Blog Posts: International Compliance
Earlier this year, President Obama proposed reforming outdated export control laws by transferring certain items from the U.S. Munitions List (USML) to the more flexible Commerce Control List (CCL). The USML lists defense articles, services and technology regulated by the State Department’s International Traffic in Arms Regulations (ITAR). In contrast, items on the CCL contain both commercial and military applications and are regulated by the Commerce Department’s Export Administration Regulations (EAR). By changing the classification of certain parts and components, U.S. manufacturers can more easily supply their overseas customers with less sensitive defense-related items.
Transparency International recently released the 2011 Bribe Payers Index, which ranked 28 of the world’s biggest economies based on the likelihood that companies based in those countries will use bribes when conducting business abroad. The survey scored each country on a scale of zero to 10, with zero representing companies that "always" engage in bribery and 10 representing companies that "never" offer bribes. The results are based on the views of more than 3,000 business executives who answered questions about countries they had dealt with over the past year. The executives were asked three questions: (1) how often companies engaged in bribery of low-level public officials; (2) how often companies used improper contributions to achieve influence with high-ranking politicians or political parties; and (3) how often companies paid or received bribes from private firms. The average score from these questions determined the ranking of each country.
A review of the performance of the U.S. Department of Justice’s Antitrust Division for 2012 shows a continued increase in the successful enforcement of antitrust laws. The EU successfully enforced its competition laws as well.
Those who have been waiting for further guidance on the Foreign Corrupt Practices Act (FCPA) can finally rejoice. The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have issued a new resource guide that clarifies their position on the FCPA. Among the important subjects the guide addresses are (1) the definition of a foreign official, (2) gifts and entertainment, and (3) the hallmarks of an effective corporate compliance program.
According to the sixth annual Global Fraud Survey conducted by Kroll Advisory Solutions, the number of fraud cases reported globally dropped in the past year as more companies have adopted anti-corruption measures. In 2011, approximately 75% of companies reported at least one incident of fraud, compared to only 61% in 2012.
Recent updated statements of policy relating to the UK Bribery Act indicate that the UK is taking the Act seriously, according to a client alert from Morrison & Foerster, which predicts that a greater number of high-profile cases will be brought under the Act in the future.
The Wall Street Journal and other observers expect that the Department of Justice (DOJ) will issue new guidance on the Foreign Corrupt Practices Act (FCPA) as soon as sometime this week.
A recent settlement of a bribery complaint announced by the Department of Justice demonstrates the DOJ's willingness to reduce penalties for companies that cooperate with investigations.
When subsidiary companies bribe foreign officials, their parent companies may have to pay millions of dollars in penalties and fines to the Justice Department (DOJ) and the Securities and Exchange Commission (SEC), even if the parent companies didn’t know about the bribery at the time it was taking place. That’s what happened recently to Orthofix, a Texas-based orthopedic medical device company. The DOJ and the SEC alleged that Promeca, a Mexico City-based wholly owned subsidiary of Orthofix, paid more than $300,000 in bribes, which it code-named “chocolates,” to Mexican officials. Orthofix was charged with violating the Foreign Corrupt Practices Act (FCPA) and the Exchange Act. It agreed to pay $2.2 million to the DOJ to defer prosecution and $5.2 million to the SEC in penalties and interest.
Are your employees prepared to answer questions about your company's compliance with federal anti-boycott laws? U.S. lawmakers adopted anti-boycott laws in the 1970s to discourage companies from participating in boycotts not sanctioned by the federal government. Relevant laws include amendments to the Export Administration Act and the 1976 Tax Reform Act.