The past several years have seen a 400 percent increase in the number of prosecutions under the Foreign Corrupt Practices Act (FCPA), as well as a dramatic increase in the penalties that individuals and corporations must pay to resolve claims. Although the number of enforcement actions in 2011 was down from the record-setting levels of 2009 and 2010, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) continue to actively pursue FCPA enforcement. At the same time, the bar for corporate compliance programs has been raised, anticorruption efforts have become more global, and individuals are increasingly being held accountable for corporate compliance failures.
The number and nature of prosecutions in 2010 and 2011 underscore the intense focus the DOJ and SEC now place on FCPA compliance. The past two years saw:
- Continued focus on prosecuting both individuals and corporations;
- Large corporate penalties averaging in the $20 million to $30 million range;
- Emphasis on and high expectations for corporate cooperation; and
- Increased focus on enforcement in Silicon Valley and companies doing business in Asia.
In addition, whistleblower incentives passed by Congress as part of the Dodd-Frank Act are expected to lead to an uptick in FCPA-related enforcement actions. We can also expect active enforcement of the UK Bribery Act, which became effective in July 2011 and applies to any events after July 1, 2011.
Given the increased emphasis on FCPA enforcement, any U.S. company (regardless of its size or whether it is publicly traded) that conducts business overseas, and any foreign company that trades on a U.S. exchange or is operated by U.S. officers or directors, should implement a comprehensive compliance program to help prevent bribery and avoid exposure under the FCPA, the UK Bribery Act and other applicable anticorruption laws.
This 50 page guide is intended to serve as a general primer for executives, general counsel, compliance officers and sales personnel of companies that conduct business internationally.