How Books-And-Records Violations Can Draw An FCPA Charge

Under the Foreign Corrupt Practices Act, regulators often discover corruption indirectly by identifying violations of books-and-records and internal-accounting provisions. What are they looking for?  Here in a post from Ropes & Gray are ten accounting red flags. One standout: multiple payments made to the same third party, at a level just below the established mandatory review amounts. The authors advise companies to intensify their due diligence on all third parties, to include a careful inventory of who that party does business with. Also keep in mind that although the FCPA addresses illicit payments to government officials, that group is broadly defined and includes, for example, employees of public medical facilities, which are common in Latin America.