Aug 2009 Foreign Corrupt Practices Act (FCPA) investigations and enforcement actions have spiked in the last several years. Penalties have grown appreciably, with the largest settlement to-date reaching $1.6 billion and criminal prosecutions landing executives in jail. This new anti-corruption era is forcing companies and their executives to change their behaviours to adapt to greater financial, reputational and personal risks. How well companies prepare for geopolitical risk and anti-corruption compliance could make or break the viability of doing business in a desired region.
Corruption crackdown analyses FCPA risks faced by multinational corporations and discusses the impact of conducting business in countries where bribery has been both rampant and a standard business practice. We consider what boards of directors, legal counsel and management can do to minimize their exposure to regulatory risk and explores how companies that build in aggressive and thorough anti-corruption compliance measures are better positioned to compete internationally.
Key trends in the report include:
- The number of FCPA cases and severity of penalties will likely continue to increase as the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) work through a backlog of up to an estimated combined 200 cases;
- The onus- and the expense- of FCPA compliance will continue to be placed upon companies to dedicate greater resources to anti-corruption initiatives, including due diligence, during mergers and acquisitions;
- International harmonization of antifraud and anti-corruption regulation will lead to more parallel investigations, with the likely consequence of increased penalties;
- FCPA investigations will likely continue to trigger other actions such as shareholder litigation, tax investigations and money-laundering probes; and
- Individuals are likely to face increased scrutiny when regulators are investigating potential FCPA violations.
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Corruption crackdown: How the FCPA is changing the way the world does business (pdf file, 1.56MB) for your reference.
