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Strategies for Minimizing Risk Under the Foreign Corrupt Practices Act and Related Laws

Mike Koehler

In the minds of some, complying with the US Foreign Corrupt Practices Act and related laws such as the UK Bribery Act is easy: ‘you just don’t bribe’. The reality, as sophisticated professionals know, is not so simple. This book is for professionals across various disciplines who recognize the difficulties of compliance and want to learn strategies for minimizing risk under aggressively enforced corporate bribery laws. The book uses issue-spotting scenarios to present risk and guides professionals through various components of compliance best practices from the fundamentals of conducting a risk assessment and effectively communicating compliance expectations, to implementing and overseeing compliance strategies.
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Index

Mike Koehler

AB InBev 34, 37, 269
ABB 253
ABM Industries 623
accounting firms and lawyers, third parties and payment provisions 1734
accounting provisions (books, records and internal controls) 23180
after sales service fees (ASSFs) 2512
audit rights and third parties 192
books and records provision 249, 250, 303
corrupt practices by an issuer, effects of 233
cost-effective considerations 242, 248, 265, 277
enforcement action 25078
enforcement actions, off-target 253, 26272
enforcement actions, on-target 25460
falsification of corporate books and records 2367, 243, 244, 25460, 262, 2638, 269, 2712
FCPA Guidance 2323, 24850, 27071, 276
independent of anti-bribery allegations 2312, 25051
information sources, law and legislative history 2339
information sources, non-legal 24250
innovative records and control systems, encouragement of 248
internal control requirement 24042, 244, 2457, 249, 2513, 25560, 26372, 2745
judicial decisions 23942
knowing or reckless misconduct 247
materiality test, lack of 2456
monitoring 241, 251, 252, 2757
national security issues 235
parent company issuer’s responsibility 238
parent–subsidiary relationships 249, 269, 278
payments made to foreign government 2513
purposes of the Act 245
reasonable assurances and reasonable detail requirements 234, 23746 passim, 249, 26061, 270, 2745
“in reasonable detail” requirement 238
SEC guidance 2428
SEC guidance, Chairman’s 1981 speech 2438
size and resources of the organization 2756
statutory standard 237, 272, 2778
actions against foreign companies 1516
administrative assistants, training best practices 316
advancement of litigating position, and “offensive” use of FCPA 7881
AEA Aircraft Recovery 1312, 137
affirmative defenses 21229
see also facilitating payments exception
affirmative defenses, local law defense 21215
FCPA Guidance 21415
judicial decisions 21314
law and legislative history 21213
affirmative defenses, reasonable and bona fide expenditures defense 21529
anything of value assessment 219
and corporate hospitality 215, 222, 2245, 226, 228
corrupt intention assessment 21920
FCPA Guidance 21729
FCPA Opinion Procedure Releases 217, 218
foreign official assessment 220, 2214, 226
judicial decisions 217
and “just don’t bribe” narrative and gift-giving 21517
law and legislative history 21617
obtain or retain business assessment 220
training requirements 226
travel agencies, use of 228
travel allegations 2225, 2278
written policies and procedures 2267
Africa Sting 1467
after sales service fees (ASSFs) 2512
see also accounting provisions (books, records and internal controls)
AGA Medical 19, 138
AGCO 2513, 279, 319
Akamai Technologies 19, 36, 37, 192
AkzoNobel 253
Alcatel-Lucent 41, 173
Alcoa 46, 789
Alere Inc./Abbott merger 6061
Alliance One International 19, 47, 63
Allison Transmission 8081
Alstom 46, 93, 150, 1867
Aluminum Bahrain BSC (Alba) 789
ambiguity
ambiguous accounts, recognising 318
anti-bribery provisions, professional risk-spotting skills 22
see also language consideration
“obtain or retain business” language 132, 133, 135
see also language consideration
American Rice Inc. (ARI) 132, 1335, 1367
Analogic 19
Angola, third-party payment provisions 36, 37
annual certification, post-engagement, third parties and related risk management strategies 194
anti-bribery provisions
accounting provisions independent of anti-bribery allegations 2312, 25051
and ambiguity concerns 22
see also bribery issues
anti-bribery provisions and risk management strategies 88166
first impression issues 121, 147, 148, 161
anti-bribery provisions and risk management strategies, corrupt intent 10315, 130, 14041
enforcement actions 10915
enforcement actions, unsuccessful bribery schemes 11011
extortion or duress cases 1089, 111
FCPA Guidance 1089, 11415
FCPA Opinion Procedure Releases 109
high-risk jurisdictions 109
judicial decisions 1048
law and legislative history 1034
Opinion Procedure Releases 109
points of contact with foreign officials 101
threats of violence or harm to employees 109
willful violation 104, 1068
willful violation, defendant knew he was doing something generally “unlawful” 1078
willful violation, defendant knew terms of statute 107
anti-bribery provisions and risk management strategies, “foreign official” meaning and scope 11530, 141
enforcement actions 11820
FCPA Guidance 12830
and foreign healthcare systems 119, 120
instrumentality of a foreign government 117, 121, 1223, 124
