Although it’s been around for nearly 40 years, the Foreign Corrupt Practices Act (FCPA) is still a source of confusion and trouble for corporate, multilingual investigations. This isn’t too surprising given that the law encompasses a wide range of activities and persons, and that significant updates to the text can change its contents radically (the most recent of these changes was ratified in 2012). But the largest factor in the FCPA’s ability to cause real damage for an international organization has to be its global scope and global jurisdiction.
I’ve discussed before how an experienced language service provider can href=”https://www.unitedlanguagegroup.com/translation-legal-compliance-ethics/”target=”_blank”> help prevent multinational cases as well as make them easier. But I wanted to take a closer look at some common misunderstandings of the FCPA that have cost companies hundreds of millions of dollars just in the last decade.
Globalization has made it inevitable that protections like the FCPA exist. There are ways to prepare yourself, your organization and your organization’s practices to better ensure that you are fully compliant. But true preparedness is impossible if there is no full understanding of the FCPA. When assessing your company’s preparedness and anti-corruption policies, there are a few things you should always remember.
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The FCPA was one of the first acts of its kind in terms of its scope. To prevent corrupt practices in international business, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) aren’t limited to the borders of the U.S.
U.S. citizens and nationals outside the U.S. can be prosecuted. Companies can be found responsible for illegal activities that happen anywhere around the globe. This means that a company can be prosecuted for the actions of their international employees, independent contractors, or even third party vendors.
Everyone who comes into business with your company – employees of your global offices, vendors and temporary contractors – has to conduct thorough due diligence and be fully cognizant of your company’s anti-corruption and bribery policies.
A Bribe Can Be Many Things
When you first hear the word bribe, the first thing that comes to your mind may be a large amount of money being handed underneath a table. But the FCPA understands the ways U.S. businesses and foreign officials can come to illegal agreements. In the FCPA’s definition of a bribe, money does not have to change directly between the hands of high-up officials.
Many multilingual investigations have begun because organizations didn’t understand the broadness of the FCPA’s definitions. Bribes can come in the form of gifts or entertainment. They can be donations to political parties, or meals, or smaller amounts of money passed to government personnel without much direct influence. Even certain charitable donations have been found to be illegal.
Additionally, there is no requirement of materiality in the FCPA. This means that in place of hard proof of international bribes, inconsistencies or inaccuracies in a company’s books can be taken as evidence. If there is an intention to exchange materials to grease palms in international business dealings it’s illegal under the terms of the FCPA.
Here again is where due diligence is key. One of the best defenses against a potential investigation is accurate bookkeeping. Fully training your employees and partners, all around the world, can stop a multilingual investigation before it starts.
The Policies and Practices of Other Countries Still Apply
In the wake of the FCPA, other countries have also ratified their own international anti-corruption laws which apply to any organization doing business within their borders. Along with checking your compliance with the FCPA, it’s imperative to follow the letter of the law in every country in which you conduct business.
Other things to consider are disparate legal practices, which vary from country to country. If you’re undergoing some multilingual investigation in China, for example, you should know that communications with both outside and in-house counsel are not protected under any form of attorney client privileges. In most European companies, communications with in-house counsel is also not confidential.
Understanding such differences in practice and policies will prevent crucial mistakes down the line. Admittedly, it’s a lot to keep track of. But that’s cost of doing global business.
Prevent and Prepare for Multilingual Investigations
It’s important to be fully prepared for the possibility of a large, multinational legal investigation and understand that solutions and resources exist. Understanding the FCPA and other anti-corruptions law can prevent a huge amount of trouble for you and your organization.
The FCPA is not a fundamentally unknowable document. With knowledge and some readiness, it is possible to work with these laws and policies to make for better ethics and better business.
This is part 5 of Jay Rosen’s 6 part series on legal investigation. Check out part 4 and part 6.
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