Recently, several companies have publicly disclosed that they are internally investigated or are being investigated by United States and foreign governments related to alleged bribery of foreign officials in an effort to obtain a business advantage. The majority of the investigations have related to alleged violations of the Foreign Corrupt Practices Act (FCPA) or similar Chinese laws. The companies have included WalMart, Sands Casino, Avon and GlaxoSmithKline, among others. Some allegations relate to orchestrated schemes. Other allegations concern the hiring of government employees’ children, lavish trips or allotting excessive funds for entertainment purposes. In other cases, even when the companies under investigation are not directly involved, the companies’ third-party agents and vendor supply chain are implicated and the companies are still held accountable.
For the past several years, the Department of Justice has constantly reiterated that enforcement of the FCPA and other international trade laws is a top priority. In November 2012, the DOJ added to its reiteration by issuing A Resource Guide to the U.S. Foreign Corrupt Practices Act (“Guide”). Companies that operate globally cannot ignore the international framework of anti-corruption laws. With the Guide as a framework, companies should have policies and procedures in place to address the concerns. Senior management must encourage a “culture of compliance” and direct regular training on the company’s policies. Furthermore, companies must direct third-party representatives (including vendors and distributors) through well-written agreements and annual notifications that bribery is simply not tolerated.
If you’d like more information, please contact Brett Johnson, at Snell & Wilmer, who represents businesses and individuals in government relations matters. His practice includes international transactions and compliance, export, government contracting and commercial litigation.