@Risk

Despite growing awareness and appreciation of the risks of non-compliance, only about one in four companies feel ready to meet the requirements of the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act (UKBA), according to new survey results from Kroll Business Intelligence and Investigations.

The study, which polled more than 1,200 senior executives from a broad range of industries worldwide, found that:

• Just 27 percent of survey respondents said they are well-prepared to comply with FCPA and UKBA.
• Of those companies subject to these two laws, just  43 percent have trained senior management, agents, vendors and foreign employees to be compliant with one of these laws. Even less (39 percent) have assessed the risks arising from them.
• More than one-third (37 percent) believe their due diligence provides a sufficient understanding of a potential partner’s of investment target’s compliance with these acts.

Clearly, companies need to step up their game. Not only are the risks of non-compliance quite serious (and getting more so), but fraud is on the rise. Knoll’s new research also showed that: (more…)

The US Department of Justice, the Securities and Exchange Commission and the FBI have joined forces on a rigorous anti-corruption campaign, and they’re cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

Many have already felt the heat. Last year federal agencies initiated a record number of FCPA enforcement actions. Plus, the penalties associated with FCPA violations have become increasingly severe.

Who’s the most at risk?

That’s a tough question to answer, of course, knowing that the US government is targeting not only a company’s employees, but also its agents, contractors, investors and suppliers. In my estimation, supply chain and procurement executives of all multi-national corporations now face distinct risks and business challenges.

If you’re looking for an in-depth analysis of recent trends in anti-corruption enforcement, check out the new report from international law firm Chadbourne & Parke LLP.

The Chadbourne Compliance Quarterly Special Report, authored by partner M. Scott Peeler, reviews the circumstances surrounding 61 individuals who were the subject of government-initiated civil or criminal action alleging FCPA violations over the past six years. Interestingly, the study found that: (more…)

Federal agencies are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

The US Department of Justice, the Securities and Exchange Commission and the FBI are joining forces on a rigorous anti-corruption campaign, targeting not only a company’s employees, but also its agents, contractors, investors and suppliers.

It appears that Pharmaceutical and Life Sciences companies are at the top of the DOJ’s list for investigations, and a leading firm in this sector recently agreed to pay $70 million in FCPA penalties. However, supply chain and procurement executives of all multi-national corporations now face distinct risks and business challenges.

In general terms, the FCPA consists of two core elements:

• The anti-bribery provision, which prohibits companies from giving money, gifts, or anything of value to obtain or retain business.
• The internal records and process standards provision, which requires companies to keep accurate records and maintain clear, detailed and adequate controls with employees and trading partners (including suppliers, intermediaries and subsidiaries) to protect against improper payments or influence.

Even though relationships between suppliers and other business entities are often opaque and difficult to track, too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal regulators. Today, lack of evidence to verify proper, compliant management of these trading relationships is itself a cause for investigation. In fact, companies having no knowledge of corrupt payments can be prosecuted even if they were aware of potential warning signs and consciously failed to conduct due diligence and implement controls.

What can you do to mitigate your risk?

For starters, get informed.  Aravo is hosting a one-hour webinar next Wednesday, June 29, 2011, at 9am Pacific (12 pm Eastern) so you can hear how leading pharma companies are working to ensure compliance with FCPA.

Please join us and our featured speaker William Barry, of Richards Kibbe & Orbe LLP, and learn best practices for FCPA program design and tracking around:

(more…)