FCPA Investigation Checklist

  • The FCPA’s two main provisions are the bribery provisions and the accounting and recordkeeping provisions. The Act prohibits bribing foreign officials to obtain or retain business and requires companies to maintain adequate books, records, and internal controls.
  • Companies should consider developing a FCPA Investigation Checklist that provides tips for companies to follow to effectively coordinate internal investigations and respond to external federal investigations.
  • Critical components of this FCPA Investigation Checklist include retaining experienced FCPA lawyers with a track record of litigation success; preparing for document preservation and document requests; preparing and training company personnel for the investigation; dealing with suspected FCPA violations from third parties; and encouraging cooperation with federal authorities.
  • Consider hiring an experienced team of FCPA attorneys to help you prepare a FCPA Checklist unique to the needs of your business and effectively prepare for either an internal or external investigation.

Experienced FCPA Defense Team

If you are under investigation for FCPA violations or believe an investigation may be initiated, it is time to hire a FCPA defense attorney.

The federal government takes FCPA violations seriously due to the potential threats to U.S. integrity and harm to U.S. businesses that result from foreign bribes.

Penalties for FCPA violations include civil and criminal penalties, jail time, inability to do business with certain entities such as the U.S. government, and significant reputational harm.

Whether the investigation is being conducted internally or was brought right away by the SEC or DOJ, it is important to understand how to prepare for an investigation.

At Oberheiden, P.C., our attorneys include former FBI agents, former U.S. attorneys, and former prosecutors. This inside perspective enables us to give you the best chance of success through our aggressive defense strategies and dedicated work ethic.

Do not wait to get in touch with a qualified defense attorney today. Put Oberheiden, P.C. on your side to advise you on FCPA investigations and fight for your reputation

Introduction to the Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (“FCPA”) was enacted in 1977. It contains two important provisions:

  • (1) the antibribery provisions (15 U.S.C. §§ 78dd-1, 78dd-2, and 78dd-3), and
  • (2) the accounting and recordkeeping provisions (15 U.S.C. § 78m(b)).

The FCPA prohibits the bribing of foreign officials to obtain or retain business. It also requires that companies maintain adequate books, records, and internal controls in their accounting practices.

It is critical for companies to be mindful of the FCPA enforcement authority as well as the various aspects of the federal investigative process.

Checklist for FCPA Investigation

Below we provide a useful “FCPA Investigation Checklist” for companies to review and consider incorporating when preparing for a FCPA investigation. It covers a variety of topics from compliance policies and internal investigations to federal cooperation and enforcement proceedings.

This Checklist provides useful tips for companies to incorporate into their internal operations to most effectively organize internal investigations and respond to an investigation alleging FCPA violations.

Retain counsel with a track record of FCPA litigation success:

  • When a company first becomes aware that a FCPA investigation is coming, it should first hire a FCPA defense attorney. Counsel can help the company determine whether the alleged violation is legitimate and substantiated.
  • If the charges are not legitimate based on counsel’s independent review of the matter, then counsel can help the company resolve the matter internally without the intervention of the federal government. Common cases of “illegitimate” FCPA allegations include those from disgruntled employees or former employees.
  • If the charges are legitimate, then counsel can help the company proceed with the next stages and explain what the company can expect.
  • Using counsel at the onset of an investigation may help alert the government that the company is interested in rectifying the problem. Cooperation efforts with the government may produce more lenient outcomes for the company.

Determine the scope of the expected investigation:

  • The company should ensure that its first objective is to outline the intended scope of the investigation, especially regarding the scope of internal investigations where the company has more leeway in shaping investigative procedures.
  • This is usually done by conducting a risk assessment of the company’s current situation.
  • Regarding an appropriately defined scope, it is important that the company’s upper management and executives support the plan and provide an adequate budget for the internal investigation’s operations.
  • The scope should be periodically adjusted and updated as new facts are uncovered from the internal investigation.

