Foreign Corruption Enforcement Heats Up

Most companies have operations outside the US, whether they’re factories, sales offices or agents. Jacqueline Wolff of Manatt, Phelps & Phillips warned attendees at ACI that they must be diligent in their efforts to remain compliant with The Federal Corrupt Practices Act (FCPA), which had its origin following The Watergate Scandal and today is getting renewed interest from the Department of Justice as a way to increase revenue. The FCPA is big business for government. Just one company, Siemens, paid $1.6 billion in fines for one case, she recalled.

According to Wolff, the biggest focus of regulators these days is on four industries: pharma and medical devices, oil and gas, telecom and financial services. But other industries must not be lax in their efforts to root out corruption.

“You need to conduct due diligence when you go into a country,” she explained. “It is not enough to choose a partner ‘because that’s who everybody uses.’ You need to check out that distributor.”

To get started, Wolff suggested that everyone should be versed in the recently published FCPA Resource Guide. In it, the Department of Justice gives indications of what is of particular interest to regulators; specifically, the use of third party sales agents and distributors.