Classic military strategist Helmuth von Moltke the Elder said, “No plan survives contact with the enemy.” In addition to its application on the battlefield, this lesson is good to keep in mind during anti-corruption due diligence as well.
Outside counsel recommend that companies conduct due diligence on third parties (as discussed by FCPAméricas here). But what if the third party pushes back? What if a contractor declines to provide financial statements or curriculum vitae for its top sales personnel? What if a customs broker refuses to include anti-corruption compliance language or audit rights in a contract? Or if a distributor is unwilling to fill out a questionnaire?
One of the most important elements of a robust compliance program is training. As mentioned in the Resource Guide to the FCPA, “DOJ and SEC will evaluate whether a company has taken steps to ensure that relevant policies and procedures have been communicated throughout the organization, including through periodic training.”
Moreover, simply conducting training is not enough. The Resource Guide mentions that “regardless of how a company chooses to conduct its training, the information should be presented in a manner appropriate for the targeted audience.” FCPAméricas has previously discussed training here, here, and here...Read more
When considering FCPA liability, companies need to factor in not only the potential fines and penalties associated with a violation. They also need to consider the costs associated with a government investigation, costs that are often overlooked but can be considerable.
FCPA investigation costs regularly climb into the millions of dollars. While Stryker paid just over $13 million in its settlement with U.S. authorities, it also spent a reported $75 million on its investigation. (That matter included transactions in Argentina and Mexico, among other countries, described by FCPAméricas here.) Avon has spent $340 million on its investigation that has involved Argentina, Brazil, and Mexico, among other countries. Willbros spent more than $10 million on...Read more