Prepare for document preservation and document requests:

  • This step is most useful where the federal government is conducting an external investigation into the company.
  • The federal government often requests multiple documents from the company as a part of its investigation into possible FCPA violations.
  • Companies can prepare for this by ensuring that their operations have adequate data retention protocols, backup systems, and auto-recovery and document saving software—whether the information is held on networks, hard drives, laptops, the cloud, or handheld devices.
  • In today’s technological era, this also includes making sure that electronic documents, e-mails, text messages, voicemails, etc. are kept intact.

Prepare and train company personnel for the investigation:

  • First and foremost, everything should be planned and executed with counsel at the company’s side.
  • This task includes organizing interviews of personnel and explaining to them the process of an internal investigation and what to do in the case of a federal investigation.

How to proceed after determining that the suspected FCPA violations be reported internally to management:

  • If company counsel determines that FCPA violations should be reported internally, disclosures are usually made to the company’s board of directors or audit committee.
  • The matter is then aimed to be resolved internally as opposed to getting federal authorities involved.

How to proceed after determining that the suspected FCPA violations be reported externally to federal authorities:

  • Sometimes, a company and its counsel may find it preferable to disclose the FCPA violation to federal authorities such as the SEC or DOJ.
  • In making this determination, the company and counsel should consider many factors such as the nature and severity of the violation, materiality, whether it was approved by management, and whether federal authorities may find out anyway.
  • Making timely disclosures, reporting violations, and cooperating with federal authorities are healthy options for businesses and signal to the government that the company seeks to rectify the violation. It may also help with reduced penalties.

Make required disclosures to external auditors:

  • The Sarbanes-Oxley Act of 2002 (“SOX”) requires public companies to make certain disclosures and comply with several internal control requirements.
  • Notably, SOX requires that the company’s CEO and CFO certify the accuracy and effectiveness of the company’s financial statements and internal controls.
  • A part of these disclosures may necessitate the disclosure of FCPA violations and weaknesses in the company’s FCPA compliance programs.
  • Counsel can guide companies as to how to make these disclosures in order to avoid any allegations later on that the company was trying to conceal the violations.

Dealing with suspected FCPA violations from third parties:

  • It is often third parties that are responsible for FCPA violations. It is therefore very important for the company to consult with counsel on how it can safeguard its operations and projects from third party FCPA liability.
  • Dealing with third parties can be very tricky because it is sometimes not feasible to fire the third party.
  • Counsel may recommend that the company utilize compliance certifications or other compliance program when dealing with third parties and further require that the third party comply with such certification and compliance program requirements.

Understand defenses to violations of the FCPA:

  • The company and its counsel must evaluate whether the company is able to assert any defenses to violations of the FCPA.
  • Usual defenses that counsel can advise their clients on include actions initiated outside the statute of limitations; duress; payments permitted under the local laws of the foreign country; reasonable and bona fide expenditures; and facilitating payments.

Practice and encourage cooperation with federal authorities:

  • Overall, cooperation with the government when the company is under investigation may help to lessen the severity of the penalties imposed on the company.
  • Providing timely disclosures and access to all relevant documentation are optimal ways that companies can cooperate with federal authorities. A company’s counsel can guide companies in their cooperation efforts.
  • Cooperation is an important factor that the SEC and DOJ take under consideration at all stages. For instance, the SEC and DOJ often award companies for their cooperation by providing leniency in imposing penalties, promoting settlements, and reducing charges.

Need Advice Regarding FCPA Violations?

Being investigated for FCPA violations can be a worrying time for your company due to the potential penalties involved and uncertainty in the investigative process.

If you are being investigated for alleged FCPA violations, it is time to get in touch with an experienced team of FCPA attorneys.

At Oberheiden, P.C., our attorneys regularly counsel our clients on the federal investigative process as well as the procedures involved with internal investigations.

We can help you evaluate your current compliance program, strengthen it to deter potential violations, evaluate possible defenses, and ensure cooperation with federal authorities to give you the best chance of success.

Call us today at 888-680-1745 or contact our office for a free consultation so we can advise you on what to expect from a FCPA investigation and how to prepare.

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