Global companies are being urged to tighten up their anti-corruption policies in the face of increasingly stringent US regulations. Tougher US anti-corruption laws are more than just a US company concern, warned US accounting and consulting firm J H Cohn. Non-US companies are undergoing scrutiny from the US authorities as they step up anti-corruption enforcement efforts under the Foreign Corrupt Practices Act (FCPA).

The number of FCPA cases is on the increase, and 11 out of 20 cases in 2010 involved non-US parent companies, including notable names such as Alcatel-Lucent and DaimlerChrysler.


"The costs can be enormous for companies found to be in violation of the FCPA and similar anti-corruption laws,” said J H Cohn’s principal of internal audit services George Gallinger. “Any company operating in the US should have robust anti-corruption policies supported by senior management and should ensure employees receive training in them.

“The US authorities want to see more enforcement actions taken by their foreign counterparts. In the meantime, they will continue to target companies and individuals in countries where anti-corruption enforcement actions are lax. Both US and non-US companies should learn from the recent enforcement actions and be able to show that they have been proactively trying to prevent and deter corruption and bribery in their organisations.”

J H Cohn advises that the best defence a company has in the face of an allegation under FCPA and related statutes is to show that it has an active compliance programme which monitors company activities in this area. There are numerous steps a company can take to ensure it does not fall foul of these enforcement measures, according to the firm.

Key issues for companies to consider include: effectiveness of compliance and whistle-blowing policies; the need for local knowledge of all local anti-corruption laws; controlling third-party risks (the vast majority of FCPA violations occur as a result of wrongdoing by a third-party vendor acting on behalf of a company); strict but customised guidance on travel and entertainment expenses; and taking action – how a company acts in the first week is crucial to controlling the damage and potential cost of compliance breaches.