The FCPA Compliance Handbook for Third-Party Intermediaries
With an Introduction By Richard L. Cassin
The FCPA Compliance Handbook for Third-Party Intermediaries
With an Introduction By Richard L. Cassin
Copyright Š 2011 by Ethics 360 Media Private Limited All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means without written permission of the author.
Information in this book is intended for public discussion and educational purposes only. It does not constitute legal advice and its use does not create an attorney-client relationship.
Introduction There’s more attention focused on the United States Foreign Corrupt Practices Act of 1977 now than at any time in its history. That’s because enforcement of America’s long-armed anti-corruption law has increased ten fold from just a few years ago. More individuals are in federal prison corporations for FCPA-related offenses topped $1.5 billion in 2010. With the FCPA suddenly in the global spotlight, new commentaries about it appear nearly every day. Pundits, professors, popular journalists, advice. Unlike a few years ago, today there are plenty of sources of information about the Foreign Corrupt Practices Act. * But even with all the ink and pixels being devoted to the FCPA, it’s still important to return to the source -- to the statute itself. Those pundits writing about the FCPA usually have some point to make. So they shape or provocative, but it isn’t always helpful to understanding what the law really says and what it requires. And while summaries of the FCPA can be helpful, something is always lost in the paraphrasing. For a true and deep understanding, then, there’s no substitute for the original words as Congress wrote them. * An often-heard complaint from lawyers and others in the compliance community is that the U.S. Department of Justice doesn’t issue “guidance” to help individuals and companies comply with the FCPA. But that’s not strictly true. More than twenty years ago, Congress directed the Department of Justice to provide guidance to potential exporters and small businesses iv
Introduction
to help them understand their obligations under the law. The result was the “Lay Person’s Guide to FCPA,” a short, lucid explanation of the FCPA’s antibribery provisions. The value in the Lay Person’s Guide is two-fold. First, as a plain-English description of the FCPA, it is unsurpassed. In just a few pages it covers what the law requires and prohibits, who it applies to, what defenses are available, and what the penalties for offenses may include. Second, the “Lay Person’s Guide” is the Justice Department’s own view of the FCPA and how it should be or scholars who always have some other point in mind, offers a valuable and unique insight into the prosecutorial mindset. Without question, the no-nonsense approach on display in the “Lay Person’s Guide” has also been evident in the DOJ’s prosecutions of FCPA violators. When it comes to the FCPA, the Justice Department doesn’t split hairs, and neither should those trying to comply with it. Federal Sentencing Guidelines. It describes what an effective corporate compliance and ethics program should look like. Everyone who deals with the FCPA today knows the importance of an effective compliance program. But not many know where the concept of an effective compliance program comes from. Again, going back to the source, in this case the Federal Sentencing Guidelines, is the key to a deeper understanding. The guidelines talk about due diligence, written policies and procedures, involvement of high-level personnel in compliance, communication and training, consistent enforcement, and corrective action. And the commentary and application notes produced by the U.S. Sentencing Commission and included here give practical guidance to achieving an effective compliance program, including the different- sized efforts needed by big organizations and small ones, and what it means if misconduct happens once or several times within an organization. *
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Introduction
Taken together, the words of the FCPA as written by Congress, the guidance provided by the DOJ itself, and the description from the sentencing guidelines of an effective compliance program, will always be invaluable to anyone looking for a better understanding of the Foreign Corrupt Practices Act and how to comply with it. Richard L. Cassin Chairman, Ethics 360 Media
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The Foreign Corrupt Practices Act of 1977 [As of July 22, 2004] ANTIBRIBERY AND BOOKS & RECORDS PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT Current through Pub. L. 105-366 (November 10, 1998) UNITED STATES CODE TITLE 15. COMMERCE AND TRADE CHAPTER 2B—SECURITIES EXCHANGES
§ 78m. Periodical and other reports (a) Reports by issuer of security; contents Every issuer of a security registered pursuant to section 78l of this regulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security— (1) such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information
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