The FCPA or Foreign Corrupt Practices Act (FCPA) was enacted to prevent fraud and corruption. One of its main mandates was to ensure that businesses achieve compliance in all business aspects, without using any illegal forms of strategy. From auditing to record-keeping, FCPA demands that businesses conduct transactions transparently. So, if you want to be on the safe side and don’t want to collide with FCPA, be comply. The following are the benefits of FCPA compliance to businesses. Keep reading.
Understanding the Basics
The FCPA is a national litigation focused on combating bribery. It’s among the first pieces of law to introduce corporate liability and responsibility for third parties, as well as, extra-territoriality for corruption offenses.
The prohibition of corrupt payments is specifically limited to foreign officials. With global jurisdiction, the FCPA compliance program is widely enforced. In fact, the current trend points towards heightened enforcement actions, fines, as well as, imprisonment.
Both the SEC and the DOJ takes into account the extent to which your company has self-reported and taken proper remedial actions when enforcing a lawful action. Besides, the two bodies will evaluate the adequacy of your company’s compliance program. But they don’t usually formulate requirements for compliance programs. It’s up to you to decide what best suits your business needs.
When evaluating compliance programs, you should ask yourself if the compliance program is well-designed, if it’s applied in good faith, and if it works appropriately. Each company can have different compliance needs depending on their size and level of risk exposure. Thus, there’s no single compliance program that suits the needs of every business. To design an effective compliance program, however, the FCPA anti-corruption policy recommends that a compliance program includes the following policies, as well as, procedures:
A Commitment to Fight Corruption
According to FCPA, a company’s compliance program should include a commitment from the top management team, as well as, a well-documented policy against corruption.
Code of Conduct
The code of conduct is the basis of an effective compliance program. Be sure to devise proper internal controls, documentation policies, disciplinary measures, as well as, auditing practices.
Individuals designated with oversight roles should be autonomous from management. Plus, they should have sufficient resources to implement the FCPA program correctly.
Companies should carefully analyze and address all the risks they face. This is one of the key requirements of the FCPA compliance program.
The FCPA requires every company to take the right steps to ensure that relevant policies and procedures have been effectively communicated throughout the organization.
Proper disciplinary measures should be put in place. Plus, adherence to compliance policies should also be incentivized throughout the organization.
The Benefits of Implementing an FCPA Compliance Policy
FCPA compliance can help businesses establish the competitive advantage they’re dying to achieve. If your company is expanding into a market where corruption is non-existent, you can easily differentiate yourself from the rest by offering high-quality products or services. Conversely, competitive advantage is determined by which business can bribe its way into the highest number of contracts.
Without FCPA, running a business can be very costly and risky. Thus, it’s always beneficial for your business to operate under the guidelines of a law that seeks to ensure that all companies around the globe are operating on a common regulatory plane.
The FCPA compliance infrastructure enables businesses to improve their quality control levels and achieve a heightened efficiency level that would be difficult to achieve through other means.
Reduced Business Risks
Every business strives to minimize risk as much as possible. Most of them are willing to embrace risks only when they’re sure it’s going to pay off. Companies that are striving to expand need to find effective ways to safeguard their reputational exposure at all costs. And this is particularly true if they intend to navigate cultural, as well as, social differences in new markets.
Being on the receiving end of an FCPA-related investigation or lawsuit can significantly destroy your company’s reputation. So, it’s always important to observe the rules and regulations laid out by the FCPA.
FCPA compliance acts as a reminder that partnering with the right expansion team is crucial when establishing a positive presence overseas. This program can help make it easier for you to venture into the international market.
If you want to take your business experience to the next level, it’s time you consider investing in FCPA compliance training. It’s a very simple, yet highly effective strategy that helps companies expand their boundaries overseas without spending so much money. So, what are you still waiting for? It’s time you formulate an effective compliance program that’ll make your business stand out.
Taking a bribe is like shifting goalposts when it comes to conducting business. It disadvantages other business establishments. To stop this undue advantage, FCPA was enacted. Among other things, this act was mandated to regulate how businesses are conducted so as to provide a level playground for all parties involved. Nowadays, businesses are required to have an FCPA compliance to conduct business. If you fail to comply with these regulations, you will be liable for lawsuits and fines. That’s why you should equip yourself with the best strategies for complying with FCPA regulations. Having this compliance gives you the confidence to conduct business in any part of the world. Plus, it will be easy to expand your operations.
According to legal experts, laws firms are handling an increased number of FCPA-related prosecutions, implementing more enforcement actions, and executing private lawsuits. This trend is projected to rise. However, you don’t have to fall into these pitfalls. You can avoid those annoying ling lawsuits. As a director, there are steps you can take to ensure that your company is FCPA compliant. From implementing a strong and effective compliance program to familiarizing yourself with all things FCPA compliance, there are a lot of things you can do to be on the safer side. The above are reasons why FCPA compliance is important.