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A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.
cooperated with the investigation, and incorporated or suspicions of misconduct by the company, its
the acquired company into its compliance program employees, or agents. An effective investigations
and internal controls. On the other hand, SEC took structure will also have an established means of
action against the acquired company, and DOJ documenting the company’s response, including any
took action against a subsidiary of the acquired disciplinary or remediation measures taken.
company. 344 When pre-acquisition due diligence In addition to having a mechanism for
is not possible, DOJ has described procedures, responding to the specific incident of misconduct,
contained in Opinion Procedure Release No. 08-02, the company’s program should also integrate
pursuant to which companies can nevertheless be lessons learned from any misconduct into the
rewarded if they choose to conduct thorough post- company’s policies, training, and controls. To do
acquisition FCPA due diligence. 345 so, a company will need to analyze the root causes
FCPA due diligence, however, is normally only of the misconduct to timely and appropriately
a portion of the compliance process for mergers remediate those causes to prevent future
and acquisitions. DOJ and SEC evaluate whether compliance breaches.
the acquiring company promptly incorporated the
acquired company into all of its internal controls, Other Guidance on Compliance and
including its compliance program. Companies should International Best Practices
consider training new employees, reevaluating In addition to this guide, DOJ has published
third parties under company standards, and, where guidance concerning the Evaluation of Corporate
appropriate, conducting audits on new business Compliance Programs. 347 The Evaluation of
units. Corporate Compliance Programs is meant to assist
For example, as a result of due diligence prosecutors in making informed decisions as to
conducted by a California-based issuer before whether, and to what extent, the corporation’s
acquiring the majority interest in a joint venture, compliance program was effective at the time
the issuer learned of corrupt payments to obtain of the offense, and is effective at the time of a
business. However, the issuer only implemented charging decision or resolution, for purposes
its internal controls “halfway” so as not to “choke of determining the appropriate: (1) form of any
the sales engine and cause a distraction for the resolution or prosecution; (2) monetary penalty,
sales guys.” As a result, the improper payments if any; and (3) compliance obligations contained
continued, and the issuer was held liable for in any corporate criminal resolution (e.g.,
violating the FCPA’s internal controls and books and monitorship or reporting obligations). The DOJ
records provisions. 346 compliance guidance provides companies insight
Investigation, Analysis, and Remediation of into the types of questions that prosecutors ask
Misconduct to evaluate and assess a company’s compliance
The truest measure of an effective compliance program.
program is how it responds to misconduct. In addition, the U.S. Departments of
Accordingly, for a compliance program to be truly Commerce and State have both issued
effective, it should have a well-functioning and publications that contain guidance regarding
appropriately funded mechanism for the timely compliance programs. The Department of
and thorough investigations of any allegations Commerce’s International Trade Administration
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