and “just don’t bribe” 125
law and legislative history 11718
Opinion Procedure Release 124
state-owned enterprises (SOEs) 11720
training requirements 129
written policies and procedures, communication of 12930
anti-bribery provisions and risk management strategies, judicial decisions 12030
identity of foreign official 1267
knowledge of foreign official 1278
public international organization 1256
SOE employees as foreign officials 12025
anti-bribery provisions and risk management strategies, jurisdiction 14356
actions against foreign companies 1516
business organization or person type 1446
enforcement actions 1516
FCPA Guidance 15051
judicial decisions 14650
law and legislative history 1446
minimum contacts and reasonableness 14850
settlement amounts 151, 154
territorial jurisdiction element 1478
U.S. issuers and domestic concerns 1446
use of an instrumentality of interstate commerce 148
anti-bribery provisions and risk management strategies, obtaining or retaining business 13039, 1412, 303
ambiguity concerns 132, 133, 135
business purpose test 131, 1356
enforcement actions 13743
FCPA Guidance 1357
judicial decisions 1315
law and legislative history 13031
points of contact with foreign officials 137, 139, 1423
tax concessions 1325, 137
anti-bribery provisions and risk management strategies, statute of limitations 15662
civil enforcement actions 15960
cooperation issues 1578
criminal enforcement actions 159
disgorgement actions 160
time pressure issues 1589, 16062
anti-bribery provisions and risk management strategies, things of value given to an alleged foreign official 89103, 140
charitable donations 928, 1023
charitable donations, Opinion Procedure Release 102
de minimis amount, lack of 9092, 100
employment or internships to family members of alleged foreign officials 979, 100
enforcement to “fullest extent” 9091
FCPA Opinion Procedure Releases 102
healthcare professionals (HCPs) 91
high-risk jurisdictions 95
“just don’t bribe” 88, 89
training requirements 101, 102, 115
written policies and procedures, communication of 1013, 115
written policies and procedures, corporate hospitality issues 102
anything of value see thing of value assessment
Aon 119
Archer Daniels Midland Co. (ADM) 37, 206
Armor Holdings 19
Aruze USA 77
Ashland Oil 8990
assessment see monitoring; oversight responsibility; periodic assessment and continuous improvement
audit rights and third parties 192
see also accounting provisions (books, records and internal controls)
Australia, Criminal Code 118
Avon 35, 40, 45, 58, 224
Bahree, M. 86
Baker Hughes 34, 489
Basu, K. 83
BHP Billiton 271
Bio-Lab Laboratories 81
Bio-Rad 19, 329, 3378
Biomet 138
BizJet International 19, 212, 325
BNY Mellon 978
board members and senior executives
compliance best practices, high-level commitment 287
compliance program oversight 3235
corporate director’s duty of good faith, shareholder lawsuits 6970
delegation of duties 3268
directors and officers, training best practices 314, 316
executive compensation 667
motivation to fulfill responsibilities 3256
see also business organizations
Braskem 1523, 1556, 25960
Brazil, Clean Companies Act 9
bribery issues
global marketplace conditions and barriers 325
government alleges bribery in connection with payments to a foreign official 2056
high-risk bribery jurisdictions 17
see also anti-bribery provisions
Bridgestone 153
Bristol Myers Squibb 91, 315, 316, 3289
Bristow Group 138
Bruker Corp. 19, 40, 31213, 330
business objectives, and “offensive” use of FCPA 748
business organizations
negative business effects of scrutiny and enforcement 545
obtaining or retaining business see obtaining or retaining business
points of contact with alleged “foreign officials” 26, 325, 36, 378
type, anti-bribery provisions and risk management strategies, jurisdiction 1446
see also board members and senior executives
business purpose test 131, 1356
Canada, Corruption of Foreign Public Officials Act 9, 118, 207, 310
Caremark 69
Cassin, R. 166
CDM Smith 19
Central European Distribution Corporation (CEDC) 756
charitable donations 11
and “just don’t bribe” 88
things of value given to an alleged foreign official 928, 1023
Chestnut Consulting Group 1256
Chevron 253
China
fire-safety certificates 32
gift-giving practices 216
government-issued licenses 35
third-party payment provisions 36, 37
travel agencies, use of 228
Chudow Castle Foundation 923
Cinergy Telecom 19
civil enforcement actions, statute of limitations 15960
civil litigation, shareholder lawsuits see professional risk-spotting skills, ripple effects of scrutiny and enforcement, civil litigation, shareholder lawsuits
class action claims, securities fraud 689, 7073
Cognizant Technology Solutions 56
communication strategies, effective, and compliance program implementation 30813
compliance best practices and risk management strategies 281304
and corporate hospitality 301
DOJ “Evaluation of Corporate Compliance Programs” 285, 286, 289
DOJ FCPA Corporate Enforcement Policy 284
DOJ Principles of Prosecution 285, 286
enforcement, discipline, and incentives 288
FCPA Guidance 283, 286
FCPA Opinion Procedure Releases 282, 286
FCPA Resolution Documents 283
high-level commitment 287
implementation of a compliance program 2867
internal reporting and investigation 288
ISO 37001 2845
OECD Guidance 284, 286
oversight responsibility and resources 2878
parent–subsidiary relationships 300
