Tuesday, March 9, 2010

Benchmarking FCPA Compliance

The Organization for Economic Co-Operation and Development ("OECD") recently released (see here) "the most comprehensive guidance ever provided to companies and business organizations by an international organization" on internal controls, ethics and compliance programs to combat bribery.

Mark Mendelsohn, the DOJ's current FCPA "top cop" was recently quoted (see here) as saying that the new OECD guidance has the "endorsement of the U.S. government."

Thus, those subject to the FCPA would be wise to take notice.

The OECD guidance, "Good Practice Guidance on Internal Controls, Ethics and Compliance" is included as Annex II in the "Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (see here). The guidance is "intended to serve as non-legally binding guidance to companies in establishing effective internal controls, ethics, and compliance programs or measures for preventing and detecting foreign bribery."

Substantively, the new OECD guidance is similar to the effective elements of an FCPA compliance program the DOJ frequently includes in its FCPA resolution documents (see here) as well as the elements of an "Effective Compliance and Ethics Program" in the U.S. Sentencing Guidelines (see here).


While on the topic of the OECD, it has always intrigued me that the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (see here), on which numerous anti-corruption laws are based, uses the term "foreign public official" rather than the "foreign official" term used by the FCPA.

Is a "foreign public official" the same as a "foreign official?" In most cases, the answer would seem to be yes. However, is an employee of a state-owned or state-controlled enterprise (often a commercial entity with publicly traded stock and other attributes of a commercial enterprise) a "foreign public official?"

We all know the enforcement agencies' view - yes such employees are "foreign officials" under the FCPA.


While still on the topic of the OECD, in light of the BAE bribery, yet no bribery circus (see here for prior posts) it is interesting to review Annex I of the above referenced document titled "Good Practice Guidance on Implementing Specific Articles of the Convention of Combating Bribery of Foreign Public Officials in International Business Transactions."

Article 5: Enforcement states - "Member countries should be vigilant in ensuring that investigations and prosecutions of the bribery of foreign public officials in international business transactions are not influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved, in compliance with Article 5 of the OECD Anti Bribery Convention."

Both the U.S. and U.K. are "member countries."

1 comment:

  1. Article 1.4.(a) of the OECD Anti-Bribery Convention defines "foreign public official" as including "any person exercising a public function for a foreign country, including for a public agency or public enterprise..." The Commentaries to the Convention define "public enterprise" as "any enterprise, regardless of its legal form, over which a government, or governments, may, directly or indirectly, exercise a dominant influence. This is deemed to be the case, inter alia, when the government or governments hold the majority of the enterprise's subscribed capital, control the majority votes attaching to shares issued by the enterprise, or can appoint a majority of the members of the enterprise's administrative or managerial or supervisory bodÿ."