The Risk: What You Don't Know Can Hurt You
Most sophisticated business people know that the Foreign Corrupt Practices Act (FCPA) makes it unlawful for U.S. or foreign corporations with substantial connections to the United States to provide anything of value to a foreign official for the purpose of obtaining or retaining business.
What is less known is that corporations subject to the FCPA are vicariously liable for the actions of their subsidiaries, employees and agents, even if such actions were not requested, encouraged or known to their management. Moreover, corporations that invest in or acquire foreign companies are liable under the FCPA for the violations of their targets that occurred prior to the investment or acquisition.
The most important steps companies can take to mitigate FCPA risks are:
- maintain an internal compliance program including an updated written policy, regular training programs and compliance monitoring audits;
- conduct robust due diligence on agents, partners and acquisition targets; and
- respond appropriately when violations are discovered.
These three core elements of a compliance program will not only reduce the likelihood of a violation, but may be favorably considered by the DOJ and SEC in enforcement actions. As a general rule, companies that have full compliance programs in place when a violation occurs will be treated better by the SEC and DOJ than companies that do not.
The Right Team
Recognizing the increasing risk to our clients posed by the FCPA, Stoel Rives has a dedicated team of attorneys to assist our clients in FCPA risk mitigation and remedy. Our FCPA team consists of attorneys from several of our practice groups, including International Trade, White Collar Crime, Litigation, Securities, Mergers and Acquisitions, and Tax, among others. Stoel Rives attorneys have substantial experience in FCPA compliance matters, including advising several companies—from large publicly-traded corporations to small regional exporters and manufacturers—on FCPA compliance.
Our FCPA team assists clients with the following:
- Preparing and implementing compliance plans
- Drafting and updating written FCPA compliance policies that are tailored to a company's industry, geographic and operational risk profile
- Conducting companywide FCPA risk assessments
- Developing reports to boards and senior management
- Training senior management, key operating personnel and employees
- Preparing and reviewing agreements with FCPA risk issues, including foreign agent agreements, compensation arrangements, and merger and acquisition agreements
- Conducting FCPA transactional due diligence prior to an investment, merger or acquisition
- Conducting due diligence on potential agents or representatives
- Interpreting the application of the FCPA and developing compliance strategies in challenging FCPA environments
- Conducting internal FCPA compliance audits
- Conducting internal FCPA investigations in the event a violation is suspected
- Advising clients concerning the desirability of voluntary disclosures
- Representing clients before the DOJ and SEC
- Advising on required SEC disclosure under both the 1934 Securities Exchange Act and Sarbanes-Oxley Act
- Advising on related tax consequences
- Assisting clients to interpret and apply the "books and records" and "internal accounting controls" provisions of the FCPA
The Stoel Rives FCPA Team:
Ronald J. Sim
Christopher J. Voss
Jamie S. Kilberg
Jason E. Prince