FCPA Legislation Introduced to Allow Individuals and Companies to take Legal Action

On June 9, 2016 U.S. Representative Ed Perlmutter (CO-07) introduced legislation (H.R. 5438) that would expand the Foreign Corrupt Practices Act (FCPA).  Enforcement actions under the FCPA may only be brought by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC). The legislation introduced by Rep. Perlmutter, would also give individuals and companies the ability to take legal action against corporations who are violating the anti-bribery provisions of the FCPA.

In his press release, Rep. Perlmutter said, "This legislation helps encourage foreign companies to play by the rules or be brought to court.  Most importantly, it is a way to level the playing field and help U.S. companies compete abroad."

Key Amended Text:

"Authorized Plaintiffs. - Any person that violates subsection (a) shall be liable in an action brought in accordance with this subsection in any court of competent jurisdiction to any issuer that is subject to section 30A of the Securities and Exchange Act of 1934, domestic concern that is subject to this section, or other person that is a United States person, that is damaged by the violation of subsection (a) of this section, for damages caused to such issuer, domestic concern, or other person by the violation."

Key Link(s):

• Press Release
• Text - H.R. 5438 - Foreign Business Bribery Prohibition Act of 2016
• 15 USC 78dd-2: Prohibited foreign trade practices by domestic concerns

ISO 37001 Anti-bribery Management Systems - Gets Vote of Approval

On April 14, 2016 the International Organization for Standardization (ISO) announced the draft version of the new ISO 37001 Anti-Bribery Management Systems (ABMS) standard received a 91% vote of confidence. 

The ABMS "is designed to help organizations implement effective measures to prevent and address bribery, and instill a culture of honesty, transparency and integrity."   

The standard is intended to be used by small to large public, private, or voluntary sector companies.  The ABMS standard includes a few basic principles such as:

• Adopting an anti-bribery policy
• Appointing a person to oversee anti-bribery compliance
• Training
• Risk assessments and due diligence on projects and business associates
• Implementing financial and commercial controls
• Instituting reporting and investigation procedures

The standard is expected to be published in late 2016.

Key Links:

• Purchase the draft version of the ISO 37001 standard in the ISO Store
• ISO 37001 ABMS

DOJ Launches New FCPA Prosecutorial Guidance Pilot Program

On April 5, 2016 the Department of Justice (DOJ) Criminal Division announced a new one-year pilot program within the Fraud Section's FCPA Unit.  The pilot program provides guidance to DOJ prosecutors for resolutions in FCPA cases.  The program was designed to assist companies with their decision making process as to whether they should voluntarily self-disclose FCPA violations, cooperate with the Fraud Section, and when appropriate, correct gaps in their controls and compliance programs. 

The program describes what is meant by "voluntary self-disclosure", "full cooperation", and "timely and appropriate remediation".  The guidance states that when a company cooperates, remediates, and voluntarily self-discloses violations, it will be eligible for the full range of mitigation credit.  In the event a criminal resolution is warranted, a company may be granted a reduction of up to 50 percent below the low end of the applicable U.S. Sentencing Guidelines range.  In addition the company would generally not require the appointment of a monitor.

What are the reader's thoughts on the value of this pilot program?   

Related Documents:

• "Individual Accountability for Corporate Wrongdoing", by Deputy Attorney General Sally Yates, on September 9, 2015
• "The Fraud Section's Foreign Corrupt Practices Act Enforcement Plan and Guidance" on April 5, 2016