Bribery is a serious and under-appreciated risk for U.S. companies doing business overseas.
And the crime of bribery has a low threshold definition: generally, companies or individuals giving anything of value to a foreign governmental official to obtain or retain business violate U.S. anti-bribery law.
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (for public companies) continue to increase anti-bribery enforcement activities. Recent cases have resulted in significant fines and penalties for both the entities and persons involved. Increasingly, DOJ is seeking convictions including prison time for corporate executives – even from smaller companies – involved in bribery.Anti-bribery compliance programs significantly reduce bribery risks and consequences. Programs tailored to a business’s unique facts and circumstances (size, business sector, geographies, etc.) can help identify and mitigate bribery possibilities. Typical anti-bribery techniques involve a focus on high-risk activities, personnel training and applying appropriate controls.
Best Practice 2: Conduct due diligence on agents.Agents can be high value business associates, but they also represent high bribery risk. Appropriate due diligence helps identify relationships and past events that may exclude certain persons from acting as company agents, and provides the basis for hiring other qualified persons who do not have problematic backgrounds.
A company’s higher bribery risk situations and activities identified through the risk assessment need particular attention. For example, a company with an overseas sales office should consider applying controls to its petty cash, gifts and entertainment, community relations, and political contributions accounts. Depending upon the location, employees may need country-specific anti-bribery training and internal audit may want to include that office in its audit plan site visits.
Best Practice 3: Put controls in place.
A company’s anti-bribery (or anti-corruption) policy should be clear, understandable and written in a way that is consistent with the company’s corporate culture. The policy should also create and provide details on the related anti-bribery (or anti-corruption) program. For completeness, and to have the maximum benefit, the program should meet leading standards’ definitions of “an effective compliance program.”
Best Practice 4: Implement an anti-bribery policy and program.
Bribes require people. People bribe for a variety of reasons, including:
Best Practice 5: Implement a policy-and-program training and communications plan.
Typically, the company board of directors should oversee the program, and management is responsible for its implementation and operation. Both groups should be trained concerning their respective responsibilities. Periodic status reports should be provided to each group from the appointed compliance officer (See Best Practice 7).
Best Practice 6: Put program governance in place.
The U.S. government and leading practice standards all promote the importance of the chief compliance officer role. The widely-held view is that a company shows that compliance is taken seriously and is a priority only if there is a compliance officer role within senior management. This person (who may hold a full- or part-time role to be performed along with his/her other duties, depending on the circumstances) manages the program, and should have adequate resources to do his or her job.
Best Practice 7: Delegate day-to-day program operational responsibility to a senior officer.