If your company conducts business overseas—selling products or services into different markets and/or creating its products in other countries—then the company needs to comply with the Foreign Corrupt Practices Act (FCPA), the United Kingdom Bribery Act (UKBA), and other similar bribery laws in other countries. In our global economy, companies are increasingly reliant on complicated international supply chains and business development representatives. Understanding who your third parties are—and how they do business—is critical.
FCPA Penalties in 2019 Poised to Shatter Previous Records
2019 is on track for record penalty amounts under the Foreign Corrupt Practices Act, a trend that should be on the radar of any organization that does business internationally. Companies paid out $2.89 billion in 2018 to settle cases initiated under FCPA, and the penalty amounts for 2019 show a dramatic upward shift. Meanwhile, the DOJ and the SEC have gone after eight individuals, in addition to corporate defendants.
Companies face a growing spectrum of scrutiny. The SEC’s Division of Enforcement is tapping into social media to amplify its enforcement actions. The agency has started using #SEC and other hashtags to publicize enforcement actions to a wider audience. Gone are the days of a limited press release. The SEC and DOJ are exponentially increasing their reach and publicity of enforcement actions by regularly using Twitter.
With prison sentences for the culpable business leaders and the government settlements in the tens if not hundreds of millions of dollars, FCPA risk is one of the most significant business compliance risks. We’ve collaborated with our FCPA expert, Professor Mike Koehler, to create an easy six-step checklist to identify and avoid possible FCPA risks.