New Guidance on FCPA Arrives, Just in Time for the 35th Anniversary of FCPA

NEW YORK, Nov. 16, 2012 /PRNewswire/ -- As Department of Justice (DOJ) and Securities and Exchange Commission (SEC) guidance on Foreign Corrupt Practices Act (FCPA) enforcement arrives, so does the 35-year anniversary of the law on Dec. 19, 2012.  FCPA compliance concerns remain for corporate leaders, yet use of technology to manage increasingly expansive programs remains low, according to a new Deloitte poll.

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"Companies have their anti-corruption New Year's resolutions cut out for them thanks to the new guidance from regulators on enforcement of the FCPA," said Bill Pollard, a partner in the FCPA consulting practice of Deloitte Financial Advisory Services LLP.  "The DOJ and SEC expect companies to take a risk-based approach to employing technology to support their FCPA programs.  Throughout the new 120-page guide they provide examples of companies utilizing technology to monitor gift payments or conduct and monitor third party due diligence."

Only 6 percent of executives say their companies use data visualization and analytics effectively for anti-corruption purposes.  In fact, more than one-third (36.1 percent) do not use analytics at all as part of their anti-corruption programs.

"It is surprising so few companies are using analytics effectively in their anti-corruption programs even though regulators are starting to expect it in FCPA compliance," said Anthony DeSantis, principal in the data analytics practice of Deloitte Financial Advisory Services LLP.  "Anti-corruption analytics can distill insights from massive amounts of data and help identify both historic and potential schemes.  Effective utilization of data visualization, coupled with analytics, may allow companies to identify previously unknown trends, target potential high-risk areas with improved risk scoring, locate geospatial patterns unique to their operations, and gain deeper insight into potential compliance program improvements."

More than one-half of executives (55.4 percent) plan to improve their companies' corruption prevention and detection programs in 2013.  However, nearly one-quarter of respondents (23.2 percent) believe the cost of developing and maintaining those programs will be the biggest challenge companies face in the New Year.

"Establishing and maintaining a cost-effective FCPA compliance program can be challenging," continued Pollard.  "But, improvements in internal compliance communications, encouragement of better cross-team collaboration, incentives for employees who report suspicious activities can cost few hard dollars.  Those lower-investment efforts are all activities highlighted in the new FCPA guidance as practices the DOJ and SEC consider when evaluating the effectiveness of corporate compliance programs."

Nearly two-thirds (63.6 percent) of executives say their companies' finance teams should do more to support their compliance colleagues' anti-corruption efforts. 

"Far more people with finance titles than compliance titles responded to our poll," added Pollard.  "I think finance might be telling compliance they are ready to help enhance anti-corruption compliance programs."

Concerning incentives, nearly one-half of respondents (48.5 percent) say offering rewards to hotline whistleblowers who share suspicions of corrupt activity encourages earlier internal reporting.  

About the poll
More than 2,100 professionals from industries including financial services, consumer products, industrial products, technology, media and telecommunications responded to polling questions during the webcast, "The Foreign Corrupt Practices Act: 35 Years of Focusing on Anti-corruption." 

Deloitte Foreign Corrupt Practices Act (FCPA) Consulting
Deloitte's FCPA Consulting practice helps organizations navigate FCPA risk and respond to potential violations. Utilizing the network of Deloitte member firms and their affiliates including their forensic resources in the United States, Canada, Europe, Russia, Africa, Latin America and Asia, the practice has worked on a variety of FCPA engagements including investigations, acquisition due diligence and compliance program implementation and assessments in over fifty countries for some of the world's leading companies. 

As used in this document, "Deloitte" means Deloitte Financial Advisory Services LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.  Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte Foreign Corrupt Practices Act Consulting