On November 14, 2012, the Department of Justice (DOJ) Criminal Division and the Securities and Exchange Commission (SEC) Enforcement Division published A Resource Guide to the U.S. Foreign Corrupt Practices Act (the FCPA Resource Guide or the Guide) to “provide helpful information [about FCPA compliance] to enterprises of all shapes and sizes — from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world.”
Since its publication, the Guide has been the default framework against which companies seeking to elevate their anti-corruption compliance programs measure those compliance efforts. While some newer frameworks and guidance have come into existence since, such as ISO 37001, the Yates Memo and the Evaluation of Corporate Compliance Programs, the FCPA Resource Guide remains the most important reference guide for FCPA neophytes and experts alike.
As we marked the five-year anniversary of the publication last month, and in honor of International Anti-Corruption Day tomorrow, December 9, I want to offer my thoughts, along with those of two other anti-corruption experts whom I asked to weigh in on the Guide’s continued importance.
Does the government take into account whether a company uses the Guide in its compliance efforts?
Five years later, the government is still referring to the FCPA Resource Guide and the Hallmarks of Effective Compliance Programs therein when reviewing compliance programs. At Protiviti, we strongly advise clients to consider organizing and building their anti-corruption program documents around this guidance. We recommend that organizations not only say they’ve used the Guide in standing up their programs, but structure their programs in a way that demonstrates that the Guide and the Hallmarks within it have influenced the creation of the program documents and the controls underlying the program.
For example, in preparing written documentation intended to influence their employees’ compliance, companies would do well to use the Guide as a “tutorial” and to go so far as to organize and label relevant sections in their program using the same terminology as the Guide so that the government has no doubt that the FCPA Resource Guide informed their efforts.
Raja Chatterjee, Tishman Speyer’s Chief Risk Officer, agrees. “As stated by [former Assistant Attorney General, Criminal Division, Department of Justice] Lanny Breuer and [former Director of Enforcement, Securities and Exchange Commission] Rob Khuzami, [when the Guide was first released] the Guide was an ‘unprecedented undertaking’ by DOJ and SEC,” he said in an email. “The government devoted considerable time and resources in drafting such a comprehensive guide. It is the Government’s collective and shared wisdom, so I fully expect [companies] to use it as their benchmark when evaluating corporate compliance programs.”
Can the Guide make it easier for the government to conclude your anti-corruption compliance program is effective?
Given the amount of effort that has gone into creating the Guide and the fact that it is prominently referenced in more recent DOJ publications and public commentary by representatives of both the SEC and the DOJ, the answer to that question is an easy “yes.” Over the years, we have worked with many companies undergoing government investigations; the tone of a company’s interactions with the government is often set early, and the ethics and compliance program information provided at the outset of those discussions can play a significant influence on the government’s posture in the investigation.
Organizing your compliance guidance in a way that tracks the Hallmarks of Effective Compliance Programs certainly makes it easier for investigators to conclude that, if nothing else, at least you are utilizing the right framework. While a lot more needs to follow before any inferences are drawn as to whether a program meets the definition of “effective,” this utilization of the Guide can start the discussion on a positive note, leading the government to conclude that your company “gets it.”
Hector Gonzalez, Partner at Dechert LLP, added the following in response to this question: “A company should not find itself in a position where the U.S. government is trying to determine what served as a ‘blueprint’ for the company’s anti-corruption compliance program. The Hallmarks of Effective Compliance Programs set forth in plain English what the government considers anti-corruption compliance best practices. Organizing a company’s anti-corruption program around such best practices would demonstrate to the U.S. government that the company takes compliance seriously.”
And Chatterjee adds: “It is highly unusual for the Government to provide a Compliance roadmap as they have with the Guide. Companies would be remiss not to follow the Guide, and do so at their own peril.”
It seems clear that the bottom line is this: If the government uses the Guide as a benchmark, so should you.
The FCPA Resource Guide remains a very relevant, utilitarian and approachable resource that is as useful to anti-corruption novices as it is to seasoned compliance pros. If anything, its relevance and importance has been amplified by subsequent publications and pronouncements, most notably the Evaluation of Corporate Compliance Programs, in which the Hallmarks of Effective Compliance Programs were coupled with sample questions that company compliance or internal audit personnel can use when measuring the effectiveness of their programs and the controls underlying them.
Until and unless the Government publishes guidance that expressly supersedes the FCPA Resource Guide, companies should continue to ensure that their anti-corruption compliance program mirrors the guidance that it provides and that stakeholders can effectively answer all of the sample questions. Companies should follow the Guide not because the government says so, but because it is a proven formula for ensuring that organizations have done everything they can to operationalize a compliance program and the ethical culture embodied in that guidance.