The main criticism of the FCPA is that many of the countries that US companies operate in conduct business in a manner that is counter to the FCPA. Additionally, many foreign companies are not restricted by a version of the FCPA, thus US companies are at a disadvantage. While all of this is true, in the end it does not matter because being convicted of violating the FCPA can destroy a US company, but more specifically key individuals within the company to include the management structure. 

FCPA Training Know the violations Avoid the fines

The FCPA specifically addresses any conduct or action wherein goods, money or favors are exchanged for preferential or advantageous treatment. This includes but is not limited to bribes, gifts, unscheduled fees, cash payments, unstructured stipends, bonuses, etc. Many people believe that a FCPA violation has to be a multimillion-dollar deal, however most violations are over very small amounts and issues of less than $10,000.

FCPA penalties carry a $250,000 fine and 20-year jail sentence for each violation for each person involved. Many companies mistakenly think that this will only apply to the specific individual involved (say a sales rep), however this is not the case as the Department of State (DOS) will prosecute not only the individual (sales rep in this case), but his/her immediate supervisor and all the way to the CEO as they feel that the company should have policies and practices to identify and circumvent these types of issues. USDOS will cite that the company “should have known” when an employee is violating the FCPA and is therefore liable. As a matter of fact, the USDOS is very successful in these prosecutions and is very proud to publicly announce their successes by posting each and every case online in addition to briefing the statistics and specifics frequently.

It is exceptionally easy to run afoul of the FCPA, much easier than most believe. Something as simple as paying a “fee” to expedite a shipment or customs clearance could lead to a violation if that fee is not a schedule or posted fee. Likewise, taking government officials to dinner in the course of conducting business could be construed as a violation if not done correctly. To add to the problem, foreign nationals (agents, brokers and customers) can (and will) lead US companies and individuals astray citing “this is how business is done in my country” which may seem reasonable at the time but be completely in violation of the FCPA. Keep in mind that that USDOS cannot prosecute foreign nationals, but they can and will prosecute US citizens and companies without hesitation.

FCPA Training and Conducting International Business

Companies can mitigate FCPA violations by instituting and enforcing strong company policies and procedures. While this may not stop a violation, it can insulate the company to a degree should an employee make a bad decision or take an inappropriate action.

SBS can teach provide real world actionable instruction on what policies to adopt, how to operate when conducting international business and how to protect the company in a diverse environment. Please contact SBS Training Solutions for more information.