CORRUPTION

International Affairs Forum Fall 2016
activity, remediating issues, and undertaking
certain compliance obligations, would see a
considerable reduction in their fines. While
companies certainly appreciate reduced fines,
the benefit of disclosure has not always been
clear.
The pilot program has memorialized the
government’s policy towards full cooperation,
voluntary disclosure, and remediation. If a
company takes certain steps, they will receive
a reduction in fines or even potentially a
declination. Companies are not eligible for
the same type of discount or declination if the
government initiates an investigation and then
the company cooperates. Companies must
proactively disclose violations and cooperate with
the government to receive a benefit.
So, the recent declinations have not been
surprising. The companies were good candidates
for the pilot program given their disclosures
and the facts of the particular cases. It is good
that they resolved those cases fairly quickly
because companies and FCPA attorneys
frequently complain about the length of FCPA
investigations. The government is trying to prove
to corporate America and other critics of the
FCPA that they are not only serious but able to
provide an example of what to expect under the
program.
How should government contractors
establish an effective ethics and compliance
policy?
government contractor compliance programs.
Whereas ethics and compliance is critically
important in the commercial sector, developing
an ethics and compliance program is not required
by law. Conversely, the Federal Acquisition
Regulations require government contractors to
implement an ethics and compliance program. If
you’re a contractor of a certain size performing a
contract of a certain amount, you must have an
ethics and compliance program in place in order
to be eligible for a US government contract.
Although it is legally required for government
contractors, one would argue that if you’re a
large multi-national US (commercial) corporation
without an ethics and compliance program, that
is not a good practice and potentially exposes a
company to significant liability.
On the commercial side, having a good ethics
and compliance program is a part of being a
good corporate citizen. It is rare that you see
very large US-based multi-national companies
that have not invested in ethics and compliance.
Because of FCPA enforcement, US multinational
companies are aware that they need
to invest in compliance. Not only does it help
prevent corruption, it also can help mitigate the
consequences of corruption if discovered.
In recent years, we have seen the development
of a global anti-corruption compliance standard.
There are some variations in the rules relating
to government contractors, but it is basically
a reiteration of the same best practices that
commercial companies should follow.
Today, government contractors must follow the
same or similar best practices as the commercial
sector. Although, as a highly regulated industry,
government contractors have greater compliance
obligations than the commercial sector, the best
practices are quite similar. One difference is
the mandatory versus discretionary nature of
What are your reflections on the Panama
Papers and what are the impacts on anticorruption
efforts going forward?
I think it has had a tremendous impact on the
organizations that have been calling for the
disclosure of beneficial ownership information for
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