Internal Controls under the UK Bribery Act and FCPA


Although much is still unclear about the implementation date, or the manner in which the UK Bribery Act will be enforced, it is clear that one of the important compliance functions which a company should implement is appropriate internal controls. The previously released Consultative Guidance had the following language regarding internal controls, “Businesses should also consider how their existing internal company procedures can be used for bribery and corruption prevention. For example, financial and auditing controls, disciplinary procedures, performance appraisals, and selection criteria can act as an effective bribery deterrent.”

Internal controls are a key component of any best practices compliance program, whether based upon the Foreign Corrupt Practices Act (FCPA); OECD Good Practices or another local law. Appropriate controls are always needed for the reason that if a compliance program relies simply on the issuance of compliance policies, and on the honesty of a company’s employees, a company may get lucky and avoid a violation but a it will not have an effective compliance program.

Internal controls means more than simply financial and auditing controls. As noted by the UK Bribery Act Consultative Guidance, internal controls should also be applied to other areas of a company’s overall program. Internal controls can provide a check on employee training, certification and testing; issues related to employee performance, such as performance appraisals and disciplinary procedures; and third party due diligence and administrative procedures.

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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.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

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