periodic assessment and continuous improvement 2889
record keeping 289
training and guidance 287
U.S. Sentencing Guidelines 2856
compliance best practices and risk management strategies, risk assessment fundamentals 28995
collaboration 295
country’s corruption ranking issues 29092, 300301
customers or potential customers and foreign official element 2923, 294, 301, 3023
and high-risk positions 2934, 301
ports and other points of entry in foreign countries 2934, 302
regulatory requirements 294
skills exercise 296304
third-party relationships 293, 3012, 3034
compliance hotline 330
compliance program implementation 30522
anything of value assessment 306, 308, 309, 318
corporate hospitality assessment 3067
DOJ Evaluation of Corporate Compliance Programs 312, 317
effective communication strategies 30813
employment or internships to family members of alleged foreign officials 307
facilitating payments exception 30910
FCPA Guidance 314
foreign official, understanding of term 308, 309, 310, 313, 31415
gray areas, dealing with 30911
internal control failures 31213, 319
language consideration 31113
risk assessment 3067
third parties as source of risk 307
violation penalties 308
written policies and procedures 3057
compliance program implementation, training best practices 31319
administrative assistants 316
ambiguous accounts, recognising 318
delivery decisions 31922
directors and officers 314, 316
and enforcement action failures 315, 319
expenses authorization 318
financial gatekeepers 31718
and high-risk situations 31415, 316
holistic compliance 31722
online training 321
points of contact with “foreign officials”, focus on 31516
red flag spotting 31718
third parties 31415, 318
compliance program oversight 32346
board members and senior executives 3235
board members and senior executives, delegation of duties 3268
board members and senior executives, motivation to fulfill responsibilities 3256
compliance hotline 330
discipline and termination of culpable actors in enforcement actions (ripple effect) 3367
DOJ Evaluation of Corporate Compliance Programs 3234, 3268, 331, 3356, 339, 343
entering a new market 340, 3412
failures 325, 32730, 3312, 3356, 337, 340, 343, 3456
FCPA Corporate Enforcement Policy 331, 332
FCPA Guidance 323, 324, 326, 339, 342, 343, 345
FCPA Opinion Procedure Releases 343
funding and resources 3289, 33031
internal reporting and investigation 33039
language consideration 330
long-time employees 341
merger and acquisition activity and post-acquisition integration 345
merger and acquisition activity and pre-acquisition due diligence steps 3425
new products and services launch 340, 3412
and parent–subsidiary relationships 329
periodic assessment and continuous improvement 33946
personnel changes and trust 3412
positive incentives 324
regulatory changes in foreign country 340
remedial measures, implementation of, country exits 3378
remedial measures, implementation of 3358
responsibility and resources 32330
third party policies and procedures 3412
voluntarily disclosure of breaches of compliance policies 3335
Comverse Tech. 19
Con-Way 138
conscious avoidance theory, third party payment provisions 17071, 187
continuous improvement and periodic assessment
compliance best practices 2889
compliance program oversight 33946
Control Components 19, 1278
cooperation issues
anti-bribery provisions, statute of limitations 1578
professional risk-spotting skills 42, 47
corporate hospitality 11, 12, 13
and affirmative defenses 215, 222, 2245, 226, 228
and compliance best practices 301
compliance program implementation 3067
and “just don’t bribe” 88, 215
written policies and procedures 102
corrupt intent assessment
accounting provisions 233
anti-bribery provisions see anti-bribery provisions and risk management strategies, corrupt intent
facilitating payments exception 208
corruption, country’s corruption ranking 29092, 300301
cost factors
accounting provisions 242, 248, 265, 277
funding and resources, compliance program oversight 3289, 33031
and professional risk-spotting skills 40, 415, 50, 523, 59, 63, 73
reasonable and bona fide expenditures defense see affirmative defenses, reasonable and bona fide expenditures defense
country exits 66
compliance program oversight 3378
Covington, J. 22
credit ratings, and professional risk-spotting skills 58
customers or potential customers, risk management strategies, risk assessment fundamentals 2923, 294, 301, 3023
Daimler 2557
Dallas Airmotive 19
Data Systems & Solutions 19, 173
de minimis amount, lack of, and things of value given to an alleged foreign official 9092, 100
DE-Nocil 3034
deferred prosecution agreements
facilitating payments exception 203, 206
post-enforcement action professional fees and expenses 4950
delivery decisions, compliance program implementation, training best practices 31922
Delta & Pine Land Co. 19, 33, 138
Denny, C. 82
derivative actions, civil litigation, shareholder lawsuits 69, 70, 72
Diageo 34, 343
Diebold 49, 667, 225
directors see board members and senior executives
discipline and termination of culpable actors, ripple effects 3367
disgorgement actions, anti-bribery provisions, statute of limitations 160
Dish Network 745
DOJ Evaluation of Corporate Compliance Programs
compliance best practices 285, 286, 289
compliance program implementation 312, 317
compliance program oversight 3234, 3268, 331, 3356, 339, 343
