Survey finds few companies tightening controls to prevent FCPA violations

Below is an article from Sherri Qualters of the National Law Journal. I usually do not print the entire article, but since the article was short, and the link requires a subscription, I thought would make an exception in this case. I have worked many FCPA cases in the past, if the below article is accurate, document reivew for this type of work is going nowhere fast. Thanks to Steve Geisler for directing me to this article.

Less than one-third of companies polled in a recent survey are tightening internal controls to prevent Foreign Corrupt Practices Act violations, despite heightened government enforcement. The Foreign Corrupt Practices Act (FCPA) imposes criminal penalties on companies or individuals who do business in the U.S. who offer a bribe, pay one or authorize one to a foreign government official for business gain.

Of more than 620 financial services, telecommunications and manufacturing executives who responded to the poll by Deloitte Financial Advisory Services, only 32% reported that they're enhancing their internal procedures. The respondents believed FCPA violations were most likely to arise in certain types of situations, with 30.3% citing agent or consulting relationships; 28.4% indicating that foreign subsidiaries of U.S. companies were most at risk; and 21.8% naming strategic alliance partnerships.

The U.S. Department of Justice has stepped up FCPA investigations and enforcements in the past couple of years. The agency brought 16 FCPA enforcement actions in 2007, compared with three in 2004. "FCPA prosecutions have increased dramatically in recent years, and all indications are that this trend will continue," said Ed Rial, leader of Deloitte's Foreign Corrupt Practices Act Consulting practice.

"As more U.S. companies seek to expand into developing foreign markets ­ many of which have spotty reputations for corruption - the need for effective anti-corruption programs and controls to prevent and detect potential violations is critical."

Update: Here is the article from Deliotte.