Prevention of Bribery and Corruption Critical in the Global Economy

Bribery and corruption are serious issues facing businesses competing in an increasingly global economy. For years, businesses have been concerned with domestic prosecution for violations of the Foreign Corrupt Practices Act (“FCPA”) abroad. However, as times have changed and the economy has become more global, new laws and statutes are impacting the way U.S. businesses must conduct themselves at home and abroad.

It’s Not Just the FCPA Anymore

Anyone engaging in business dealings with foreign officials or international entities must abide by global anti-corruption laws such as the FCPA, the U.K. Bribery Act, legislation arising from the International Organization for Economic Co-Operation & Development (“OECD”) and emerging legislation in Brazil, Russia, India and China (the “BRIC” nations). Failing to understand and observe these laws can result in illegal business practices and expose individuals and their organizations to civil or criminal penalties.

It is Impossible to Understand the Details of New Legislation Just by Reading the News

If you are authorized to negotiate contracts with or make payments to foreign officials and other global entities, it is essential that you understand the key provisions of global anti-corruption laws and ensure you make informed decisions and maintain compliance in all business dealings. Simply reading news articles covering enormous penalties does not provide the basis for why the violations leading to those penalties, and therefore does not provide the foundation for determining how best to prevent running afoul of international and domestic laws. This is where training comes in.

Prevention of Bribery and Corruption Courses Have an Impact

Rather than just provide a synopsis of the law, Syntrio’s bribery and corruption courses take the user through real-world scenarios designed to teach the finer points of anti-bribery and corruption laws that trip up even the most savvy of managers and executives. Indeed, there are limited situations where payments to government officials and other private parties are perfectly acceptable (even when it seems they would not be). By walking the user through scenarios detailing the laws themselves and the exceptions thereto, your managers are better equipped to understand what is and is not acceptable conduct when dealing in the global marketplace.

There is More to Worry About than Just Huge Fines

Global anti-corruption laws of course contain stiff monetary penalties for making bribes and corrupt payments. However, many of these laws include criminal penalties calling for those who are directly involved to serve jail time. For this reason alone, it is extremely important that you prepare your managers and executives with the knowledge necessary to maintain the ethical line and avoid corrupt payments. Failing to do so could result in the entity later being sued by the individual who claims he or she was just acting on the guidance of the company.

Contact Syntrio to Learn More About Courses Covering the Prevention of Bribery and Corruption

Syntrio’s representatives are ready to show you more about our new prevention of bribery and corruption course. If you feel you need would like a program tailored to your specific industry and specific issues therein we can also create a custom course just for your business.

Contact www.syntrio.com for more information and remember to follow us on TwitterGoogle Plus and LinkedIn for daily updates on employment law and compliance issues that may impact your organization!

 

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!

Complying with the Foreign Corrupt Practices Act (FCPA)

Is your organization complying with the Foreign Corrupt Practices Act (“FCPA”)? If you are like many executives, business owners and/or managers, you may not even know what this law is, nor that it prohibits certain forms of payments to foreign government officials.  You also may not know that substantial penalties (including jail time) are imposed if your business fails to comply with FCPA requirements.  

What is the FCPA? 

The FCPA, 15 U.S.C. § 78dd-1 et seq., is a United States criminal law that prohibits bribery of foreign government officials and requires companies to maintain accurate records.  The FCPA was enacted for the purpose of outlawing certain classes of persons from making payments to foreign government officials for the purpose of obtaining new business or retaining existing business.   All United States companies are subject to the FCPA, regardless of where they are doing business. 

The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls. 

Who is Charged with Enforcing the FCPA and What Are the Penalties for Violation of this Law? 

Enforcement of the FCPA is a priority for the US Department of Justice, the Securities and Exchange Commission (SEC) and many foreign governments.  Penalties for violating the FCPA are severe, and include the following: 

 Corporation:  

  • $2 million criminal fine per violation or twice the gain (in reality, fines can be tens of million of dollars); 
  • Debarment (co. cannot do business with the government); 
  • Disgorgement of profits from unlawful business; 
  • Expensive investigations and legal fees; and 
  • Terrible press coverage. 

Individual:  

  •  up to 5 years in prison per violation (in some recent cases, jail terms have been even higher due to multiple violations); 
  • $100,000 criminal fine per violation; 
  • $10,000 civil penalty or gross gain; 
  •  The fine shall not be paid, directly or indirectly, by the company; and 
  • Loss of job.  
Online Training to Prevent FCPA Violations 

Training managers and anyone in your organization that does business with foreign officials on the provisions of the FCPA is essential to protect them and the company from accusations of illegal business practices.   

Syntrio, Inc. specializes in providing business Ethics and HR Compliance Training.  Contact us today at 888-289-6670 to learn more about our FCPA: Anti-Corruption and Bribery course.