COUNSELLING BOARDS OF DIRECTORS, BOARD COMMITTEES AND SENIOR MANAGEMENT THROUGH FCPA INVESTIGATIONS

As enforcement of the US Foreign Corrupt Practices Act (FCPA) has increased, yielding ever greater fines and penalties and more severe collateral consequences for businesses under investigation, the role of overseeing an FCPA investigation, particularly a case that is already under investigation by the Department of Justice or the Securities and Exchange Commission, has become more challenging. Yet effective oversight is critical to obtaining the best outcome of the case.

An FCPA issue usually involves some benefit (for example, a payment, gift or entertainment) that is provided improperly or corruptly to a government official in order to obtain some commercial benefit, typically a contract but it could also be a tax benefit or regulatory authorisation or permit. The FCPA issue comes to light in a company because it is identified during some regular corporate process like an internal audit or compliance review‎ or is brought to management’s attention through a whistleblower. Once the company is on notice, the proper handling of the issue is vital to managing it to the best outcome. Typically, proper handling will require some form of investigation to identify and compile the evidence relevant to the FCPA issue. Once the evidence is evaluated, decisions about possible violations of company policy or law, or both, can be made and then proper remediation can be undertaken. 

Apr-Jun 2014 Issue

Baker & McKenzie