The Foreign Corrupt Practices Act is a law most logically implicated when doing business in international markets. In this new era, business organizations large and small, and across a variety of industry sectors, are doing more business in international markets than ever before.
Because of this, FCPA compliance is not just for big companies, but for small to medium size enterprises (SMEs) as well. As the SEC stated in connection with the 2014 FCPA enforcement action against Smith & Wesson:
“This is a wake-up call for small and medium-size businesses that want to enter into high-risk markets and expand their international sales. When a company makes the strategic decision to sell its products overseas, it must ensure that the right internal controls are in place and operating.”
Smith & Wesson should not have been the first wake-up call because prior to the enforcement action, there have been numerous FCPA enforcement actions against SMEs as highlighted by the below chart. (Note: the term SME does not just refer to private companies. After all private companies can be very large just as publicly companies can be very small. Moreover, the term SME lacks a bright line definition).
FCPA Enforcement Actions Against SME’s (2007-present)
- FLIR Systems
- PBSJ Corp.
- Dallas Airmotive
- Bruker Corp.
- Layne Christiansen
- Smith & Wesson
- Bio-Rad
- NORDAM Group
- Data Systems & Solutions
- BizJet International
- Watts Water Technologies
- Comverse Technologies
- Maxwell Technologies
- Alliance One International
- Armor Holdings
- Lindsey Manufacturing
- RAE Systems
- Veraz Networks
- NATCO Group
- Cinergy Telecommunications
- Latin Node
- UTStarcom
- Helmerich & Payne
- Nature’s Sunshine Products
- Control Components
- Nexus Technologies
- AGA Medical
- Delta & Pine Land Co.
In addition to the above actions, although the DOJ’s manufactured Africa Sting enforcement action was a disaster, it did lead to greater recognition among SMEs of the importance of pro-active FCPA compliance policies and procedures. Indeed, the 2010 OECD Phase 3 Report on the U.S. stated that a “recent ‘sting operation’ involving mid-sized firms, was also believed to have had a significant impact, particularly on SMEs, making them more aware of the need for effective compliance.”
Nevertheless, survey after survey suggests that a significant percentage of business organizations subject to the FCPA – most prominently SMEs’ – fail to act consistent with FCPA compliance best practices. Common deficiencies include failure to conduct FCPA training of employees and agents and failure to conduct due diligence of third-parties.
As to the former deficiency, the anti-bribery training course I developed with Emtrain (an innovative compliance training company) is a good remedy. Indeed, numerous companies – including SMEs – across industry sectors have already selected it for their on-line anti-bribery training needs.
The approximate 60-minute course features:
- Executive and non-executive versions;
- The ability to configure the course with company-specific messages and videos from corporate leaders, company specific policies, and company employee hotline or reporting information;
- 20+ video clips that engage learners and illustrate real-world business scenarios that present risk ;
- Availability in the following languages: English, Spanish, Portuguese, Chinese (simplified), Japanese, French, Russian and others available upon request.
- An Enforcement Risk Spectrum that helps learners “issue spot” bribery and corruption risk;
- The ability to use video scenes outside the e-Learning experience in live training, discussion groups, or company emails and reminders;
- A compliance Learning Management System enabling an administrator to launch and track training efforts and generate audit-ready training reports showing time spent on each video, screen, policy, etc.
To see what others are saying about the course, see here.
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