Tis’ the Season for Corrupt Business Practices

Twas’ the week before Christmas, and all across the globe, back room dealings were happening, even as the DOJ initiated a probe. With the company seeking that contract, execs sent a guy nicknamed “Santa” to bat, but ethics questions abound, as the global economy has made anti-corruption pacts.

In the last several years, global legislation has gone into place to avoid bribery and corruption. The United States has long had the Foreign Corrupt Practices Act (FCPA), which prohibits corrupt payments to foreign officials. However, foreign countries have gotten on board, enacting legislation that is stricter and without the defenses available by the FCPA. Indeed, laws like the U.K. Bribery Act of 2010 prohibit businesses from failing to prevent bribery, and the provision extends to the private sector as well as the public realm. Accordingly, the risks of breaking the rules have never been greater, and implementing global anti-corruption training programs has leapt to the forefront of business necessity for 2015 and beyond.

Many domestic companies use outdated models of avoiding corruption, or worse yet do nothing at all. If your business is operating in the global market it is essential that you learn the distinctions between the FCPA and U.K. Bribery Act, as well as other laws enacted in emerging nations that have extraterritorial reach. Importantly, the U.K. Bribery Act applies to entities and individuals who do business in that territory, which means it applies to many U.S. Corporations with offices in the U.K.

With the holiday season upon us, many companies take the time to send gifts to corporate partners. Unfortunately, under many of these laws, if gifts are sent to the wrong people or for the purpose of gaining a business advantage you could be open to civil and criminal penalties. Indeed, corporate hospitality, the reimbursement of expenses, charitable donations, and other forms of payment can cross the line between ethical conduct and corruption. In order to avoid getting into hot water it is essential that your managers, executives and employees understand the intricacies of what they can and cannot do in the business development realm.

Corruption boils down to dishonest activity in exchange for business gain. While many companies that are prosecuted domestically and abroad go into negotiation with honest and ethical intentions, they can frequently cross the line unintentionally. By the time they realize they have done something illegal it is often too late. In addition to the legal penalties associated with corrupt business practices, the overall cost of doing business in foreign countries increases and business reputation can suffer serious damage. Accordingly, it is best to take adequate measures to prevent corrupt activity altogether. Indeed, doing so is one of the few defenses available under the U.K. Bribery Act’s failure to prevent provision!

Conducting ethical business practices and avoiding compliance traps is a fine line, especially when international laws are involved. Syntrio can help train your managers on the nuances of both the laws and ethical conduct that will help formulate an effective plan for conducting business in foreign markets. Contact www.syntrio.com for more information and remember to follow us on Twitter, Google Plus and LinkedIn for daily updates on employment law and compliance that impact your business!