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Bribes and Corrupt Practices belong to the past

September 29, 2015 by
Filed under: Compliance Management

The Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act each legislate and prohibit bribing other persons, being bribed or bribing a foreign public official (this includes trying to bribe) and have a wide jurisdictional impact on companies with even limited UK or US-based activities. Further, the FCPA also has a second provision which prohibits an organization reporting to the SEC from having false or inaccurate books or records or to fail to maintain a system of internal accounting controls.

In 2013, a survey of 350 companies worldwide was conducted by Dow Jones. 71% of the respondents stated that they recently stopped or delayed working with a business partner due to concerns about not complying with anti-corruption regulation. This is an increase of nearly 20% from four years ago. There is still a long way to go if we look at the current FCPA fines (all from within the past 5 years). The information below is publicly available and can be found with limited browsing.

  • Siemens (Germany), $800 million
  • KBR/Halliburton (US), $579 million
  • BAE (UK), $400 million
  • Snamprogetti (Netherlands/Italy), $365 million
  • JGC Corporation (Japan), $218.8 million
  • Daimler (Germany), $185 million
  • Alcatel-Lucent (France), $137 million
  • Magyar Telekom (Hungary), $95 million
  • Panalpina (Switzerland), $81.80 million).

How we think companies can comply to the Anti-Bribery Act most effective?

Risk Assessments

Companies must assess the risk of FCPA violations in their international business. These assessments should be performed periodically international business operations change and can include additional factors such as the CPI-Index to create a prioritized list of businesses that need additional attention when providing foreign payments.

Anti-corruption compliance policy

Institute a requirement for a standalone international anti-corruption compliance policy including an "Executive" who is responsible and accountable for the "tone at the top." When performing international business, your organization should know its 3rd parties and what roles they perform for your organization. The classification of 3rd parties before payments are made is very important to make sure bribes are prevented.

Internal Control over expenditures and assets

Make sure your company is keeping books and records which document all transactions in an accurate manner. This can help you prevent and detect corrupt payments.

Transaction monitoring

To raise red flags not only based on the manual assessments and / or reviews and FCPA pre-approvals but also by analyzing payment behavior in all countries to 3rd parties flagged as possible government officials, automated transaction monitoring is required. BWise offers capabilities to integrate the BWise® GRC Platform and the components mentioned above with your transactional systems.

Want to learn more?
BWise recently hosted a webinar together with PWC: Real-Time Prevention of Corruption with BWise® Continuous Monitoring. Request the recording.

References:

http://www.dowjones.com/pressroom/docs/AC_Brochure_v2.pdf
http://www.gsk.com/reports-and-publications.html?tab=tabpublic-policies
http://www.fcpablog.com/

Tags: Compliance

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