Foreign Corrupt Practices Act Compliance Guidebook Protecting Your Organization from Bribery and Corruption

by Biegelman, Martin T.; Biegelman, Daniel R.

• ISBN13: 9781118268292
• ISBN10: 1118268296
• Edition: 1st
• Format: eBook
• Copyright: 2012-03-30
• Publisher: Wiley

Summary

Foreign Corrupt Practices Act Compliance Guidebook shows readers how the Foreign Corrupt Practices Act (FCPA) has grown to critical importance to any U.S. company that does business in a global environment, as well as foreign companies that supply or have agency agreements with U.S. companies. It provides an overview of the business risks and guidance on spotting potential red flags regarding FCPA violation. Business professionals are provided with practical guidance on managing FCPA requirements as part of an overall compliance program.

Author Biography

MARTIN T. BIEGELMAN has been fighting fraud and corruption for more than thirty-five years in various roles in law enforcement, consulting, and the corporate sector. He is currently Director of Financial Integrity for Microsoft Corporation, where he built and leads a worldwide fraud prevention and anti-corruption program. He is the author or coauthor of several books including Building a World-Class Compliance Program, Executive Roadmap to Fraud Prevention and Internal Control, and Identity Theft Handbook, all from Wiley.

DANIEL R. BIEGELMAN is an attorney with the law firm of Baker Hostetler. He is a member of the Litigation Practice Group in their New York office. Daniel is a Certified Compliance and Ethics Professional and a member of the Society of Corporate Compliance and Ethics. He is a contributing author to Building a World-Class Compliance Program: Best Practices and Strategies for Success (Wiley). He is also the author of articles on the FCPA and corporate compliance.

Table of Contents

Foreword.

Preface.

Acknowledgments.

1 BRIBERY, CORRUPTION, AND THE FOREIGN CORRUPT PRACTICES ACT.

Global Crackdown.

Devastating Cost of Corruption.

Government’s Commitment to FCPA Enforcement.

FBI’s Laser Focus on Anti-Corruption.

Watergate and the Birth of the FCPA.

Securities and Exchange Commission Enters the Fight.

Senate Investigations.

Kissinger’s Resistance.

Lockheed’s Defiance.

Questionable Corporate Payments Task Force.

FCPA Enactment.

Compliance Insight 1.1: First FCPA Prosecution.

Criticism of the FCPA.

A Culture of Compliance.

2 OVERVIEW OF THE FOREIGN CORRUPT PRACTICES ACT.

FCPA Provisions.

Leveling the Playing Field.

Antibribery Provisions.

Jurisdiction.

Facilitating Payments.

Affirmative Defenses.

FCPA Elements Summary.

Compliance Insight 2.1: Metcalf and Eddy Civil FCPA Settlement.

Books, Records, and Internal Controls Provision.

Books and Records Elements Summary.

Sarbanes-Oxley and the FCPA.

Opinion Procedure.

Penalties.

Third-Party and Successor Liability.

Compliance Insight 2.2: Self-Disclosure Follows M&A Activity.

Why Corruption Matters.

Compliance Insight 2.3: Afghanistan: A Case Study in Corruption.

Increased Enforcement.

3 GOVERNMENT GUIDANCE AND SIGNIFICANT CASES.

Filip Memorandum.

FCPA Compliance Programs: Case Law Guidance.

A Lesson in Overseas Compliance.

Compliance Insight 3.1: Rogue Employee Does the Crime, Company Does the Time.

Cold Cash: U.S. v. Jefferson.

Voluntary Disclosure.

Evaluating the Seaboard Criteria in Mitigating Enforcement Actions.

Compliance Insight 3.2: Appointment of Corporate Monitor Results in Charges of Cronyism.

Selecting a Monitor: The Morford Memo Standards.

Thought Leader in Corporate Compliance: George Stamboulidis.

Government Procurement Fraud and the FCPA.

Federal Acquisition Regulations Disclosure Requirements and the FCPA.

Business Ethics Awareness and Compliance Program.

4 GLOBAL ANTI-CORRUPTION EFFORTS.

Globalization of Law Enforcement Cooperation.

International Antibribery Efforts.

OECD Convention on Combating Bribery.

Inter-American Convention Against Corruption.

European Union Convention on the Fight Against Corruption.

African Union Convention on Preventing and Combating Corruption.

Council of Europe Criminal Law Convention on Corruption.

United Nations Convention Against Corruption.

United Nations Global Compact.

Canada’s Corruption of Foreign Public Officials Act.

Compliance Insight 4.1: INTERPOL Fights Corruption.

International Anti-Corruption Organizations.

Transparency International.

