Bribery continues to be a major legal and ethical problem for U.S. businesses operating in overseas markets. The Foreign Corrupt Practices Act, which criminalizes bribery of foreign officials in order to access foreign markets, can have very severe penalties for U.S. firms whose employees or overseas agents are caught committing (or attempting to commit) bribery.
An article found at news.yahoo.com by Reuters reports on a recent case that highlights this problem…
Florida-based defense company IAP Worldwide Services Inc will pay $7.1 million to settle a U.S. investigation into an alleged conspiracy to bribe Kuwaiti officials to win a government contract, the U.S. Justice Department said on Tuesday.
A former vice president of IAP, James Michael Rama, 69, of Lynchburg, Virginia, also pleaded guilty earlier on Tuesday in a Virginia federal court to participating in the illegal scheme, prosecutors said in a statement.
A lawyer for Rama was not immediately identifiable.
According to prosecutors, in February 2006 senior executives at IAP, including Rama, set up a shell company called Ramaco to compete in the first phase of a bid to provide surveillance capabilities, including closed-circuit television, to Kuwait’s Ministry of the Interior.
There are many ways that firms operating in the global marketplace can protect themselves from exposure to this kind of liability or minimize their liability if one of their agents violates the law. A comprehensive due diligence investigation of any new overseas vendors or agents can significantly reduce the risk by eliminating those vendors with checkered histories or serious conflicts of interests. Secondly, once concerns are raised that a company’s representatives may have bribed, or attempted to bribe, foreign officials, the best way for the company to minimize its liability exposure is to conduct a swift, thorough, and impartial internal investigation. Utilizing a reputable outside agency to conduct the investigation is an effective method for insuring impartiality and earning credibility with law enforcement.
For more information on how Radius Investigations can assist you in conducting international due diligence, and/or internal investigations, contact us or call 888-698-0077.
Conducting cross-border investigations is something that we do quite a bit of at Radius Investigations. In their recent article published at insidecounsel.com entitled, “4 Strategies to Improve Cross-Border Investigation Readiness“, authors Tiffany R. Moseley and Amy Conway-Hatcher write:
Much like military campaigns, cross-border investigations are inherently complex, driven by unique facts, shifting priorities and necessarily shaped by local terrain. Both also require decisive leaders ready to make quick decisions and lead large teams. And, just as there is no way to predict every aspect of a battle, there is no one-size-fits-all cross-border crisis plan or a fool-proof cross-border investigation checklist. General counsel cannot possibly predict and plan for all of the unexpected pitfalls bound to arise in a complex, dynamic cross-border investigation, but they can take steps to anticipate likely issues so that they are not caught flat-footed.
The most crucial step is to engage in a planning exercise with key stakeholders that accounts for the company’s structure, priorities, geographic footprint and operational risks, and that clearly identifies the internal and external assets available to protect and defend the company. Create a core list of cross-border issues the company likely will confront to plan for the identifiable challenges but, more importantly, discuss how your team can work together to respond quickly, efficiently and creatively to unexpected pitfalls. Ultimately, preparation—not a cookie-cutter plan—will help make your company mission-ready for the next cross-border crisis. Below are four key topics to jump-start the discussion with your team of stakeholders to increase your company’s cross-border investigation readiness.
We agree with the authors of the above article that a cross-border crisis relating to a multinational business will create many unexpected issues that can catch you off guard if you’re not prepared. However, through proper planning and preparation you can assure the success of the investigations that will follow.