Federal agencies are cracking down on businesses that aren't compliant with the Foreign Corrupt Practices Act (FCPA).
The US Department of Justice, the Securities and Exchange Commission and the FBI are joining forces on a rigorous anti-corruption campaign, targeting not only a company's employees, but also its agents, contractors, investors and suppliers.
It appears that Pharmaceutical and Life Sciences companies are at the top of the DOJ's list for investigations, and a leading firm in this sector recently agreed to pay $70 million in FCPA penalties. However, supply chain and procurement executives of all multi-national corporations now face distinct risks and business challenges.
In general terms, the FCPA consists of two core elements:
The anti-bribery provision, which prohibits companies from giving money, gifts, or anything of value to obtain or retain business.
The internal records and process standards provision, which requires companies to keep accurate records and maintain clear, detailed and adequate controls with employees and trading partners (including suppliers, intermediaries and subsidiaries) to protect against improper payments or influence.
Even though relationships between suppliers and other business entities are often opaque and difficult to track, too many companies have discovered the hard way that "willful blindness" only increases their culpability in the eyes of Federal regulators. Today, lack of evidence to verify proper, compliant management of these trading relationships is itself a cause for investigation. In fact, companies having no knowledge of corrupt payments can be prosecuted even if they were aware of potential warning signs and consciously failed to conduct due diligence and implement controls.
What can you do to mitigate your risk?
For starters, get informed. Aravo is hosting a one-hour webinar next Wednesday, June 29, 2011, at 9am Pacific (12 pm Eastern) so you can hear how leading pharma companies are working to ensure compliance with FCPA.
Please join us and our featured speaker William Barry, of Richards Kibbe & Orbe LLP, and learn best practices for FCPA program design and tracking around:
FCPA Prohibited Payments
Internal Compliance Programs
Record Keeping and Accounting Controls Provision
Related Laws for Foreign Business Transactions
FCPA Risk Mitigation Essentials
Due Diligence on Third Parties/Transactions
Ongoing Tracking and Risk Alerts
In addition, we'll explore how other Pharma and Life Sciences companies with FCPA program concerns have used automated solutions to effectively manage their programs.
After all, most companies are finding that it is enormously challenging to proactively drive internal (employee) and external (supplier and subsidiary) compliance with the FCPA. A company's visibility into global operations may be limited due to language differences, time zones, communication breakdowns, disparate cultural norms, or simple lack of oversight. What's more, supply chain executives tell Aravo that they have difficulty enforcing FCPA compliance policy due to challenges managing multiple supplier master databases, multi-tiered supplier relationships, limited resources and an inability to cost-effectively monitor and mitigate supplier risk in a global operating arena.
As a result, in many cases, proactive tracking of anti-corruption policy is simply non-existent.
Don't take that kind of risk, especially now that regulators are using large fines and high-profile public hearings to cracking down on violators.
Please join us on Wednesday, June 29, 2011, for our special webinar designed to help you tackle your FCPA concerns (registration required) and start minimizing the significant risk of non-compliance.