Human Resources' Role in FCPA Compliance


Enacted in 1977, the FCPA prohibits bribes to foreign officials with the intent to obtain or retain business. The two main parts of the FCPA are anti-bribery and accounting provisions. Ultimately, the basis for any FCPA prosecution turns on the actions of a company's employee(s). Now more than ever it is important for human resources professionals to become vigilant partners in FCPA compliance. The provisions of the act are stringent and require strict adherence. Moreover, the whistleblower provision of the Dodd-Frank Act of 2010 provide financial incentives for employees to report FCPA violations and protection against retaliation for those that do. Importantly, employees providing "original" information to the government can be considered as participating in protected conduct.

The past year has seen the Department of Justice and the Securities and Exchange Commission aggressively enforce the FCPA, obtaining criminal indictments at record pace. D. Michael Crites of Dinsmore & Shohl provided an in-depth look at the FCPA and the recent enforcement efforts. HERE (Foreign Corporate Practices Act: Is Your Company Prepared for the New Era of Increased Enforcement?) After the closely watched trial of U.S. v. Noriega, Assistant Attorney General Lanny Breuer stated:

Foreign corruption undermines the rule of law, stifling competition and the health of international markets and American businesses. As the prosecution shows, we are fiercely committed to bringing to justice all the players in these bribery schemes--the executives who conceive of the criminal plans, the people they use to pay the bribes, and the companies that knowingly allow these schemes to flourish.

In U.S. v. Noriega, decided in early May 2011, Lindsey Manufacturing became the first American company to be convicted under the Foreign Corrupt Practices Act. After only one day of deliberations, a jury found the company's CEO and CFO guilty of several FCPA violations for their roles in an alleged bribery scheme involving Mexican government officials. At trial, the Department of Justice presented evidence that the Company used a Mexican sales representative to act as an intermediary to obtain contracts from Mexico's state-owned utility company. While sentencing is set for September 2011, the CEO and CFO face a maximum sentence of 30 years in prison and significant fines.

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Published In: Criminal Law Updates, International Trade Updates, Labor & Employment Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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