By Jeffrey M. Kaplan
In 1991, the U.S. government established a compelling and original model for promoting legal compliance by businesses. The federal sentencing guidelines applicable to organizations — sometimes called the Corporate Sentencing Guidelines — offered companies both strong incentives for implementing compliance and ethics (“C&E”) programs and meaningful guidance on how to do so. But until recently only a small number of other nations had followed this lead.
That changed dramatically with the recent issuance of anti-bribery compliance recommendations by an OECD working group representing 38 nations (the “Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions”). In U.S. Guidelines-like fashion, the Recommendation provides that “member countries should encourage . . . companies to develop and adopt adequate . . . [C&E programs] or measures for the purpose of preventing and detecting foreign bribery. . . . .”
The OECD Recommendation goes even further than the U.S. Guidelines regarding the “why” of C&E, by specifying that such countries should consider in some instances C&E programs “in their decisions to grant public advantages, including public subsidies, licences, public procurement contracts, contracts funded by official development assistance, and officially supported export credits.”
The Recommendation also offers guidance for the “how” of anti-bribery compliance. This includes, as one would anticipate, expectations concerning anti-bribery policies, training, internal controls, reporting systems, discipline for violations, compliance incentives, accountability for program management and program assessments. There is also considerable emphasis on third-party compliance measures. In fact the suggested measures resemble in many ways those from the U.S. Guidelines, recently summarized in the FCPA Blog’s post Pop Quiz.
What may be of greatest interest to C&E officers and those who practice C&E law is the potential for this U.S. Guidelines-like approach to be expanded globally beyond the anti-bribery realm. This very real possibility is based on the fact that aspects of the Recommendation speak in a general (i.e., not anti-bribery specific) way to the need for C&E programs, and also on the experience of an Italian corporate criminal law being expanded beyond its original anti-corruption focus to cover areas such as insider trading compliance.
Download the OECD’s Recommendation for Further Combating Bribery of Foreign Public Officials released December 9, 2009 here.
Download the OECD’s Good Practice Guidance on Internal Controls, Ethics and Compliance dated February 18, 2010 here.
Download the U.S. Federal Sentencing Guidelines, Chapter 8 (Sentencing Organizations) here.
Jeffrey M. Kaplan, a partner at Kaplan & Walker LLP, has practiced in the compliance program area since 1991. He can be reached at [email protected]. Together with his partner Rebecca Walker, who is also a contributor to the FCPA Blog, Jeff is currently writing a chapter for the BNA/ACC Compliance Manual on Compliance with the Foreign Corrupt Practices Act.