Upon first glance of the above title, you might ask yourself why should I care and how does it affect my life?
It is a fair response, and applies to any organization conducting business overseas. Moreover, it is particularly relevant to any operation that has a physical presence in a country including employees, facilities, and product inventory.
I might as well show part of my hand here. I’m no fan of our Department of Justice and collided with them almost ten years ago. They answer to no one and that is a fact.
The DOJ recently implemented a FCPA Pilot Program announcing first declinations. What does that entail and mean?
The Pilot Program is a voluntary way for companies to disclose and report fraud. To avoid prison time, operating censures, business disruptions, organizations pay the DOJ and they gladly accept the funds rather than putting further effort and resources into litigation.
This program is nothing new by the DOJ but a thinly disguised plea agreement with large companies. They have little interest in expending significant labor and monetary resources involving complex international fraud.
Most importantly, if your organization conducts business overseas, I would encourage you to consider the following points and reflect on your ethics/compliance practices:
1. The majority of FCPA violations are blatant actions and disregard for laws. Organizations who commit fraud, bribery, extortion, and other unscrupulous acts are systematically and morally toxic. They got caught. What are you doing in your organizations in the way of ethics/compliance training that prevents the above conduct from crippling operations?
2. What risk management systems are in place to detect irregularities and how do you know they work?
3. Do you deploy outside and independent experts who analyze your systems and report their effectiveness or lack thereof to a Board of Directors and the Leadership Teams? Is this information reported directly to each department or filtered down?
4. Have you created an employee hotline where unethical or illegal conduct can be reported? Is whistleblowing supported, anonymous, and taken seriously?
5. Do you review previous violations and put a best practices program in place to stop further violations? If previous fraud took place, did you analyze how the fraud began, why did it start, what are the consequences of unethical conduct, and what were the lessons learned?
My friends please remember this: respect, consideration, and courtesy matter a lot. Treat others fairly, decently, and equally.
Consult your moral compasses every chance you get and monitor your progress.
You know the battle cry: do your best each day. No one can ask more or less from any of us.
All the best/blessings, Mark
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