Asian & EU Companies: When You Think U.S. Think FCPA
Companies here in the US are, for the most part, looking to expand and increase their profits by reaching into other global markets. Of course, as these companies are located here in the US and conduct business affairs here, they are subject to FCPA rules and regulation that are enforced by the Securities and Exchange Commission and Department of Justice. As the United States is also a hot spot for expanding opportunities amongst companies in other parts of the world, once they proceed with operations that include US markets, these companies will be subject to the same rules and regulations that the FCPA enforces.
If we look at trends amongst global markets and see the amount of corruption and bribery activity that is reported and investigated on, we see that a majority of these are coming from Asia. According to a report conducted by the law firm of Freshfields Bruckhaus Deringer, Asia has over half of the open FCPA investigations.
Lily Kuo, a writer for the website Quartz writes an article on how more and more companies, that are outside of the US, will be subject to more investigations and the numbers of FCPA violations.
“Foreign companies that are exposed to US enforcement actions are also paying more of these fines. Non-US based entities paid 63% of the total $2.3 billion in FCPA fines imposed in 2013 and 2014, even though they accounted for less than a third of cases.”
US based companies doing business overseas tend to work with subsidiary groups and local agents. This opens them up to larger risks and intern makes the company liable for anything corruption related. The same goes for companies outside of the US doing business with a group within the US. As long as there is track able and relatable transactions from US components, those company’s that reside outside of the US are held responsible and will be held accountable to FCPA rules and regulations.
Global companies are now seeing the effects of not becoming compliant entities, especially when it pertains to doing business in countries that enforce anti-corruption and anti-bribery initiatives. In order to help the global community on how to better prepare to conduct business on a global scale, Source Intelligence has a set of guidelines that helps companies understand what it takes to be complaint and what needs to be in place for their own compliance programs. From FCPA to the U.K. Bribery Act, these guidelines can be used as a tool to improve or start a anti-corruption compliance program. To view these guidelines click here.
