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Tag >> FCPA
Nov 17

Chamber proposes reforms to FCPA

Posted by Karen1 in US ChamberOECDJustice DepartmentFCPA


In "Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act," the US Chamber of Commerce' Institute for Legal Reform offers its suggestions for improving the law. The report contends that even as enforcement of the FCPA has jumped over the past five to ten years, whether measured by settlement sizes or the number of actions taken (as noted in this earlier post) "judicial oversight and rulings on the meaning of the provisions of the FCPA is still minimal." Instead, because the Department of Justice both brings FCPA charges and controls the disposition of FCPA cases, it essentially serves as both prosecutor and judge in the matters, the report says.

In addition, even law-abiding companies incur significant costs to implement comprehensive compliance programs. Many also forego opportunities in light of what they see as ambiguities within the regulations.

Nov 02

US loses ground in global Corruption Perceptions Index

Posted by dbedell in Transparency InternationalOECDforeign corrupt practices actFCPAcorruption Perceptions Indexcompliance


The 2010 Corruption Perceptions Index—put together by non-partisan global organization Transparency International—was released last week, and the United States has slipped in the rankings.

Most of the top 20 is made up of European names, with a few notable additions. New Zealand and Australia are both in the top 20, along with Singapore, Hong Kong, Japan and Barbados. And Qatar came in at number 19.

Jul 22

FinReg bill could lead to more bribery cases

Posted by Stephen Taub in whistleblowerforeign corrupt practices actfinancial reform billFCPAcompliance

Stephen Taub

Warning to Corporate America: Brace for a surge in bribery accusations.

The whistleblower provisions of the financial regulation bill signed by President Obama on Wednesday could lead to an increase in enforcement of the Foreign Corrupt Practices Act (FCPA), says law firm Morrison & Foerster.

As Ron Fink noted earlier, the new financial reform bill has four provisions strengthening whistleblower rights, including financial incentives and legal protection against retaliation.

Jul 02

Corrupt practices enforcement ramps up

Posted by Karen1 in UKSecurities and Exchange CommissionFCPADOJ

According to the Global Enforcement Report 2010, the US leads the rest of the world when it comes to enforcing what are known as outbound bribery cases. These are instances in which corporate execs based in a particular country try to bribe foreign officials in order to gain business. In fact, the US could claim credit for 76 percent of the 515 cases pursued between 1977 and 2010. The UK, which was next line, accounted for only 4 percent of total cases. The report was prepared by TRACE International, a non-profit association that provides anti-bribery compliance solutions.
Given these numbers, it may seem surprising for the US to actually be stepping up its efforts in this area. However, that's exactly what's happening. "The Department of Justice's appetite for pursuing these types of cases is only increasing," says Jeff Taylor, Ernst & Young's leader in fraud investigation and dispute services for the Americas. The DOJ is adding several prosecutors dedicated to pursuing violations of the Foreign Corrupt Practices Act, or FCPA, Taylor adds.
Similarly, the SEC created a new unit focused on FCPA cases, headed by Cheryl Scarboro. The primary mission of the unit is to be more proactive in enforcing the provisions of the FCPA, Scarboro said earlier this year.

Several goals are driving the intensified efforts behind FCPA enforcement, Taylor said. For starters, the agencies' past efforts have largely succeeded. That, in itself, is providing the motivation to build on the record.
Moreover, the efforts send a message that there is a proper way to do business, no matter where in the world a transaction may take place. That's not to say that business practices don't vary from one area to another - obviously, they do. However, the practice of, for instance, paying officials to perform an administrative task, can easily morph from a legitimate transaction to one that seeks special treatment for the company. "There are some exceptions, but they're fraught with peril," Taylor notes.
Perhaps most importantly, the US is trying to use its dominant role among world economies to foster an environment in which most companies and governments play by the rules. That way, those who do follow the rules aren't left at a disadvantage and those that would stray are more leery of getting caught by the FCPA or similar regulation in another country. In the long run, all benefit.
While progress is slow, momentum is heading in the right direction. One sign: in April, the United Kingdom passed the Bribery Act 2010. Among other goals, the Act will "help tackle the threat that bribery poses to economic progress and development around the world," according to this summary by the UK's Ministry of Justice.

May 30

The three biggest risks you face

Posted by SherylNash01 in risks, IT Security, government regulationsFCPAcareer/managementbribery


What will cost CFOs' the most sleep in the second half of the year? Risk experts say corruption abroad, information security and government regulation are most likely to keep you awake.

The US isn't the only  country cracking down on bribery and other forms of corporate corruption in foreign markets. Consider the UK, where a new law takes effect later this year. Like the Foreign Corrupt Practices Act of the US, it applies to any company doing business in the country, but the UK law is broader and easier to trigger, experts say.

May 26

Crackdown on cronyism adds risk to foreign M&A;

Posted by SherylNash01 in foreign M&A;FCPAemerging marketsdue diligencecareer/management


Companies looking to grow through acquisitions in emerging markets may have more risk to discount: the likelihood of prosecution for bribery arising from such deals seems to be growing. And that suggests they need to do more due diligence on such deals or pay less for a target than they would otherwise.

As we reported earlier,  the Department of Justice and SEC initiated 40 Foreign Corrupt Practices Act related actions in 2009, up from 33 in 2008. Criminal and civil corporate fines this year already exceed $400 million, a pace that would exceed the $645 million that companies paid last year.

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