FCPA Compliance: Are You Prepared for the DOJ’s New Requirements on Thorough Due Diligence?

As of August 2022, there are around 100 Foreign Corrupt Practices Act (FCPA) investigations ongoing.

Why is this such a big concern?

Because the vast majority of FCPA enforcement actions over the past 10 years have involved some form of inadequate, insufficient, or even a total lack of investigative due diligence. And you don’t want to find yourself on the wrong end of the FCPA because your due diligence wasn’t considered thorough enough.

For example, Glencore received a $700 million fine for FCPA violations stemming from foreign bribery and market manipulation charges. In 2020, Goldman Sachs paid a whopping $3.3 billion in financial penalties for bribing high-ranking government officials in Malaysia. And Airbus paid $4 billion to settle global bribery and trade offenses.

More than ever, the DOJ and the SEC are focused on your company’s commitment to ethics and compliance, which includes staying on top of any risks with third-parties you might be using in your supply chain. In fact, 90% of FCPA enforcement actions are against companies who failed to conduct proper due diligence on third party vendors. Federal agencies today know whether or not a company has conducted its due diligence, especially when they investigate potential violations.

Unfortunately, most due diligence conducted by companies themselves find less than 1% of the potential FCPA issues that are out there and “check the box” diligence does not meet regulatory requirements.

To make sure you stay on the right side of any potential violations, you should be conducting deep due diligence investigations on any third parties to determine where they are actually doing business, who they are doing business with, how they are doing business, their financial strength and any risks they may bring to the table. Infortal specializes in Finding Bad Actors™ and rogue players to reduce your business risk exposure both at home and internationally from third party vendors, agents, distributors and other third party risks. Conducting enhanced due diligence investigations on key executives should not be an afterthought; by then it is too late to protect your business reputation.

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