Corruption Perceptions Index.

Compliance Insight 4.2: 2009 Corruption Perceptions Index: Top 20 Countries.

Compliance Insight 4.3: 2009 Corruption Perceptions Index: Bottom 20 Countries.

Other Transparency International Resources.

Compliance Insight 4.4: Foreign Bribery Enforcement in OECD Convention Countries.

Compliance Insight 4.5: Foreign Bribery Cases and Investigations.

Compliance Insight 4.6: Status of Foreign Bribery Cases.

World Bank.

International Monetary Fund.

Asian Development Bank.

World Trade Organization.

Partnering Against Corruption Initiative.

Thought Leader in Corporate Compliance: Alan Boeckmann.

Global Anti-Corruption Enforcement Trends.

The Good Fight Against Corruption.

5 SIEMENS: A NEW COMMITMENT TO A CULTURE OF COMPLIANCE.

Company Overview and History.

The Road to Corruption.

Munich Public Prosecutor’s Office Investigation.

Self-Disclosure and Subsequent Internal Investigation.

Legal and Fair Internal Investigation.

Project Office Compliance Investigation.

Amnesty and Leniency Programs.

Cooperation with Law Enforcement.

Compliance Comeback.

Criminal Charges, Plea Agreements, and Fines.

Compliance Insight 5.1: Key Elements of Siemens’ Compliance Program: Prevent–Detect–Respond.

New Corporate Compliance Program.

Corporate Compliance Monitor.

Siemens’ Remedial Efforts.

Replacement of Top Management.

Comparison of Old and New Compliance Programs.

Clear Reporting Lines.

Training and Communication.

Anti-Corruption Training Program.

Anti-Corruption Handbook.

Ombudsman Program.

Strengthened Internal Audit Function.

Enhancing Internal Controls.

Enhanced Policies and Procedures.

Compliance Insight 5.2: Enhancement of Policies and Procedures.

Compliance Helpdesk.

Anti-Corruption Toolkit.

Compliance Insight 5.3: Siemens’ Anti-Corruption Toolkit Focus Areas.

Business Partner Review and Approval.

Supplier Code of Conduct.

Compliance Insight 5.4: Business Partner Review and Approval Process.

Corporate Disciplinary Committee.

Compliance Element of Senior Management Compensation.

Compliance Progress Report.

Compliance Insight 5.5: Siemens’ Compliance Progress Report from Q2 FY 2009.

Becoming a Recognized Leader in Compliance.

Compliance Insight 5.6: Siemens’ Compliance Objectives for 2009.

Partnering with the World’s Anti-Corruption Community.

Partnering Against Corruption Initiative.

Business Guide on Fighting Corruption.

The Road Forward.

6 WORLDWIDE HOTSPOTS FOR CORRUPTION: UK, RUSSIA, AFRICA, THE MIDDLE EAST, AND LATIN AMERICA.

Overview.

Thought Leader in FCPA Compliance: Scott Moritz.

The Natural Resource-Corruption Link.

UK Tackles International Corruption.

Compliance Insight 6.1: Weak Internal Controls Leads to Fine for Insurance Giant.

UK Bribery Bill.

Mabey & Johnson Prosecution.

Strong Message from the SFO.

Russia.

Doing Business in Russia.

Africa.

Nigeria.

Middle East.

The Oil-for-Food Scandal.

Compliance Insight 6.2: Companies Implicated in Oil-for-Food Scandal.

Iraq Today.

Latin America.

Cases of Corruption.

Multinational Company As Victim.

7 WORLDWIDE HOTSPOTS FOR CORRUPTION AND BRIBERY: CHINA, CENTRAL ASIA, INDIA, AND ASIA PACIFIC.

China.

The Dangers of Agents: Avery Dennison.

Heightened Anti-Corruption Enforcement Efforts in China.

Corruption and Societal Discontent.

Criminal Law of the People’s Republic of China.

Company Law of the People’s Republic of China.

Anti-Unfair Competition Law of the People’s Republic of China.

Invitation and Submission of Bids Law of the People’s Republic of China.

Interim Provisions on the Prohibition Against Commercial Bribery Acts.

China Enforcement Agencies.

Commission for Discipline Inspection of the Communist Party.

Supreme People’s Procuratorate of the People’s Republic of China.

Ministry of Public Security of the People’s Republic of China.

State Administration for Industry and Commerce of the People’s Republic of China.

The Dangers of Doing Business in China.

Central Asia.

‘‘Mr. Kazakhstan’’.

Head in the Azeri Sand.

Baker Hughes.

India.

Asia Pacific.

Indonesia.

Vietnam.

South Korea.

Taiwan.

