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How to Leverage Transparency and Documentation

“No brilliance is required in law, just common sense and relatively clean fingernails,” John Mortimer (author and creator of Rumpole of the Bailey).

Lawyers and compliance professionals like to pat themselves on the back.  Or as I like to say — “don’t break your arm patting yourself on the back.”

In the anti-corruption compliance area, we professionals like to advise everyone  to “document, document and document.”  It may seem very obvious to everyone why it is a good idea to document compliance decisions.  Lawyers love to document and spend more time documenting then creating — perhaps that is one valid criticism of the profession.

What is the real importance of documentation?  Why is it so essential?

To put it simply — if you document good faith attempts to comply with the law, “no one will go to jail.”  Documentation and transparency are inconsistent with criminal intent — if applied, they negate criminal intent and act as an insurance policy for the company and every professional involved in the issue.

Criminal prosecutions are inconsistent with good faith attempts to comply with the law.  While everyone cites the fines and the jail sentences being meted out for FCPA violations, it is important to focus on the facts of the relevant cases.  Companies pay fines when they completely ignore the law, ignore the need for due diligence, and ignore the actions of rogue employees.  Individuals are punished when they act knowingly and with intent to commit bribery, not when they act in good faith or a mistaken belief of legality.

In close cases where reasonable people may disagree about the application f the law to the specific facts, transparency and documentation, if implemented, will tip the balance in favor of going forward.  With a good faith inetrpretation of the law and a reasonable position, the company should move forward, recognizing the risk but with legal protections in hand.

Companies have different risk appetites.  With that basic principle in mind, documentation and transparency can be built around that risk appetitie so that a strategy for new projects and ventures can be developed.  Risk management, in this context, is nothing more than common sense and “clean fingernails.”

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