We advise companies and individuals on issues of compliance with the UK Bribery Act and FCPA issues.Dealing with complex issues of fraud, regulatory compliance and business disputes will detract from your company’s potential. Better management of fraud risk and compliance exposure is a critical business priority in all industry sectors.
We are able to assemble the right multidisciplinary and culturally aligned teams to work with our clients and accountants and investigators. We work alongside US and European lawyers .
On November 14, 2012, the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) jointly released A Resource Guide to the US Foreign Corrupt Practices Act (Guide). This Guide provides help in devising an effective corporate compliance program. In doing so, it sets forth principles that are detailed but very similar to the “Adequate Procedures” guidance issued under the UK Bribery Act and the Organization for Economic Co-operation and Development’s “Good Practice Guidance on Internal Controls, Ethics and Compliance.”
The Guide demonstrates commitment to fighting corruption through continued vigorous enforcement of the Foreign Corrupt Practices Act (FCPA).
After years of requesting additional guidance, the business and legal communities now have a comprehensive document summarising the approach and priorities of the DOJ and SEC in FCPA enforcement. This widely anticipated Guide does not have the force of law but does represent the evolving views of DOJ and SEC from years of enforcement activity and reviews of private and public companies’ anti-corruption compliance programs, this mirrors good UK practice and should be carefully considered by all significant corporate bodies.
The main issues are:
- Global anti-corruption and inter-agency efforts
- Discussion of key anti-bribery elements and accounting provisions
- Affirmative/positive defences
- Principles of enforcement
- Penalties, sanctions and remedies
- Hallmarks of an effective corporate compliance program
Corporate Compliance PlansThe Guide provides “hallmarks” or elements of an effective compliance program. In doing so, it sets forth principles that are perhaps more detailed but very similar to the “Adequate Procedures” guidance issued under the UK Bribery Act and the Organisation for Economic Co-operation and Development’s “Good Practice Guidance on Internal Controls, Ethics and Compliance”. In the UK, the Bribery Act has had minimal impact to date-this is not so elsewhere. The FCPA has significant teeth.
Many elements in the Guide are similar to leading practices adopted by large global companies. The Guide acknowledges that small and medium-size companies will have different compliance plans from large multi-nationals and in doing so, implies that cost and size are factors in measures companies should take to achieve compliance. It endorses the concept of risk assessment as stating that one-size-fits-all compliance plans are generally ineffective because resources inevitably are unavailable.
The main elements of an effective plan are:
- Commitment from senior management and a clearly articulated policy against corruption.
- Code of conduct and compliance policies and procedures — a code of conduct provides ethical guidelines for those conducting business on the company’s behalf. A company may also have specific anti-corruption policies and procedures that address its risks and outline proper internal controls and monitoring procedures.
- Oversight, autonomy and resources — responsibility for the compliance program should be assigned to an appropriate senior individual or group to provide the authority to oversee the program and report to the company’s governing body.
- Risk assessment — a company’s compliance plan should be designed and commensurate with its unique risk profile, taking into account factors such as size, structure, industry, geography, interactions with foreign governments and involvement of business partners. A thorough risk assessment adds efficiency and credibility to anti-corruption compliance efforts.
- Training and continuing advice
- Incentives and disciplinary actions — to avoid the appearance of a “paper program,” the corporate compliance program must be enforced unequivocally throughout the organisation with clear disciplinary procedures for violators applied timely and consistently. Also, positive incentives, both financial and other merit-based rewards, may reinforce a culture of compliance.
- Third-party due diligence and payments — a risk-based due diligence approach identifies and devotes attention to third parties posing the greatest corruption risk. The guidance highlights three areas to govern dealings with third parties from pre-contract due diligence efforts to payment terms and ongoing monitoring of third-party relationships.
- Confidential reporting and internal investigation — employees and third parties should be encouraged to share tips or suspected violations in a secure and confidential manner. Significant issues should ultimately be investigated by qualified individuals.
- Continuous improvement: periodic testing and review — companies may perform periodic testing or anti-corruption audits to monitor compliance with the various elements and controls of the program and to uncover existence of potential violations and red flags signalling new corruption risks.
- Pre-acquisition due diligence and post-acquisition integration — an acquirer is responsible for conducting thorough due diligence of a target company, which extends to evaluating possible corrupt activity by the target.
Our business compliance lawyers deal regularly with the Financial Compliance Authority (FSA) and international regulators – contact us for specialist help and advice.