Elements of an Effective Anti-Corruption Program

Transcript:Elements of an Effective Anti-Corruption Program:
Elements of an Effective Anti-Corruption Program March 26, 2012 Mohammed Ahmed Deloitte Financial Advisory Services LLP Table of contents Overview of FCPA and UK Bribery Act FCPA overview The FCPA is a US statute enacted in 1977 after Watergate and revelations of foreign bribery involving U.S. companies. Substantially amended in 1988 and 1998 (to expand law and bring FCPA into conformity with Organization for Economic Co-operation and Development (“OECD”) Convention). The FCPA has two provisions: The Anti-Bribery provision states: “A company cannot corruptly make an offer, promise, or payment of ‘anything of value’ to a ‘foreign government official’ or politician for the ‘purpose of influencing his or her official actions’ for the advantage of the company.” (17 U.S.C § 78dd-1 et seq.) The Books and Records provision requires companies who file reports with the SEC to maintain accurate books and records and also to maintain an adequate system of internal controls. FCPA overview (cont.) What is “anything of value”? Some examples include: Cash or a cash equivalent Donations Travel expenses Gifts Favorable real estate deals (leases/sales) Internships and/or direct employment for relatives of foreign officials Sports outings or other entertainment unrelated to customary entertainment connected with a particular deal or contract Loans Business opportunities Providing financial products at discounted rates Assisting with medical care (e.g., referrals or prescriptions) FCPA overview (cont.) What is meant by “foreign official”? Any officer or employee of a non-U.S. government or any department, agency, or instrumentality thereof. Any political party, party official, or candidate for political office. Officials or employees of public international organizations — defined as organizations that have been designated as such by executive order of the President, such as the World Bank, IMF, and the United Nations. Any person acting in an official capacity for or on behalf of any such entity, including members of royal families, officers and employees of state-owned enterprises, or anyone who exercises official authority. How does the FCPA apply to “third parties”? The FCPA also prohibits payments to third parties, such as consultants and representatives, “while knowing” that all or part of the payment will be given to a foreign official. The knowledge standard is very broad, and liability can be based on conscious disregard, willful blindness or deliberate ignorance of facts putting you on notice that your agent may commit a violation. FCPA books and records provision The books and records provision require companies who file