FCPA Compliance Software - Selection Tips For Compliance Managers
The Foreign Corrupt Practices Act (FCPA) has provisions for maintaining accounting transparency under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.
There is a general increase in FCPA enforcement activity in recent years in relation to bribery. Developing a robust FCPA compliance program is a top priority for compliance officers of companies under FCPA regulation. This article considers the major factors affecting FCPA compliance program development and the role of FCPA compliance software.
A climate of aggressive enforcements
FCPA compliance related investigations has reached 120 in 2009 compared to 100 in 2008 as per Wall Street Journal.
Recent news stories suggest that there is clearly a trend towards more aggressive investigations on FCPA compliance and enforcement proceedings. The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have initiated proceedings even against individuals. These proceedings are also resulting in more severe punishments in the form of fines for corporations and jail time for individuals. Efforts for FCPA compliance is therefore a top priority for all concerned compliance officers.
FCPA Compliance efforts outside USA
FCPA compliance is not limited to U.S alone. The FCPA’s foreign payment prohibition has become an increasing concern as U.S. companies expand and globalize. The U.S. DOJ and the SEC have increased actions through co-ordination with enforcement agencies in other countries, mainly through treaties and conventions. OECD Convention on Combating Bribery of Foreign Public Officials is an example of such a convention. The countries signing the OECD convention have their own equivalent bribery and anti-corruption statutes. DOJ is committed to making certain these treaty countries carry out their obligations under the OECD convention to prosecute and share information with the U.S.
Why FCPA Compliance Software is important?
In recent years, the DOJ has increasingly used deferred prosecution agreements in FCPA compliance cases to provide a reward to defendants who voluntarily disclose and cooperate in the DOJ’s investigation. For example, York International and the DOJ entered into a three-year deferred prosecution agreement. This requires its compliance program and procedures reviewed by an independent monitor for three years. The DOJ agreed to defer prosecution in recognition of York’s implementation of enhanced compliance policies and procedures and its willingness to engage an independent monitor.
A lot of the defence for a firm will depend on being able to demonstrate to the prosecutors that the firm has taken all reasonable steps to prevent this from happening in the first place. A key element of this will be implementing a monitoring programme which reviews and tests on a regular basis and records conclusion along with test result data.
You could do this manually, however using the right system could save you substantial amount of work and provide you with an easily accessible audit trail. The ways in which an FCPA Compliance Software can help an organisation are - 1) have a measurable mechanism to mitigate FCPA breaches and 2) easily disclose a traceable FCPA compliance program to avail a less sentence or even a pass. There are four considerations while selecting FCPA compliance software. Effective FCPA compliance software should help to 1) implement policies and procedures and track its acceptance by employees 2) traceability of training to make sure that the policies are uniformly understood by employees 3) workflow and process for managing change 4) create compliance tests and show their traceability with the policies.
About the author
John Cyriac is the CEO of ComplianceTrack.Com. Before starting Compliance Track, his experience includes working with the team which made the Java programming language at Javasoft, CEO of the European division of a private equity backed software company in Europe, founding and running a market-leading document Management Company. He also holds a Master’s degree in law.