This article was reprinted with permission
from FCPA Professor
Survey says, an editorial, I'll second that, and
spot-on. It's all here in the Friday roundup.
The recently issued Kroll / Compliance Week Anti-Bribery
and Corruption Benchmarking Report was based on responses from "nearly 300
executives" and "participants hailed from all manner of industry."
Survey findings of note.
"Was the FCPA Guidance any help? Nearly
53 percent rated the guidance as "a good read, but it didn't tell me anything
new." Another 23.5 percent deemed it very helpful, 18.8 percent didn't know,
and 4.6 percent said the guidance actually left them more confused."
Regarding third parties:
Financial Times Editorial on Bribery Act
I was pleased to speak to the Financial Times in
connection with its recent Bribery Act editorial. It stated in full as
Government Needs to Clarify Application of
Britain was once considered a laggard in the international
battle against corruption. The Bribery Act, which came into force in 2011, was
the first overhaul of anti-corruption laws in almost a century. Two years on,
the government wants to review it. This is sensible, as new legislation can
have unintended consequences. But any review should not result in a weaker law.
That would only allow greater scope for graft.
The government is responding to complaints from small and
medium-sized businesses that the costs of compliance are too high. In
particular, they are worried about the ban on facilitation payments, small
amounts paid to officials to expedite services such as visas or customs checks.
Businesses argue that Britain holds its companies to a higher standard than
other countries - particularly the US, where such payments are not banned. They
say this puts them at a disadvantage.
These concerns are understandable, but exaggerated.
Facilitation payments have always been illegal in the UK. Yet conflicting
signals from the authorities have sown confusion. Moreover, the absence of case
law leaves companies in the dark as to how the law will be applied and
what defence is valid. This has created a climate in which companies easily
fall prey to firms peddling overly-prescriptive and costly advice on compliance.
More can and should be done to clarify the circumstances
under which a company will be pursued. This will help to counter the
scaremongering that has led some businesses to pass up export opportunities. To
be fair, the guidelines already allow some flexibility for smaller businesses.
They are not expected to use the same procedures as big multinationals. When
choosing an agent to open a new market, for example, it might be sufficient to
verify business references, conduct an internet search and refer to the local
chamber of commerce or UK embassy, as long as the anti-corruption policy is
widely enough disseminated. The government's duty is to ensure resources are
sufficient to meet such requests.
Authorities must also be consistent. Businesses will not
respond to demands that breaches be reported if they fear they will be
prosecuted for any and all transgressions.
British companies have other competitive advantages to
win business with than bribery. Graft is an evil that blights developing
economies and the companies which resort to it. The Bribery Act does not need
changing. It just needs supporting.
I'll Second That
Earlier this week in a Wall Street Journal editorial
titled "Mum's the Word About SEC Defeats" Russ Ryan (Partner, King
& Spalding and former Assistant Director of the SEC Enforcement
Division) stated as follows. "Like other federal agencies, the SEC
has long been good at publicizing its initial accusations of wrongdoing - which
is fair enough - but not so good at letting the public know when those
accusations turn out to be unfounded or an overreach." As Ryan rightly
noted, in this internet age, "SEC publicity is permanent and widely
dispersed. The regulator's accusations can persist indefinitely among the
top search-engine results for the names of those accused."
I'll second that and have previousy written about the
same dynamics Ryan highlights under the heading "Writer's Cramp at
the DOJ." See prior posts here and here.
Conry (Ropes Gray) stated as follows in a recent Law360 interview.
Q: What aspects of your practice area are in
need of reform and why?
A: The government's attempts to hold foreign companies
accountable for having compliance programs that are on par with those we see at
companies that are headquartered in the United States are challenging. Foreign
companies often lack notice of that expectation and as a result suffer the
consequences. Over time, I hope the government will at least consider as one
factor the compliance standards that are the norm in the country in which the
foreign entity operates.
A good weekend to all.
Read more articles on the FCPA by Mike
Koehler at FCPA
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