DOJ Principles of Prosecution, compliance best practices 285, 286
Dominican Republic, government’s refusal to pay company 37
Dow Chemical 296304, 306
due diligence file, pre-engagement 1829, 194, 195, 196
duress, extortion or duress cases 1089, 111
El Paso 253
Eli Lilly 93, 172, 319
Embraer 2589
employees
facilitating payments exception, training requirements 21011
in high-risk job functions, training best practices 31415
long-time employees and compliance program oversight 341
threats of violence or harm to 109
employment, wrongful termination 8081
employment or internships to family members of alleged foreign officials 979, 100, 307
enforcement actions
accounting provisions 25078
accounting provisions, off-target 253, 26272
accounting provisions, on-target 25460
compliance best practices 288
compliance program oversight 3367
expansive enforcement theories, professional risk-spotting skills 2931
facilitating payments exception 20512
failures, and compliance program implementation 315, 319
“fullest extent”, things of value given to an alleged foreign official 9091
professional risk-spotting skills 1820, 2931
ripple effects see professional risk-spotting skills, ripple effects of scrutiny and enforcement
SMEs 18, 19
third parties and payment provisions 1728
enforcement actions, anti-bribery provisions and risk management strategies
corrupt intent 10915
“foreign official” meaning and scope 11820
jurisdiction 1516
obtaining or retaining business 13743
unsuccessful bribery schemes 11011
enhanced compliance obligations, post-enforcement action professional fees and expenses 5051
European Bank for Reconstruction and Development 1256
executives see board members and senior executives
expenses authorization, compliance program implementation, training best practices 318
explicit statement of statutory policy, need for 237
extortion or duress cases 1089, 111
facilitating payments exception 198212
anything of value assessment 208
compliance program implementation 30910
corrupt intent assessment 208
deferred prosecution agreements 203, 206
employee training requirements 21011
enforcement actions 20512
facilitating payments as common part of business 207, 211
FCPA Guidance 2045
foreign official element 2013, 208
government alleges bribery in connection with payments to a foreign official 2056
illusory nature of 206
internal controls provisions 21112
judicial decisions 2024
law and legislative history 199202
and obtaining or retaining business 2089
and routine governmental action 199, 203, 206, 207, 209, 211
see also affirmative defenses
failures
compliance program implementation 31213, 315, 319
compliance program oversight 325, 32730, 3312, 3356, 337, 340, 343, 3456
falsification of corporate books and records 2367, 243, 244, 25460, 262, 2638, 269, 2712
see also accounting provisions
family members, employment or internships to family members of alleged foreign officials 979, 100, 307
Faro Technologies 53
FCPA, offensive use see professional risk-spotting skills, ripple effects of scrutiny and enforcement, “offensive” use of FCPA
FCPA Corporate Enforcement Policy 276, 284, 331, 332
FCPA Guidance
accounting provisions 2323, 24850, 27071, 276
affirmative defenses, local law defense 21415
anti-bribery provisions and risk management strategies, corrupt intent 1089, 11415
anti-bribery provisions and risk management strategies, “foreign official” meaning and scope 12830
anti-bribery provisions and risk management strategies, jurisdiction 15051
anti-bribery provisions and risk management strategies, obtaining or retaining business 1357
compliance best practices 283, 286
compliance program implementation 314
compliance program oversight 323, 324, 326, 339, 342, 343, 345
enforcement agencies and conflicting messages in 234
facilitating payments exception 2045
third parties and payment provisions 1712
FCPA Opinion Procedure Releases
affirmative defenses 217, 218
anti-bribery provisions and risk management strategies, corrupt intent 109
anti-bribery provisions and risk management strategies, “foreign official” meaning and scope 124
anti-bribery provisions and risk management strategies, things of value given to an alleged foreign official 102
compliance best practices 282, 286
compliance program oversight 343
third parties 172
FCPA Resolution Documents, compliance best practices 283
Fiat 253
financial benefits, reduced, mergers and acquisitions 623
financial gatekeepers, compliance program implementation 31718
first impression issues, anti-bribery provisions 121, 147, 148, 161
FLIR Systems 19, 278, 91, 275
Flowserve 253
forced business relationships and third-party payment provisions 356
foreign companies, actions against 1516
foreign governments
instrumentality of 117, 121, 1223, 124
payments made to 2513
foreign healthcare systems 119, 120
foreign law enforcement, settlement amounts 47
foreign officials
affirmative defenses, reasonable and bona fide expenditures defense 220, 2214, 226
compliance best practices, risk assessment fundamentals 2923, 294, 301, 3023
compliance program implementation, training best practices 31516
compliance program implementation, understanding of term 308, 309, 310, 313, 31415
facilitating payments exception 2013, 208
meaning and scope see anti-bribery provisions and risk management strategies, “foreign official” meaning and scope
and obtaining or retaining business 137, 139, 1423
