FCPA compliance in the time of COVID-19 has been saved
FCPA compliance in the time of COVID-19
Heightened focus on anti-bribery procedures
US and global regulators continued to actively enforce anti-corruption laws—including the Foreign Corrupt Practices Act (FCPA)—in 2019, with activity (both in terms of number of enforcement actions as well as monetary fines collected) increasing as compared to 2018. Global enforcement authorities continued to update existing and/or issue new guidance around anti-corruption, including updates to the Corporate Enforcement Policy and Evaluation of Corporate Compliance Programs from the DOJ.
Companies shouldn’t put their foot on the brakes on anti-corruption compliance
On June 1, 2020, the DOJ again amended the Guidance to (among other items) place greater emphasis on two key areas: First, the updated Guidance makes it clear that, in addition to evaluating whether a company’s compliance program is implemented effectively, regulators will also assess the degree to which it is "adequately resourced and empowered to function effectively," and places greater emphasis on the risk of under-resourcing. Second, the updated Guidance introduces a new factor that regulators will consider when evaluating compliance programs–data resource and access.
All in all, the revised Guidance underscores the continued importance the DOJ will be placing on FCPA compliance, as well as additional areas for companies to consider when evaluating their own programs.
Fast-forward to present day and the COVID-19 pandemic is presenting additional significant financial, operational, and compliance challenges to global organizations, including disruptions in supply chains, reductions in staff and compliance budgets, displacement resulting in employees working remotely, and travel restrictions. Due to these factors and the number of other concerns that management is responding to, it may be tempting for companies to “put their foot on the brakes” on their own anti-corruption compliance efforts, believing there may be decreased regulatory enforcement or scrutiny around such areas. However, that is unlikely to be the case. Using the financial crisis as a barometer, FCPA enforcement activity continued (and even increased) in the subsequent years, and we would not be surprised if there was a similar pattern for this crisis.
The business community appears to be aware of the heightened fraud and corruption risk companies face. Deloitte conducted a poll of compliance professionals during a recent webcast, and approximately 70 percent of respondents expected an increase in fraud perpetrated against their company, and approximately 65 percent reported that they expected corruption/kickbacks and other types of improper payment schemes to increase the most as a result of the current economic climate.