Private Sector Spurs Compliance

The message gets repeated and repeated – every company has to protect itself from an FCPA enforcement action by implementing a compliance program.  The Department has accomplished a significant goal – its aggressive FCPA enforcement program has deterred companies from violating the FCPA and spurred companies to increase compliance.

The ripple effect of the Department’s aggressive program, combined with international efforts to reduce corruption, has been extraordinary.  Around the globe countries are re-examining their corruption laws, and implementing new, more aggressive laws to reduce corruption. 

More quietly, but perhaps much more significantly, is the how the private sector is responding now to the risk of anti-corruption enforcement.  Lending institutions are now asking potential borrowers to supply their anti-corruption compliance program for review by the financial institution.  If the program is robust, the bank will lend the business the money.  If the program is lacking, the bank may decline to provide the money to the business.  Private investors want the same assurances on anti-corruption compliance. 

Political jawboning is certainly having an impact but far less than the business realities in the marketplace.  Banks and investors are demanding compliance in order to safeguard their investment – either a loan or an equity position in the business.  It makes sense and it is a sign of more to come.

 In the next few years, anti-corruption compliance will become as common as other compliance programs.  Businesses will have no choice but to implement such programs or lose access to capital and financing.  The Department has made its point and the marketplace is responding.

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