points of contact see points of contact with foreign officials
things of value given to alleged see anti-bribery provisions and risk management strategies, things of value given to an alleged foreign official
foreign subsidiaries, pre-enforcement action professional fees and expenses 42
Fretto, A. 280
Gardner Denver 67
General Cable 3312
General Electric Company (G.E.) 80, 253
gift-giving see things of value
Giraudo, J. 163
GlaxoSmithKline 224
Gold Standard Mining 232
Goldman Sachs 99
good faith concept
professional risk-spotting skills 22, 29, 6970
third parties and related risk management strategies 192
see also reasonableness assurances
government-issued licenses 35
governmental action, routine 132, 310
and facilitating payments exception 199, 203, 206, 207, 209, 211
government’s refusal to pay company 367
gray areas, dealing with, compliance program implementation 30911
Grime, R. 230
Haiti Teleco 12024, 2023, 21213
Halliburton 36, 37, 46, 187, 192
Harvest Natural Resources 79
head-in-the-sand approach, prevention of, third parties and payment provisions 169
healthcare, foreign systems 119, 120
healthcare professionals (HCPs) 91
Hecker, S. 164
Helmerich & Payne 19, 33, 138
Hewlett-Packard (HP) 2657, 278
high-level commitment see board members and senior executives
high-risk positions
compliance best practices 2934, 301
and compliance program implementation, training best practices 31415, 316
corrupt intent 109
professional risk-spotting skills 17, 18, 23
things of value given to an alleged foreign official 95
Hitachi 36
Ho, P. 86
holistic compliance, compliance program implementation, training best practices 31722
Hyperdynamics 40
IAP Worldwide 19
implementation, compliance program see compliance program implementation
improvement, continuous, compliance program oversight 33946
incentives
compliance best practices 288
compliance program oversight 324
independent compliance monitor, post-enforcement action professional fees and expenses 513
India, harassment bribery 34, 37
information sources, accounting provisions
law and legislative history 2339
non-legal 24250
Ingersoll-Rand 253
Innospec 79, 89, 253
innovative records and control systems, encouragement of 248
instrumentality of a foreign government 117, 121, 1223, 124
internal controls
accounting provisions 24042, 244, 2457, 249, 2513, 25560, 26372, 2745
compliance best practices 288
compliance program oversight 33039
facilitating payments exception 21112
failures, compliance program implementation 31213, 319
internships see employment or internships to family members of alleged foreign officials
investment analyst downgrades 57
InVision Technologies 172
ISO 37001, compliance best practices 2845
JGC Corporation 1512
Johnson & Johnson (J&J) 5051, 253
Johnson Controls 327
Johnston, J. 86
Jordan, J. 230
Jorgensen, J. 304
JPMorgan 989, 2712
judicial decisions
accounting provisions 23942
affirmative defenses, reasonable and bona fide expenditures defense 217
anti-bribery provisions and risk management strategies see anti-bribery provisions and risk management strategies, judicial decisions
facilitating payments exception 2024
identity of foreign official 1267
knowledge of foreign official 1278
public international organization 1256
SOE employees as foreign officials 12025
third parties and payment provisions 17071
jurisdiction, anti-bribery provisions see anti-bribery provisions and risk management strategies, jurisdiction
“just don’t bribe”
fallacy, and professional risk-spotting skills 2025, 37, 300
foreign official meaning and scope 125
and gift-giving 21517
things of value given to an alleged foreign official 89
KBR/Halliburton 46
Keppel Offshore and Marine 173
Key Energy 338
knowing or reckless misconduct, accounting provisions 247
knowledge of existence of a particular circumstance, third parties and payment provisions 1689, 172, 1758, 187
Krakoff, D. 229
LAN Airlines 337
language consideration
compliance program implementation 31113
compliance program oversight 330
see also ambiguity
Las Vegas Sands 81
Latin Node 19
law and legislative history
affirmative defenses, reasonable and bona fide expenditures defense 21617
anti-bribery provisions, jurisdiction 1446
corrupt intent 1034
facilitating payments exception 199202
foreign official meaning and scope 11718
information sources, accounting provisions 2339
obtaining or retaining business 13031
third parties and payment provisions 1689
lawyers and accounting firms, third parties and payment provisions 1734
Layne Christensen 19, 91, 174, 205
Lee, Y. 86
legal principles, and professional risk-spotting skills 2631
Levy, M. 280
Libyan Investment Authority (LIA) 99
licenses, government-issued 35
Lindsey Manuf. 19
liquidations, institutional investor 57
local law defense see affirmative defenses, local law defense
Lockheed Martin Corp. 5960
long-time employees and compliance program oversight 341
see also employees
Louis Berger International 19, 80
Lucent Technologies 2234
Magyar Telekom 42, 1478, 153
management issues, professional risk-spotting skills 668
markets
capitalization, and professional risk-spotting skills 557
entering new, and compliance program oversight 340, 3412
global see professional risk-spotting skills, global marketplace conditions and barriers
materiality test, lack of, accounting provisions 2456
Matthews, C. 87
Maxwell Technologies 19, 72
Mead Johnson 272
