Monday, July 18, 2011
Squaring Compliance with the UK Bribery Act and the FCPA
We are now in a new era – companies now have to comply with the UK Bribery Act and the FCPA. Lawyers are pitching everyone they can – people on the street corners, strangers at parties, everywhere – to hire them to make sure they comply with both the Bribery Act and the FCPA. But really what has to be done? Where are the real differences? What really needs to be done?
I don’t mean to burst a lot of bubbles (or lawyer pitches). I don’t mean to undermine my brethren but here are a few issues which can be practically solved. From the compliance officer’s perspective, I am trying to make life easier not more complicated.
The UK Bribery Act prohibits bribery of foreign public officials and private companies. The FCPA bars bribery of foreign officials but not private officials. So, how do we solve this problem? Do we have two different compliance programs depending on whether the company deals with private and public officials? The practical solution is simple is to apply the same requirements and restrictions to both even where the UK Bribery Act does not apply, unless there is a compelling reason for treating the two situations differently.
An anti-corruption program should not try to differentiate between those customers who might be “foreign officials” under the FCPA and those that are not. By doing so, a compliance officer can avoid the pitfalls of legal interpretations, court decisions and getting whipsawed as the law develops over what is a “foreign official” when a foreign government or officials have an ownership or representative interest in an entity. This makes life simple, promotes consistent ethics, and habits.
Management and sales staff will appreciate a clear and consistent message. Customers should be treated equally in all cases, and no one should try and skirt the system by relying on the niceties of who is “private” and who is “public.” For example, the gifts, meals, entertainment and travel policies will be the same for each class of customer. Or imagine when a company is inspected by a foreign government regulatory employee or an employee from a private certification organization. In this case, the treatment of the official during the inspection should be the same and should not depend on whether they are private or public.
To those who think this may be an example of over-compliance, I would argue that a clear and consistent rule will improve overall compliance rather than trying to come up with legal loopholes or technicalities to justify what will usually be only a marginal benefit.