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Posted 15 November 2012 | By Alexander Gaffney, RAC,
It can be difficult for companies-especially ones whose products are sold around the world, as many healthcare products are-to ensure every one of their employees are acting ethically and in accordance to the law. US Department of Justice (DOJ) officials would like to make it a bit easier for those companies to comply with at least one anti-bribery law: the Foreign Corrupt Practices Act.
The legislation, originally passed in the 1970s after congressional investigators found widespread efforts by international companies to bribe foreign officials to obtain or retain business they might not otherwise receive, is widely understood to be one of the most integral components to the US' anti-corruption efforts.
The law is famous for its harsh penalties and sanctions, which include a fine of up to $2 million, five years of imprisonment and individual fines of up to $100,000-all for each violation of the anti-bribery statute. In the case of a life sciences company that sanctions payments to numerous officials, these fines and penalties can quickly add up, and companies and individuals can face debarment from all federal programs even if they aren't sitting in a jail cell for decades.
"The FCPA is a critically important statute for combating corruption around the globe," DOJ explained. "Corruption has corrosive effects on democratic institutions, undermining public accountability and diverting public resources from important priorities such as health, education, and infrastructure. When business is won or lost based on how much a company is willing to pay in bribes rather than on the quality of its products and services, law-abiding companies are placed at a competitive disadvantage-and consumers lose."
The complexities of the law, however, make it challenging to understand. Since being first passed in 1977, it has been amended several times, and decades of case law and enforcement decisions have left a pathway that is at times confusing for companies trying to ensure compliance.
In an effort to boost understanding and compliance with the law, DOJ has released a lengthy (120 pages) and "unprecedented" resource guide on the FCPA.
"Our goal in preparing the Guide was to provide helpful information about the FCPA and our FCPA enforcement efforts to businesses that want to compete fairly in foreign markets, so that those businesses can maximize their ability to comply with the FCPA in the most effective and efficient way suitable to their business and the markets in which they operate," wrote DOJ in a joint statement with the Securities and Exchange Commission. "There may no other area of the law where DOJ or SEC has provided the public with as much information about our enforcement approach and priorities."
Continued DOJ: "The Guide takes a multi-faceted approach toward setting forth the statute's requirements and providing insights into DOJ and SEC's enforcement practices. It uses hypotheticals, examples of enforcement actions and matters DOJ and SEC have declined to pursue, and summaries of applicable case law and DOJ opinion releases."
The entire guide, "A resource guide to the US FCPA," may be found on DOJ's website.
Tags: SEC, Bribery, FCPA, Corruption, Guide, Latest News