mergers and acquisitions
compliance program oversight 3425
professional risk-spotting skills see professional risk-spotting skills, ripple effects of scrutiny and enforcement, mergers and acquisitions
Metcalf & Eddy 8990
Microsoft 2021, 245, 28
minimum contacts and reasonableness, anti-bribery provisions, jurisdiction 14850
Misonix 80
Mondelez International 34
monitoring
accounting provisions 241, 251, 252, 2757
independent compliance monitor, post-enforcement action professional fees and expenses 513
post-engagement, and third parties 1934, 195
see also oversight responsibility; periodic assessment and continuous improvement
Monsanto 110
NATCO Group 19, 40, 111, 2623
national security issues, accounting provisions 235
Nature’s Sunshine Products 19, 138
NCH Corp. 19, 225
NCR Corp. 57
negative business effects of scrutiny and enforcement 545
see also business organizations
new products and services launch, compliance program oversight 340, 3412
NewMarket Corp. 79
Nexus Tech. 19
Nigeria, Customs Service and bribery 35, 173, 2034, 21112
Nike 17
Noble Corporation 2034, 21112, 269
non-legal information sources, accounting provisions 24250
NORDAM Group 19, 119
Nordion 27
Nortek 19
Novartis 91
Novo Nordisk 253
Nu Skin Enterprises 19, 35, 93, 2678, 278
obtaining or retaining business
affirmative defenses, reasonable and bona fide expenditures defense 220
anti-bribery provisions see anti-bribery provisions and risk management strategies, obtaining or retaining business
and facilitating payments exception 2089
see also business organizations
Och-Ziff 46, 64, 1889
Odebrecht 1523, 1556, 25960
OECD Anti-Bribery Convention 5, 136, 1456, 154
OECD Guidance, compliance best practices 284, 286
OECD review of FCPA 2
off-target enforcement actions, accounting provisions 253, 26272
offensive use of FCPA see professional risk-spotting skills, ripple effects of scrutiny and enforcement, “offensive” use of FCPA
Ohio National Fund 57
Olympus 119
omnipresent risk, professional risk-spotting skills 1720
on-target enforcement actions, accounting provisions 25460
online training, compliance program implementation 321
Oracle 2635, 278
Orthofix International 312, 329
oversight responsibility
compliance best practices 2878
compliance program see compliance program oversight
see also monitoring; periodic assessment and continuous improvement
Paradigm 91, 185
parent company responsibility for accounting provisions 238
parent–subsidiary relationships
and accounting provisions 249, 269, 278
and compliance best practices 300
and compliance program oversight 329
professional risk-spotting skills 2931, 33
and third parties 1789
Park, R. 346
Parker Drilling Co. 85
payments
facilitating payments exception see facilitating payments exception
made to foreign government, accounting provisions 2513
third parties see third parties and related risk management strategies, payment provisions
PBSJ Corp. 19, 612
Peace, B. 166
Pelletier, P. 166
periodic assessment and continuous improvement
compliance best practices and risk management strategies 2889
compliance program oversight 33946
see also monitoring; oversight responsibility
personnel changes and trust 3412
Peterson, T. 346
Petrobras 723
Petrofac Ltd 57
Petroleos de Venezuela, S.A. (PDVSA) 79
Pfizer/Wyeth 119
points of contact with foreign officials
anti-bribery provisions and risk management strategies, corrupt intent 101
anti-bribery provisions and risk management strategies, obtaining or retaining business 137, 139, 1423
business organizations with, and professional risk-spotting skills 26, 325, 36, 378
compliance program implementation, training best practices 31516
Ports Engineering Consultants Corporation 89
ports and other points of entry in foreign countries 2934, 302
post-enforcement action professional fees and expenses see professional risk-spotting skills, ripple effects of scrutiny and enforcement, post-enforcement action professional fees and expenses
post-engagement strategies, third parties 1926
pre-enforcement action professional fees and expenses see professional risk-spotting skills, ripple effects of scrutiny and enforcement, pre-enforcement action professional fees and expenses
pre-engagement strategies, third parties 1829, 194, 195, 196
Procter & Gamble 17
professional risk-spotting skills 1687
anti-bribery provisions and ambiguity concerns 22
business organizations with points of contact with alleged “foreign officials” 26, 325, 36, 378
cooperation issues 42, 47
enforcement actions 1820
enforcement actions, SMEs 18, 19
enforcement agencies and conflicting messages in FCPA Guidance 234
expansive enforcement theories 2931
good faith concept 22, 29, 6970
high-risk bribery jurisdictions 17, 18, 23
“just don’t bribe” fallacy 2025, 37, 300
omnipresent risk 1720
parent–subsidiary relationships 2931, 33
parent–subsidiary relationships, alter ego factors 3031
respondeat superior principle 4, 269, 300
rogue actors 45, 26
root causes of risk 2531
root causes of risk, legal principles 2631
professional risk-spotting skills, global marketplace conditions and barriers 318
bribery issues 325
forced business relationships and third-party payment provisions 356
government-issued licenses 35
government’s refusal to pay company 367
professional risk-spotting skills, ripple effects of scrutiny and enforcement 3882
cost factors 40, 415, 44, 50, 523, 59, 63, 73
