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Foreign Corrupt Practices Act – Avoid Missteps


Second Quarter 2015

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by Andrew Masini, CPA, CIRA and William Monks, CPA, CFF, CVA

CohnReznick was recently invited by Corporate Disputes Magazine to comment on the state of prosecution under the Foreign Corrupt Practices Act (FCPA). Our article, “What’s in a Word? Reading Caution into the Foreign Corrupt Practices Act,” appears in the April-June edition and offers an opportunity for us to remind our clients and other executives of the need for a comprehensive compliance program to mitigate FCPA-related risk. The article focuses on the following observations:

First, the FCPA should not be seen as a standalone item to address on the way to compliance. This Act is part of a web of growing international laws addressing corruption including the Sarbanes-Oxley Act, the Bank Secrecy Act, anti-money laundering regulations, and the UK Bribery Act.

Second, amid this web, the FCPA distinguishes itself as a particularly vexing body of legislation. As we state in the article, “(i) the FCPA is a broadly written set of statutes; (ii) the broad writing is coupled with a history of aggressive interpretation by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ); and (iii) litigation is risky and not cost-effective; consequently opportunities for judicial review potentially limiting application of the Act have been few.”

Third, certain standard compliance measures – such as anti-corruption training, due diligence, foreign transaction advisory services, internal controls, and internal auditing – can be adapted and updated to address these issues.

Fourth, while there may be good reasons to focus on this subset of components at times, they do not function in a vacuum. They act in concert with the complementary components of a compliance program: policies and procedures, anti-corruption provisions in agreements, oversight of compliance by a senior person, consistent disciplinary measures, a whistleblower hotline and exit interviews. It is a comprehensive compliance program that best positions a company for protection from FCPA issues.

Read “What’s in a Word? Reading Caution into the Foreign Corrupt Practices Act."

Contact

For more information, please contact William Monks, a CohnReznick director, at william.monks@cohnreznick.com or 732-590-3948, or Andrew Masini, senior manager, at andrew.masini@cohnreznick.com or 732-635-3137.


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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