8 BAE SYSTEMS: PAST BEHAVIOR HAUNTS THE COMPANY.

Al Yamamah Deal.

Compliance Insight 8.1: Suspicious Activity Report, January 30, 2004.

FBI Scrutiny.

BAE’s Denial.

Serious Fraud Office Inquiry.

Tony Blair Quashes the Investigation.

DOJ’s Hard-Line Approach.

BAE Response.

Compliance Insight 8.2: Types and Numbers of Calls to BAE’s Ethics Helpline.

Woolf Committee.

BAE Follows a Different Path.

9 DESIGNING AN EFFECTIVE ANTI-CORRUPTION COMPLIANCE PROGRAM.

Federal Sentencing Guidelines for Organizations.

The Seven Steps to an Effective Compliance Program.

DOJ Guidance on Anti-Corruption Compliance Programs.

Compliance Program Design.

Red Flags and Risk Areas.

Department of Justice’s FCPA Red Flags.

Red Flags When Doing Business With Third Parties.

Travel and Entertainment.

Gifts.

Mergers and Acquisitions.

Compliance Insight 9.1: Inherent Compliance Risk in Acquisitions and New Business Lines.

Autonomous International Business Units.

Don’t Ignore Small Payments.

Facilitation Payments.

Corrupt Payments.

Anti-Corruption Design Never Ends.

Thought Leaders in FCPA Compliance: Joseph Spinelli, Scott Moritz, and Jay Perlman.

10 IMPLEMENTING AN EFFECTIVE ANTI-CORRUPTION COMPLIANCE PROGRAM.

Anti-Corruption Standards and Procedures.

Training and Communication.

Red Flags Training.

Anti-Corruption Training Best Practices.

Compliance Insight 10.1: Driving Home the Impact of Corruption.

Delivery Methods for Training.

Specific Anti-Corruption Reporting Mechanism.

Communicating the Compliance Program.

Evaluating Your Anti-Corruption Training Program.

M&A Due Diligence.

Risk Assessments.

Thought Leader in FCPA Compliance: Leslie McCarthy.

Internal Accounting Controls.

Role of Internal Audit.

Anti-Corruption Audit Program.

Other Compliance Program Best Practices.

Field-Based Compliance Officers.

FCPA Enforcement Database.

Benchmarking 261.

Commitment to Anti-Corruption Compliance Programs 261.

Compliance Insight 10.2: Sample Compliance.

Activities Checklist.

11 MONSANTO: FIGHTING CORRUPTION FOR A BETTERWORLD.

A Commitment to Agriculture.

DOJ and SEC FCPA Investigation.

Acceptance of Responsibility and Remedial Actions.

Compliance Insight 11.1: Monsanto Compliance Program Overview.

Tone at the Top and a Revamped Code of Conduct.

Messages from Senior Leaders.

Business Conduct Office.

Training.

Regional Working Groups.

FCPA Working Group Guidelines.

Compliance Insight 11.2: Monsanto Business Conduct Policy Employee Guidelines.

Gifts, Entertainment, and Other Promotional Expenditures.

Per Diem Payments.

Facilitating Payments.

Political Donations.

Charitable Donations and Donations to Governments.

Trade Associations.

Doing Business with Foreign Officials and Their Relatives.

Dealing with Third Parties.

Training Third Parties.

Joint Ventures.

Contractual Safeguards and Oversight.

Audit.

Opinion from Outside Counsel.

Local Law Advice.

Response to Possible Violations.

Internal and Independent Investigations.

Internal Coordination and Training.

The Monsanto Pledge.

12 INTERNAL INVESTIGATIONS.

Consequences of Failing to Act.

Preparing for the Investigation.

Preserving Documentary and Electronic Information.

Assembling the Investigative Team.

Investigations Code of Conduct.

Investigative Plan.

Conducting Interviews.

Thought Leader in Internal Investigations: David Z. Seide.

Employee Legal Representation.

Interviewing and Reporting.

Employee Cooperation with Company Investigations.

International Investigations.

Anti-Corruption Enforcement Trends.

Siemens Internal Investigation Approach.

Determining Systemic Corruption and FCPA Violations.

Self-Disclosure of FCPA Violations.

Compliance Emergency Preparedness Kit.

13 PAST, PRESENT, AND FUTURE OF THE FCPA.

The Past.

The Present.

Thought Leader in FCPA Compliance: Marjorie Doyle.

Corporate Ignorance Is Not Bliss.

It’s Not Rocket Science.

On the Horizon.

The Future.

Battling the Disease of Corruption.

Appendix OPINION PROCEDURE RELEASES.

About the Authors.

Index.