International business: Four ways to avoid an FCPA violation

The consequences for violating the Foreign Corrupt Practices Act (FCPA) are high.  It can include criminal fines levied against the company as well as personal civil and criminal liability, including jail time for officers, directors, stockholders, employees, or agents of the company.  Add the current climate of increased government enforcement of the FCPA and you have a recipe for disaster if you’re doing business in foreign markets and are unaware of the FCPA’s requirements.

Given the high stakes, it’s imperative for you and your company to be aware of potential FCPA traps as well as take affirmative steps to avoid an FCPA violation.  Here are four steps you can take to protect yourself and your company from unwanted civil and criminal liability.

1.       Get familiar with the FCPA requirements. 

The Department of Justice has a neat little publication called the Lay-Person’s Guide to FCPA.  It’s helpful if the FCPA is new to you or you’re looking for a quick refresher.  It explains the basics in a nutshell.  Another way to get familiar with the FCPA is to consult with a lawyer who is knowledgeable in this area and have them explain it to you in the context of your business.

2.       Establish an effective FCPA compliance program. 

Have a lawyer help you establish guidelines and training programs that explain the FCPA in easy to understand terms to all company representatives who transact business internationally.  Document your training with testing.  It provides a record of who completed the training and how successful it was.  Also, ask employees to annually sign a statement certifying that they understand their FCPA obligations and are in compliance with the Act.

 In addition to guidelines and training, the compliance program should also identify and monitor early warning signs of increased FCPA exposure, such as an increased number of sales representatives reassigned overseas.  Such increases, for example, could indicate a need to step up your training schedule.   

3.       Maintain accurate books and records.  This one is self-explanatory.  Financial transparency is good business under any circumstances, and absolutely essential for FCPA compliance under its books-and-records provisions.

4.       Get a government reality check.  If you’re not sure whether certain conduct your business is contemplating abroad would be problematic under the FCPA, you can request an opinion from the Department of Justice in advance.  You should get an answer within thirty days of making your request. 

It may feel counterintuitive to ask the government.  But why have a law firm guess about what the Department of Justice (DOJ) would do when the DOJ will tell you?  All you’ve got to do is ask.  Think of it as a free reality-check.  Besides, your tax dollars are already paying for the DOJ lawyers.  You might as well let them work for you instead of against you if you happen to guess wrong about an FCPA compliance issue.