The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Recent Issue Headlines

Vol. 2, No. 20 (Oct. 9, 2013) Print IssuePrint This Issue

  • When and How Companies Should Include FCPA Risk Disclosures in SEC Filings (Part Two of Three)

    More and more companies are disclosing FCPA-specific risks in their SEC filings before an FCPA violation is even on their radar.  Some, however, question whether that kind of disclosure is advisable.  FCPA experts are sharply divided on whether the benefits outweigh the disadvantages of such disclosure, and guidance from the government is scarce and vague.  Should an FCPA violation, past or potential, influence this decision?  If a company does disclose FCPA risks, what should it be telling regulators and the public about those risks in its filings?  To help shed light on this controversial but critical issue, The FCPA Report is publishing a multi-part series addressing the strategy and mechanics of disclosure of FCPA risk in the Risk Factors section of SEC filings.  This article, the second in the series, discusses the consequences of including FCPA-specific disclosures and provides insight into drafting risk-based disclosure.  The first article in the series discussed the SEC rules governing such disclosure and the evolution of the disclosure of risk factors related to international operations, and examined both sides of the debate as to whether such disclosure is necessary and prudent.  The third and final article in the series will include a compendium of actual FCPA Risk Factor disclosures from recent SEC filings to aid practitioners in drafting their own disclosures, compiled with help from Intelligize’s database and search tools.  For more on disclosing corruption investigations in SEC filings, see The FCPA Report’s Guide on that topic – Parts OneTwo and Three, and the compendium of relevant disclosures in Part Four.

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  • Sample Questions to Ask Third Parties When Initiating Anti-Corruption Due Diligence

    This guest article, by Nardello & Co., provides an example of a questionnaire to be completed by third parties when a company is performing FCPA due diligence on such parties.  This questionnaire can be customized to specific circumstances, industries or geographies, and can serve as the basis for a risk assessment, further anti-corruption diligence or on-the-ground investigations.  The questionnaire includes corporate questions as well as individual questions.  For further insight on third-party due diligence, see “Conducting Effective Anti-Corruption Due Diligence on Third Parties: An Interview with the Principals of Nardello & Company,” The FCPA Report, Vol. 2, No. 19 (Sep. 26, 2013).

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  • Conducting Effective Due Diligence on Third Parties:  An Interview with Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard

    Many companies rely heavily on third parties when operating internationally.  Among other things, third parties serve as sales agents, handle customs issues, distribute product and educate the company on local practices.  Hiring third parties helps increase revenue, but also puts the company at significant risk of violating the FCPA.  If a third party bribes a foreign official, the company that hired the party can be held liable.  Effective initial due diligence is crucial in avoiding FCPA liability based on the acts or omissions of third parties, as is continuous monitoring of third parties.  Recognizing this, The FCPA Report is publishing a series of interviews with experts from different disciplines – from an outside law firm, an in-house compliance department and an investigative firm – on best practices when handling due diligence on third parties.  This article, the third in the series, includes our interview with Gwen Romack, Director, Global Anti-Corruption and U.S. Public Sector Compliance, at HP.  The first article in the series contained an interview with Alice Fisher, a partner at Latham & Watkins and former head of the Criminal Division at the DOJ.  The second article in the series contained an interview with Nardello & Co.’s FCPA team, a group of seasoned investigators with extensive experience in anti-corruption initiatives.

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  • How Can Companies Capture the Telecom, Energy and Resources Opportunities in Africa While Mitigating Corruption Risks?

    “Africa is bigger than we think.”  Thomas Laryea, a partner at Dentons US LLP, and his fellow panelists at a recent panel sponsored by Dentons and AlixPartners described just how big it is – in terms of size, opportunity and risk.  Panelists discussed Africa-specific issues that companies doing or contemplating doing business there should know, and also presented a summary of results of a survey done by Dentons and AlixPartners, the full results of which The FCPA Report has exclusively.  The survey measured companies’ perception of the strategic importance of doing business in Africa, their understanding of African business opportunities and the corruption risks and compliance issues executives face in the region.  The survey can be interpreted to reveal the gap between the stereotypical perceptions of a monolithic continent with endemic corruption and the more nuanced reality of a diverse Africa with tremendous opportunity, if risks are carefully managed.

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  • Ernst & Young’s 2013 Asia-Pacific Fraud Survey Highlights Disconnect Between Company Policies and Employee Perceptions

    The Asia-Pacific region is an enticing one for companies around the world, with its enormous markets, resources and opportunities.  But there is also significant corruption risk in the region, and that risk may be increasing.  In an extensive recent survey of fraud and corruption in eight APAC countries, Ernst & Young found that “fraudulent practices are on the rise” in APAC nations, and businesses operating there face heightened corruption risk due to weak controls and a weakening economic environment, which is leading businesses to take shortcuts.  EY interviewed employees of large corporations to gauge their perspectives on the extent of corruption in their respective countries and on the effectiveness of various anti-corruption controls.  For a global perspective from EY, see “Ernst & Young’s 2012 Global Fraud Survey Highlights Significant Challenges in Dealing with Corruption and Bribery Risks,” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).

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  • Survey Reveals the Contours and Content of Bribery in the U.K. Construction Industry

    Forty-nine percent of U.K. construction professionals believe that corruption is common within the U.K. construction industry, a decrease of 2% since 2006.  That was one of the key findings of a survey conducted and published in September by the Chartered Institute of Building (CIOB), the world’s largest professional body for construction management and leadership.  CIOB’s findings indicate several potential reasons for those levels of corruption.  The majority of construction professionals who believe that corruption is a problem in the U.K. cited economic issues as the primary reason for this phenomenon.

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  • Litigator and Former U.S. Attorney Chuck Stevens Joins Gibson Dunn in San Francisco 

    Gibson, Dunn & Crutcher LLP recently announced that Charles J. Stevens has returned to the firm in its San Francisco office as a partner.  Stevens is the former U.S. Attorney for the Eastern District of California.

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  • Saverio Mirarchi, Expert in Anti-Money Laundering and Sanctions, Joins Treliant Risk Advisors

    On October 7, 2013, Treliant Risk Advisors announced that Saverio Mirarchi, a senior compliance officer with decades of experience at major banks and financial services organizations, is joining Treliant.  See “International Corruption Risks Facing Financial Institutions,” The FCPA Report, Vol. 1, No. 4 (Jul. 25, 2012).

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