credit ratings 58
executive compensation 667
institutional investor liquidations and investment analyst downgrades 57
management issues 668
management issues, generic risks 67
market capitalization 557
negative business effects of scrutiny and enforcement 545
resource availability 545
settlement amounts 38, 4041, 459, 53
professional risk-spotting skills, ripple effects of scrutiny and enforcement, civil litigation, shareholder lawsuits 6874
corporate director’s duty of good faith 6970
derivative actions 69, 70, 72
securities fraud class action claims 689, 7073
professional risk-spotting skills, ripple effects of scrutiny and enforcement, mergers and acquisitions
lost or delayed business opportunities 636
post-enforcement action professional fees and expenses 63
reduced financial benefits 623
restructuring 6062
terminations 5960
professional risk-spotting skills, ripple effects of scrutiny and enforcement, “offensive” use of FCPA 7482
advancement of litigating position 7881
business objectives 748
wrongful termination of employment 8081
professional risk-spotting skills, ripple effects of scrutiny and enforcement, post-enforcement action professional fees and expenses 4954
deferred prosecution agreements 4950
enhanced compliance obligations 5051
independent compliance monitor 513
mergers and acquisitions 63
professional risk-spotting skills, ripple effects of scrutiny and enforcement, pre-enforcement action professional fees and expenses 4045, 48
cost factors 415
foreign subsidiaries 30, 42
“where else” question 415
program implementation see compliance program implementation
PTC 3031, 119, 224, 313, 335
public international organization, judicial decisions 1256
Qualcomm 98
questionnaire, pre-engagement and third parties 17980, 187
RAE Systems 19, 66, 343, 3456
Ralph Lauren Corporation (RLC) 30, 47, 337
reasonableness assurances
and bona fide expenditures defense see affirmative defenses, reasonable and bona fide expenditures defense
and minimum contacts 14850
and reasonable detail requirements, accounting provisions 234, 23746 passim, 249, 26061, 270, 2745
see also good faith concept
record keeping
accounting provisions see accounting provisions (books, records and internal controls)
compliance best practices 289
red flags
compliance program implementation, training best practices 31718
and third parties 17071, 1758, 179, 180, 184, 185, 186
refusal to pay, government’s refusal to pay company 367
regulatory changes in foreign country, compliance program oversight 340
remedial measures, implementation of, compliance program oversight 3358
resources
availability, and professional risk-spotting skills 545
and responsibility, compliance program oversight 32330
size and resources of organization, and accounting provisions 2756
respondeat superior principle 4, 269, 300
restructuring effects 6062
ripple effects
discipline and termination of culpable actors 3367
scrutiny and enforcement see professional risk-spotting skills, ripple effects of scrutiny and enforcement
risk management strategies 4, 8
affirmative defenses see affirmative defenses
anti-bribery provisions see anti-bribery provisions and risk management strategies
and compliance best practices see compliance best practices and risk management strategies
compliance program implementation 3067
facilitating payments exception see facilitating payments exception
professional risk-spotting skills see professional risk-spotting skills
and third parties see third parties and related risk management strategies
Rockoff, J. 82
rogue actors, professional risk-spotting skills 45, 26
Rolls-Royce 119, 3367
routine governmental action see governmental action, routine
Russia, building licences and permits 32
SAP 27
SBM Offshore 185, 3256
Schectman, J. 84
Schering-Plough 923, 262, 269
SciClone Pharmaceuticals 556, 68, 91, 119, 173, 332
SEC guidance, accounting provisions 2428
Chairman’s 1981 speech 2438
Securities Exchange Act 5
securities fraud class action claims, civil litigation, shareholder lawsuits 689, 7073
senior executives see board members and senior executives
settlement amounts
anti-bribery provisions, jurisdiction 151, 154
and professional risk-spotting skills 38, 4041, 459, 53
see also payments
shareholder lawsuits see professional risk-spotting skills, ripple effects of scrutiny and enforcement, civil litigation, shareholder lawsuits
Siemens 21, 22, 46, 523, 14850, 2545, 283
Sieroty, C. 87
size and resources of the organization, and accounting provisions 2756
skills exercise, compliance best practices 296304
SMEs, enforcement actions and professional risk-spotting skills 18, 19
Smith & Wesson 19, 89, 110, 340
Snamprogetti/ENI 46
SoftBank 745
South Africa, third-party payment provisions 36
Sprint Nextel 745
state-owned enterprises (SOEs) 11720
employees as foreign officials 12025
statute of limitations see anti-bribery provisions and risk management strategies, statute of limitations
statutory standard, accounting provisions (books, records and internal controls) 237, 272, 2778
Stryker 93
subsidiaries
foreign, and professional risk-spotting skills 30, 42
parent–subsidiary relationships see parent–subsidiary relationships
supervision see monitoring
tax concessions, obtaining or retaining business 1325, 137
Telia 36, 46, 89, 325
Tenaris 42, 153
terminations
culpable actors in enforcement actions 3367
mergers and acquisitions 5960
