Control Risks asks: what can we expect from forthcoming FCPA guidance and how will it affect the evolution of corporate compliance?

There has been much speculation surrounding the scope and impact of forthcoming guidance on the Foreign Corrupt Practices Act (FCPA). With the UK Bribery Act now in force, some have asked whether the US Department of Justice (DoJ) will go as far as creating a formal corporate defence à la ‘adequate procedures’. This seems unlikely. The DoJ has made it clear no changes will be made that could be seen to water down the legislation or reduce the threat of personal liability. However, the guidance is expected to clarify which measures the DoJ expects companies to have in place to avoid the heaviest penalties.

So, can we expect the guidance to change anything inside companies? In some respects, possibly not. Companies needing to benchmark their compliance programmes against US regulatory standards can already refer to FCPA settlements and deferred prosecution agreements for insight. Forthcoming DoJ guidance is likely to consolidate these principles, as opposed to signposting any change in direction. However, the guidance comes at a time when more companies are asking themselves a key question: How can I reassure myself that my compliance programme is effective?

In Control Risks’ experience, companies can struggle to answer this question if they focus on assessing prevention measures in isolation. The primary objective of any compliance programme is to prevent improper activity, but 100% success is never possible. The true test of a compliance programme is in its ability to detect problems early, allowing the organisation to respond quickly and fairly. For this to happen, ‘state-of-the-art’ policies and procedures are not enough. Organisations need what Assistant Attorney General Lanny Breuer calls “a culture of compliance”. But how do you know if you have one? Measuring your organisation’s ability to detect problems early is one of the best places to start.

About the author: Lucy Norton is Associate Director for Anti-corruption Consulting, based in London. Lucy manages a network of sector and regional specialists that provide strategic risk management and problem-solving advice to organisations tackling bribery, corruption and wider financial crime and business integrity challenges.