indication of FCPA’s enforcement not just within the U.S. but in American global ventures as well.
When the Obama administration pushed for an increase in U.S. exports, businesses both big and small reached out to other markets and for more offshore support services. The challenge, as always when working with countries that have a developing economic ecosystem, is sustaining in those markets where the modus operandi for a business is very different from what it is within U.S shores.
Countries that are highly prone to bribery in government offices: India, Mexico, China, Brazil. Countries where the corruption quotient would turn the radar haywire: Russia, Nigeria, Vietnam, Iraq, Afghanistan. The Foreign Corrupt Practices Act does not restrict itself to businesses alone – the length and breadth of the Act encompass third party service providers and business partners who may be acting on your behalf elsewhere. In which case, you run the dire risk of being stranded in an unknown realm.
If you are staring with some confusion at the bottle of wine that a vendor dropped off for you, here are a few other areas of broader concern you should get to at the earliest:
- Kicking off the list with the most essential – an FCPA compliance program for your business – one that is well-acknowledged from the top down.
- Hire an external firm to do risk assessments where the market is not a familiar one and to find out areas where your company could be at risk.
- Third party FCPA non-compliance is a huge threat, so understand the channels that you function through and your international distribution systems.
- Don’t fall prey to the facilitating payments exception that the FCPA allows – delegating decisions about working within FCPA’s parameters to your sales staff onsite may not be a good idea.
- Small and mid-sized businesses with little understanding of conducting international internal investigations need to get up to speed fast.
- International contracts need to clearly cite FCPA compliance terms.
Whether your operations remain within the country or go global, the FCPA regulations are a huge part of your business ethics and compliance. But with that in place, a glass of wine may not be a bad idea after all. Cheers! Merry Christmas and here’s to a compliant New Year!