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Saturday, October 15, 2011

FCPA Risks - Misconceptions


      
“Have the courage to say no. Have the courage to face the truth. Do the right thing because it is right. These are the magic keys to living your life with integrity.” -- W. Clement Stone


FCPA, short for the Foreign Corrupt Practices Act. Enacted in 1977, the FCPA generally prohibits U.S. businesses and their employees from bribing foreign government officials to win business or to obtain improper competitive advantage. For public companies that file reports with the U.S. Securities and Exchange Commission, the FCPA also was the genesis of the now-familiar laws that require accurate accounting entries and effective internal controls.

FCPA liability may be a risk at your company.  In a recent article at CFO.com regulators identify five fallacy's about the anti bribery law that false comforts are being taken by executives.

  • Our foreign sales are too immaterial to create FCPA risks.
  • None of our foreign customers are governmental department or agencies.
  • Our employees never interact directly with anyone from foreign governments.
  • We're better off not knowing what our foreign personnel and agents do to get business done.
  • Everybody else does it and never gets caught.
Business awareness mitigates risk and as William Shedd states, “A ship is safe in harbor, but that's not what ships are for.”