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As FCPA enforcement gets tougher, compliance demands bold measures

As I recently wrote for the Accelus Regulatory Intelligence subscription service, bold measures are required of multinational firms to stay in compliance with the FCPA. Firms need to know not only what all of their divisions and employees are doing, but what their subsidiaries and vendors are doing.

This is especially true as regulators in other countries begin to bring their own bribery enforcement actions, alone and in tandem with U.S. authorities.

In 2014, the Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) resolved FCPA cases with 10 companies for a whopping total of $1.56 billion. That ranks second in total financial penalties only to 2010, when 23 companies were charged and fined.

Two of the corporate enforcements in 2014 — against Alstom, a railway systems and equipment developer, and Alcoa Inc., the world’s third-largest producer of aluminum — made it to the FCPA Blog’s list of the top ten enforcement actions of all time.

The government continues to pursue companies in industries including technology, military equipment and cosmetics, and from a mix of nations. Three of the top ten FCPA enforcement actions involve French companies.

Authorities are charging corporate officials individually. In 2014, six individuals settled FCPA offenses with the SEC and six pleaded guilty to DOJ charges.

FCPA enforcement has shown a significant increase in cross-border collaboration between United States regulators and their foreign counterparts, thanks to more and stronger foreign bribery laws abroad and increased information-sharing among law enforcement agencies.

At the Global Anti-Corruption Congress in June 2013, then-Acting Assistant Attorney General Mythili Raman noted that increased foreign involvement in international bodies like the Organisation for Economic Cooperation and Development’s Working Group on Bribery shows that “we are cooperating with foreign law enforcement on foreign bribery cases more closely today than at any time in history.”

The Serious Fraud Office (SFO) is pursuing a British subsidiary of Alstom and two individuals, and the company has been investigated by authorities in Switzerland and Brazil as well.

In investigating Alcoa, DOJ and SEC cooperated with law enforcement agencies in Switzerland, the UK, Canada, Lichtenstein, Norway and Australia, as well as the UK’s SFO.

Regulators remain focused on matters in which foreign officials receive improper payments through third-party intermediaries. Even interns can be the subject of a regulatory examination, as BNY Mellon and JPMorgan Chase have discovered.

Some best practices for corporate compliance professionals to keep in mind include developing clear corporate codes of conduct including anti-bribery provisions that are part of all new-hire orientations, with proof of participation by all employees, including top executives.

The firm should make sure its internal controls are designed to prevent or at least promptly detect evidence of bribery or cover-ups. And firms should invest in the tools that could help it track pending investigations, new regulations, sanctioned individuals and other bad actors, plus perform full audit of its anti-corruption protocols on itself and its business partners and suppliers.

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A longer version of this article was originally published on the Accelus Regulatory Intelligence subscription service offered by Thomson Reuters and geared to compliance, risk and legal professionals in the financial services industry.


Julie DiMauro is a contributing editor of the FCPA Blog. She works in the Governance, Risk and Compliance group at Thomson Reuters in New York where she serves as a regulatory compliance specialist. She can be reached at [email protected].

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