January-Report - page 6

January 2013 CBA REPORT
cover article
• The purpose of the entity’s activities;
• The exclusive or controlling power
vested in the entity to administer its
designated functions;
• The level of financial support by the
foreign state, including subsidies,
special tax treatment and loans;
• The entity’s provision of services to
the jurisdiction’s residents;
• Whether the government end or
purpose sought to be achieved is ex-
pressed in the policies of the foreign
government; and
• The general perception that the
entity is performing official govern-
ment functions.
Successor Liability.
The business community also sought
clarification concerning successor li-
ability. The DOJ/SEC advises that if a
company subject to the FCPA acquires a
foreign company, which was not previ-
ously subject to the FCPA’s jurisdiction,
the acquisition will not directly create
liability for the purchaser.
The Resource
Guide confirmed that there have been
a significant number of declinations of
FCPA enforcement actions where an
acquiring company voluntarily dis-
closed an FCPA violation by an acquired
company, remediated the conduct, and
integrated the acquired company into
corporate compliance programs.
Significance of Compliance
Programs Confirmed
The Resource Guide suggests that
companies with robust compliance pro-
grams will find that their investments in
compliance are justified. While recog-
nizing that there is no “one size fits all”
compliance program, the Resource Guide
champions a risk-based assessment of
the effectiveness of compliance programs
and focuses on three basic questions for
any compliance professional:
• Is the company’s compliance pro-
gram well designed?
• Is it being applied in good faith?;
• Does it work?
The SEC and DOJ admit that a
company’s failure to prevent every viola-
tion does not necessarily mean that a
compliance program is not effective.
Equally, “even when that program did
not prevent the particular FCPA viola-
tion that gave rise to the investigation”,
the DOJ and SEC may decline to pursue
charges against the company based on
an ineffective compliance program and
may even seek to reward a company
for its program.
The importance of a
vigorous compliance program is high-
lighted by the fact that of the nine factors
considered by the DOJ/SEC in deciding
whether to pursue FCPA enforcement ac-
tions, three relate to compliance program
The Resource Guide also provides a
list of “hallmarks” of an effective compli-
ance program including:
• A commitment from senior manage-
ment to a “culture of compliance.”;
• A company code of conduct, which
is clear, concise and accessible to all
employees and those conducting
business on the company’s behalf.”;
• Assigned responsibility for oversight
and implementation of a compliance
program to one or more specific se-
nior executives including “adequate
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