Foreign Corrupt Practices Act: Did the Wal-Mart case get your attention?


On April 21st, the New York Times published their investigation into Wal-Mart’s expansion into Mexico.  According to the NY Times investigation, Wal-Mart relied on a “campaign of bribery” to fuel their expansion into the country, which now accounts for about 1/5 of all Wal-Mart stores.  When the alleged bribery was brought to the attention of the Wal-Mart executives, they focused more on covering up and shutting down the investigation, according to the article, rather than reporting the potential violations of the Foreign Corrupt Practices Act to the SEC and the US Department of Justice.

Was their wrongdoing at Wal-Mart?  What will the consequences be?  We’ll leave that up to the countless blogs and articles already dedicated to that topic.  The topic of anti-corruption and the Foreign Corrupt Practices Act is one that we’ve addressed in the policyIQ blog several times – but we suspect that it hasn’t felt like a priority for many companies.  It seems clear that the FCPA cannot be ignored, and if you haven’t been paying attention before, surely you are now.

If you are doing any business internationally and you don’t have an anti-corruption program, get started now.

1. Start with a risk assessment.

It might be that your international business is extremely low risk – and as a result, your anti-corruption program will be justifiably minor. Your risk assessment should evaluate the overall risk, and for more complex international organizations, you should evaluate which areas of your business and which positions within your organizational structure are the highest risk.

2. Establish your Policies and Procedures

At the very least you should have a policy in place that addresses what constitutes bribery and corruption, the consequences of participating in it, and your company’s commitment to investigating it. If you are a high risk organization, however, your policies need to go further. You need to address specific situations, and provide procedures and guidance on how to handle those situations.  You also want to establish vendor due diligence procedures to carefully vet vendors prior to creating partnerships.

3. Train your employees

The level of training will again depend on your risk assessment. Publishing and communicating the policy may be enough if you have established that the risk is very low. Formal training, policy sign-offs and personal conversations may be necessary, however, for the high risk organizations. High risk employees should also have a higher level of training.

4. Train your vendors, partners and stakeholders

For high risk organizations who rely on vendors and partners worldwide to act on their behalf, it’s not enough to just keep the training internal. Your company can be held responsible for the actions taken on your behalf – and you need to assure that they are acting within the guidelines.

5. Document everything

Your anti-corruption program is intended to prevent corruption and bribery. That should be its primary purpose.  The program should also have a secondary goal of minimizing any investigative costs should a corruption or bribery claim come up.  If the Department of Justice or the SEC chooses to investigate, having clearly documented policies, procedures, training plans, training records, internal reporting procedures, gift and entertainment expense documentation, and vendor due diligence records will keep investigation and discovery costs low.

policyIQ can help

Last fall, we presented a webinar about how you can implement your anti-corruption program in policyIQ.  You can check out the follow-up blog post and recording at any time – or contact us and we’ll be happy to help!  If you aren’t sure where to start with your anti-corruption program, reach out and we’ll connect you with Resources Global consultants with experience to help guide you.

This entry was posted in Industry News, Solutions and tagged , , by Chris Burd. Bookmark the permalink.

About Chris Burd

Chris is the Vice President of the policyIQ group at RGP. She gets geeky about compliance and technology, and gets to spend every day working at the crossroads of the two. With policyIQ since 2005, Chris has worked with hundreds of policyIQ clients to implement technology and enhance their internal compliance environment. In past lives, Chris worked as a system implementation consultant, a e-commerce specialist, a customer service call center manager, and - for one short but memorable summer during high school - a machine operator on midnight shift in a plastics factory. In her free time, she spoils her nieces, reads too many books, and spends more time than she should taking photos of her cats. She's on a mission to visit the hometown of every US President - so far managing to get to 14. She would like to be a rock star when she grows up.

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