Bass, Berry & Sims attorney Thad McBride recently authored an article for Corporate Compliance Insights discussing the current state of Foreign Corrupt Practices Act (FCPA) enforcement and the implications for companies operating internationally. While corporate FCPA enforcement activity has declined recently, Thad explains that businesses should not interpret fewer cases as a reduction in overall compliance risk. In fact, organizations continue to face significant exposure under export controls, economic sanctions, and other cross-border regulatory regimes.
In the article, Thad notes that the U.S. Department of Justice’s (DOJ) current approach to FCPA enforcement appears more targeted, focusing on matters involving national security concerns; cartels and transnational criminal organizations; harm to U.S. companies; and significant misconduct involving bribery, fraud, or concealment.
A key theme Thad explores is the continuing importance of third-party risk management. Customs brokers, distributors, freight forwarders, sales agents, and other intermediaries frequently create compliance risks across multiple regulatory areas. As Thad explains, “Due diligence needs to be an ongoing activity and regularly refreshed based on risk rather than treated as a one-time onboarding exercise.” He encourages companies to continually monitor third-party relationships through auditing, payment testing, and other processes to identify unusual or unsupported transactions.
Thad also highlights the benefits available under the DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy. Drawing lessons from recent enforcement matters, he explains how timely self-disclosure, cooperation, and remediation can significantly reduce enforcement exposure and, in some cases, result in a declination of prosecution. The article contrasts outcomes in recent corporate resolutions to demonstrate the value of proactive compliance and prompt reporting decisions.
The article concludes that while the FCPA enforcement landscape may be changing, companies engaged in international business should remain focused on maintaining robust compliance programs, monitoring third-party relationships, and establishing effective processes for escalating and evaluating potential misconduct.
Read the full article, “The State of FCPA Enforcement: Fewer Cases, but Risk Remains,” that was published on September 16 in Corporate Compliance Insights.