Bribery and corruption exist in all parts of the world in varying degrees. Regulatory authorities around the world, in increasing numbers, are continuing to investigate and prosecute cases involving bribery and corruption. If you have operations in the U.S. or overseas it’s important to understand international anti-bribery and corruption legislation, such as the U.S. Foreign Corrupt Practices Act (FCPA), U.K.’s Bribery Act 2010 (the Bribery Act), in addition to Canada’s Corruption of Foreign Public Officials Act (CFPOA).
The FCPA and the Bribery Act 2010 are not limited to U.S. or U.K. companies; they can apply to Canadian private companies with global operations. In fact, the majority of the corporations charged in 2010 for FCPA violations were non-U.S. companies. For many multinational businesses, the enactment of the U.K. Bribery Act 2010, which criminalizes private sector bribery and the failure by a commercial organization to prevent bribery, raises the ante. If you have operations overseas, the primary defence from bribery and corruption is to demonstrate that you have adequate anti-bribery compliance procedures in place to prevent fraud.
What does this mean for your business?
In order to obtain an accurate picture of where your company might be vulnerable, ask yourself the following questions:
Does your company operate in countries where bribery and corruption are prevalent?
Does your business operate in an industry that has a reputation for corruption?
Do your employees have significant interaction with government officials in foreign countries?
Do you really know who you are doing business with?
Can you identify the role and benefit derived from third parties involved in transactions?
Do you have a robust gifts and entertainment policy for employees and agents?
Has your company experienced previous incidents of bribery and corruption?
Do you have concerns about the effectiveness of the systems and controls used to prevent or deter the payment of bribes?
Are you considering acquiring a company that has any of the above concerns?
While anti-bribery policies and procedures should be customized for each company, there are common elements to compliance programs that should be considered:
• Setting the appropriate tone at the top;
• Developing a clearly articulated and well-communicated anti-bribery and corruption policy;
• Delivering effective training to employees, agents, and relevant third parties, and requiring certification that they have complied with their responsibilities;
• Performing sufficient and appropriate integrity due diligence on individuals or entities the company plans to do business with;
• Using a risk-based approach to monitor compliance.
Despite your best efforts, allegations of violations may arise. Every business should have a clearly defined response plan that sets out who is responsible for the investigation, the process to be followed, and how the alleged wrongdoer is dealt with. Effective response programs will also set out guidelines for the use of outside counsel and when to involve other third parties, such as professional service firms, that can assist with either the investigation or the authorities.
A comprehensive understanding of the provisions of the CFPOA, the FCPA, and the Bribery Act, along with other anti-bribery and corruption rules and regulations, is critical to the implementation of an effective compliance program to prevent, detect, and respond to the risks of non-compliance with the requirements of these legislations. As worldwide initiatives to combat bribery gain momentum, the effectiveness of anti-bribery and corruption programs should be of paramount importance for all multi-national businesses that may be subject to these laws.
