A Checklist for FCPA Compliance

The Foreign Corrupt Practices Act contains two key provisions: (1) a prohibition on bribery of foreign officials and (2) accounting and reporting provisions for companies registered with the Securities and Exchange Commission. The Department of Justice has made headlines using this powerful law.

If your company operates overseas, review the following aspects of your business: Identify the nature of your business and all sectors in which you operate; identify all nations in which you operate and/or engage in commerce; research the Corruptions Perception Index published by Transparency International for each nation in which you operate and/or engage in commerce; identify all public/governmental agencies to whom you market and/or sell products and services; inventory the strengths and weaknesses of your corporate internal controls; identify all executives and employees responsible for compliance with federal statutes and regulations; revisit record keeping and accounting procedures for international transactions to ensure accurate characterization of all expenditures; implement an anonymous hotline for employee concerns with measurable follow-up and accountability; review employee compliance training annually; and develop a relationship and exchange of information with knowledgeable external legal counsel.

The fundamental questions prosecutors ask when assessing a corporate compliance program are: Is the corporation’s compliance program well designed? Is the program being applied earnestly and being implemented effectively? Does the corporation’s compliance program work in practice? The points listed above will help you react to potential violations effectively.