Anti-Bribery Compliance: How Protected is Your Crystal Castle?

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By Arghemar Perez
SCCE Certified Compliance & Ethics Professional
Ethical Alliance Certified Member
Credited to Practice Law in Venezuela

How deeply is an organization exposed when it comes to dealing with foreign public officials? This critical question might redefine the scope of anti-bribery compliance systems considering the various thresholds to be met under applicable laws. Management of cross-border trade under anti-bribery parameters has historically implied the consideration of a broad scope of actors, including an organization’s board, personnel, providers, clients and related third parties who are located overseas. Having a clear identification of the connecting factors and elements defining what an act of bribery implies, along with proper management of guiding principles to establish adequate or general precautionary procedures to prevent acts of bribery, builds solid foundations for effective corporate programs. This is an appropriate formula for bribery risk mitigation under any applicable set of rules, and at the same time, lays the groundwork for a defense to a potential anti-bribery offense.

Failure of organizations to implement adequate compliance programs under the FCPA or to prevent bribery under the UK Bribery Act is deemed itself to be a legal violation. Such liability extends to actions performed directly by the organization through its employees and also to actions carried out abroad, by agents on their behalf. The element “agent” deserves special attention since organizations are normally faced with unrelated entities or individuals, operating in foreign jurisdictions, with specific business cultures and practices. It is here where appropriate third party due diligence and customized monitoring and training become differentiating elements.

It is any organization’s duty to define who its business agents are [1] and it should consider treating them as its own personnel when it comes to assessing bribery risk exposure. Also, when dealing with agents, careful attention should be given to benchmarking –excessive commissions to agents or consultants have been identified as a red flag-, due diligence -conflict and background checks giving the FCPA violation “knowing” standard- as well as documentation of such third party relationship, monitoring –arm’s length- and recordkeeping of correlated information, considering that enforcement authorities around the world evaluate a particular action for purposes of opening an investigation or bringing charges on fact-specific analysis, based on relevant facts and circumstances.

The anti-bribery crusade demands the organizations have proportionate procedures in place, as long as particular elements are the point of departure. There is no prescriptive one-size-fits-all solution. By cleverly customizing your zero-tolerance anti-bribery matrix, your organization is placed in the best possible position in the event that isolated events occur, in spite of your best efforts.

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[1][1] Under the FCPA, liability of an organization extends to bribery acts undertaken by foreign nationals as long as an agent of a domestic concern, although prosecutors continue to hold-on to the conspiracy or aiding and abetting theory in order to assert individual liability for corporate acts –e.g., United States v. Hoskins, No. 12-238, 2015, as well as to bribery acts undertaken with “instrumentalities” understood as “an entity controlled by the government of a foreign country that performs a function the controlling government treats as its own” –e.g., United States v. Joel Esquenazi and Carlos Rodriguez, No. 11-15331, 2014-. Under the UK Bribery Act, an organization -whether domestic or foreign conducting business in the UK, in whole or in part- shall be liable for a bribery act carried out by a third party –entity or individual- outside the UK, when “associated” with such organization.

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