Looking back, I guess you could say any predictions that FCPA prosecutions would go by the wayside over the last four years were incorrect, as the number of cases brought and penalty amounts have been high and the spotlight on the exposure of global corporations to corruption unwavering.
That proactive stance is not about to change, so multinational corporations in the United States need to ensure that their workforce understands what constitutes a corrupt practice under the FCPA.
That very task requires the translation of codes of conduct and other in-house rulebooks into multiple languages.
Ideally, companies also create training programs (completion of which is required by regulatory mandates and hopefully in-house rules) that are put into all of the languages spoken by the business’s employees, contractors, and business partners.
And they create whistleblower hotlines enabling speakers and writers of an array of languages to report their concerns.
This constitutes best practice because it is not enough that a U.S.-based multinational company distributes documents about the FCPA’s rules, responsibilities, and obligations in English if any number of employees cannot fully understand those reference materials.
This means translating or “localizing” such things as codes of conduct, anti-bribery policies, general anti-corruption policies, third-party due diligence checklists or questionnaires and contracts given to business partners that include attestations related to FCPA compliance.
Consider two FCPA cases brought in 2016 — Akamai Technologies and Nortek Inc. — back when the Department of Justice called its cooperation credit program a pilot program. The DOJ was just starting to explain the incentives it would offer businesses if they met certain standards for voluntary self-disclosure, full cooperation, and timely and appropriate remediation.
That June, the Securities and Exchange Commission (SEC) announced non-prosecution agreements with two companies that were ordered to forfeit ill-gotten gains connected to bribes paid to Chinese officials by foreign subsidiaries.
The SEC concluded that the companies’ internal controls at that time were insufficient to prevent or detect the conduct. The SEC also noted the need for more employee compliance training and criticized the businesses for not translating anti-corruption policies into Chinese.
The agency then explained why it was extending cooperation credit to these businesses at the penalty stage by noting they had-reported the FCPA-related misconduct and voluntarily translated documents from Chinese into English for SEC investigators.
So the failure to translate policy documents and training tools was a strike against the company. Still, the provision to SEC personnel of translated pieces of written evidence during the SEC’s investigation ended up helping the businesses earn some cooperation credit.
Translating compliance-related documents into local languages enables businesses to show they take the actual understanding of the FCPA policy seriously and are not just content to say they have one (in English).
And helping the regulator translate relevant pieces of evidence helps everyone involved conduct a targeted and efficient FCPA investigation.
I’m mindful that even in a country known as monolingual, U.S. companies within their domestic operations employ persons for whom English is a second language and who might prefer (and better understand) complex ideas explained in their native language.
And when it comes to doing business in a far-flung geography where the company does not have a local presence, having advanced knowledge of the languages, dialects, and cultures of the country and community is necessary to ensure successful communications.
The regulators are watching how companies address these challenges as the amount of interaction among businesses worldwide grows, and communications move increasingly virtual among absolutely everyone.
Author’s note: I do not receive any compensation from or have any ties to a language-translation company, nor do I speak any language besides English. Useless to help with that task, I just see a potential area of weakness that is worth checking up on.
Hi, Julie, you raise good points. If you don’t translate the materials how will people understand them? I hope this message reaches a broad audience and that people pay attention to your wise advice.
However, one point you might want to modify. You say that having codes, training and a helpline available for different languages is “best practice.” But you would not want to suggest that those three things alone were themselves best practice or worthy of credit from the government as if they were enough to be considered a compliance program. These have a place in compliance programs, but alone they are not a compliance program.
For the program to work you need all the elements connected with the Sentencing Guidelines and other government standards. These include strong management commitment and actions that back this up; a compliance risk assessment; a strong, independent chief ethics and compliance officer; using and addressing incentives to promote the program; and evaluating everything in the program, including the training and code, to see if they are effective. For a helpline you need an active effort to prevent retaliation. And in the case of multinational operations, there should be compliance champions in the various locations. Indeed, if you want to be sure the translations are accurate, having a local presence to provide feedback is essential.
Absolutely, compliance messages need to be translated. But if the program is just paper and preaching, even in the local language, it will not meet the standards expected by DOJ and the SEC and will not hold up in the fight against corruption.
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