Russian Compliance Practitioners In Texas

by Thomas Fox
Contact I had the privilege of meeting a group of compliance practitioners from Russia who came to the United States to meet with US based compliance professionals and learn more about how the Foreign Corrupt Practices Act (FCPA) impacts how US companies do business overseas. The delegation was hosted by Washington-based Center for International Private Enterprise (CIPE), an affiliate of the US Chamber of Commerce.

The purpose for the visit was straightforward, to allow these Russian compliance specialists to understand more fully the obligations of US companies under the FCPA so that they, in turn, could educate Russian businesses which may want to do business with US companies. It is, as my colleague Jason Poblete often writes on his blog The DC Dispatches, a business approach to a legal problem. As this is Texas and the world famous Houston Rodeo is just beginning, we dined at lunch with some very excellent Bar-Be-Que. Meeting our Russian colleagues were some of Houston’s top in-house compliance officers and practitioners. While primarily drawn from the energy sector, there were representatives from public and private companies; multi-billion dollar companies down to entities with $100 million in annual sales; product manufacturers and service-oriented companies, some companies had larger compliance departments, down to one-man (compliance) bands

I learned quite a bit listening to the Houston based compliance specialists talk about the thing that was most important or significant when dealing with a third party. Their remarks were limited to 5 minutes so they could only talk about a few key points. By far the most important was to understand who they were doing business with in the third party. Not just the listed owners, officers, directors and key employees but who is the ultimate beneficial owner. It is because that understanding of ownership allows a determination to be made if there is a foreign government representative involved. While certainly this would raise a red flag, the Department of Justice (DOJ) Opinion Releases have shown that having foreign official ownership does not require a US company to decline to do business under all circumstances as the key is how is that relationship is managed.

A second point made was that if a Russian company had a compliance program in place and understood a US company’s obligations under the FCPA; it would clearly stand out as a market differentiator. So by having a program, training on it, having documentation of all of this a Russian company could stand out as a potential business partner of a US centric company, in a variety of manners such as an agent, sales representative, supplier, joint venture partner or even as a key customer.

Another Houston based compliance practitioner, whose company has more of a logistical focus, said that a key compliance indicator for his company is documentation. The more documentation that can be presented to support invoices, the more comfortable he can be that all assessed charges are legitimate and are levied with transparency.

The final topic was another point that the FCPA Guidance makes clear, which is not only do you need to assess your risks but you also need to manage your risk. Each Houston-based compliance officer discussed the risk profiles for their company and the FCPA risks that were presented to them. They each had a different focus for managing their attendant risk. It was a powerful way to view the clear import from the FCPA Guidance to assess your risk and then manage it.

One of the things that I found most fascinating were the lessons that I learned listening to my newfound Russian colleagues. While they may seem obvious when you think about some of these lessons. The first was regarding language. While all of our guests spoke English quite well, they provided a translator because the nuances of both compliance-speak and Texan would probably have been a bit too much for them to fully grasp. It made me understand that even with very good “English as a second language” speakers involved, it is far better to provide information and education in the native language. Clearly, when the FCPA Guidance suggested that a company’s Code of Conduct and its compliance training be in a subsidiary’s local language they were on to something important.

Another point was that the Russian compliance professionals innately understood that you need to look at several different factors on a company’s background in the performance of due diligence. One technique cited was the tendency of certain company owners to open and close several businesses, while running up huge debts and not paying them, thereby bankrupting not only their business but their unlucky suppliers. So there was a focus on company debt and length of time to pay suppliers that they believed was also a key factor in an appropriate due diligence investigation into a Russian company to determine if it was an acceptable business partner.

A final observation was the enthusiasm of the Russian compliance practitioners. Not only did they clearly understand that a company run ethically with good business practices was a better company; they also understood that Russian companies, who did business with US companies and were forced to have a FCPA compliance program, could help lead better business practices generally and more widely in Russia. In other words, they believed there is a market solution to help Russian companies do business ethically and that by requiring Russian companies to abide by anti-corruption laws like the FCPA and UK Bribery Act, it can help lead Russian businesses to more of an international position.

Our lunch ended and with much BBQ digested and we all said our good-byes. I hope that our Russian guests found us to be as gracious hosts as we found them to be guests. I also want to salute CIPE for organizing this trip and a shout out to my friends at the US Chamber of Commerce for putting together an NGO to help deliver business solutions to legal (and ethical) problems. As Mike Volkov wrote yesterday, compliance is much easier if you simply do not engage in bribery and corruption. CIPE helps non-US businesses and persons to follow that proscription and to help bring a more international effort to the fight against bribery and corruption.

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

Written by:

Thomas Fox

Compliance Evangelist on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.