third party engagement 1912
wrongful termination of employment 8081
Terra Telecommunications 12024
Teva Pharmaceuticals 467, 152, 187, 225, 227
Textron 253
things of value assessment
compliance program implementation 306, 308, 309, 318
facilitating payments exception 208
gift-giving 23
given to alleged foreign official see anti-bribery provisions and risk management strategies, things of value given to an alleged foreign official
and “just don’t bribe” 21517
third parties
compliance program implementation 307
compliance program implementation, training best practices 31415, 318
compliance program oversight 3412
criteria to risk rank 1845
forced business relationships and third-party payment provisions 356
relationships, and compliance best practices 293, 3012, 3034
third parties and related risk management strategies 16797
engagement 18992
engagement, audit rights 192
engagement, termination clause 1912
engagement, written agreement 18991
FCPA Opinion Procedure Releases 172
good faith concept 192
parent–subsidiary relationships 1789
post-engagement 1926
post-engagement, annual certification 194
post-engagement, monitoring and supervision 1934, 195
post-engagement, training and acknowledgment letter 193
pre-engagement, compliance commitment and acknowledgment letter 1812
pre-engagement, criteria to risk rank third parties 1845
pre-engagement, due diligence file 1829, 194, 195, 196
pre-engagement, questionnaire 17980, 187
pre-engagement, red flags 179, 180, 184, 185, 186
third parties and related risk management strategies, payment provisions 16878
conscious avoidance theory 17071, 187
enforcement actions 1728
FCPA Guidance 1712
head-in-the-sand approach, prevention of 169
judicial decisions 17071
knowledge of the existence of a particular circumstance 1689, 172, 1758, 187
law and legislative history 1689
lawyers and accounting firms 1734
red flags 17071, 1758
threats of violence or harm to employees 109
Tillen, J. 86
time pressure issues 1589, 16062
Titan Corporation 5960
Torbett, L. 86
Total 46
training requirements
affirmative defenses, reasonable and bona fide expenditures defense 226
compliance best practices 287
compliance program implementation see compliance program implementation, training best practices
facilitating payments exception 21011
“foreign official” meaning and scope 129
things of value given to an alleged foreign official 101, 102, 115
third party post-engagement 193
Transparency International, “Corruption Perception Index” 33, 29091
travel agencies, use of 228
travel allegations, affirmative defenses, reasonable and bona fide expenditures defense 2225, 2278
Tristan, E. 86
trust, and personnel changes, compliance program oversight 3412
Tyrrell, S. 346
Tyson Foods 33, 42, 138
U.K., Bribery Act 9, 118, 207, 20910, 310
Ukraine, government’s refusal to pay company 37
U.N. Oil-for-Food Program (OFFP) 251, 253
United Airlines 232
Universal Corporation 47
Universal Entertainment Corporation 77
Urofsky, P. 30
U.S.
Department of Commerce Country Commercial Guides 292
issuers and domestic concerns 1446
Racketeer Influenced and Corrupt Organizations Act (RICO) 78
Robinson-Patman Act 79
Sentencing Guidelines 2856
Sherman Act 79
State Department Investment Climate Statements 292
Texas Free Enterprise and Antitrust Act 79
Travel Act 78, 116
Virginia Antitrust Act 79
Virginia Business Conspiracy Act 79
U.S., cases
Caremark 69
Gabelli v. SEC 156
SEC v. Dow Chemical 296304, 306
SEC v. Jackson 1267, 161, 209, 212
SEC v. Kokesh 160
SEC v. Mattson 1323, 137
SEC v. Steffen 14850
SEC v. Straub 127, 1478, 1612
SEC v. World-Wide Coin Investments 23942, 261
Stichting v. Schreiber 1056, 1078
Stone v. Ritter 6970
U.S. v. Bourke 16061, 17071, 213, 290, 292
U.S. v. Carson 1278
U.S. v. Castle 124
U.S. v. Duperval 2023
U.S. v. Esquenazi 12024, 127, 129, 202, 293, 301
U.S. v. Harder 1256
U.S. v. Hoskins 150
U.S. v. Kay 106, 132, 1335, 1367
U.S. v. Kozeny 15
U.S. v. Liebo 90, 1045, 217
U.S. v. O’Shea 126
UTStarcom (UTS) 19, 75, 2223
Uzbekistan, third-party payment provisions 36
Van Dyk, P. 83
Vardi, N. 84, 86
Venezuela, government’s refusal to pay company 36
Veraz Networks 19, 40, 119
VimpelCom 46, 89, 2578, 283, 325
violation
penalties, compliance program implementation 308
willful 104, 1068
violence, threats to employees 109
Vitusa Corp. 37
voluntarily disclosures 6, 50
compliance program oversight 3335
Volvo 253
Wabtec 34
Walmart 40, 556, 66, 689, 103, 1423, 195, 2845
Warin, J. 85, 230
Watts Water Tech. 19
Weatherford International 36, 37, 253
Webb, T. 164
Weissbrodt, D. 82
Weissmann, A. 24
Westbrook, A. 86
“where else” question, pre-enforcement action professional fees and expenses 415
Willbros Group 53
Wingfield, N. 82
Witten, M. 164
World Acceptance Corp. 56
World Bank, “Ease of Doing Business” ranking 33, 292
World-Wide Coin Investments 23942, 261
written policies and procedure, things of value given to an alleged foreign official 102
written policies and procedures
affirmative defenses, reasonable and bona fide expenditures defense 2267
compliance program implementation 3057
“foreign official” meaning and scope 12930
things of value given to an alleged foreign official 1013, 115
third party engagement 18991
wrongful termination of employment 8081
see also terminations
Wynn Resorts 768
Wysong, W. 164
York International 319
Zdeb, S. 230
Zimmer Biomet 336
* Index compiled by Margaret McCormack.