Anti-Corruption and Language Barriers. There are Solutions to This.

Anti-Corruption and Language Barriers. There are Solutions to This.

tweet me:
Is your anti-corruption policy understandable to 3rd parties? If not, SEC will fine you.

Multimedia from this Release

Thursday, March 5, 2015 - 3:05pm

CONTENT: Article

Global business is increasing and many government agencies are looking for ways to make sure anti-corruption and ethical practices are being followed when conducting or acquiring new business. As companies begin to expand into select regions of the world, it is imperative to have, whomever they are doing business with, to understand the ethics and standards of doing business. Many companies that conduct business abroad run the risk of unethical practices being conducted by their 3rd party business partner or vendor. In order to avoid issues such as this, it is recommended to have a good policy in place followed by well-put procedures, and a good records keeping process.  In an article written by Louis Rothberg, of the National Law Review, he writes about a Massachusetts based global manufacturers of scientific instruments being fined for violating FCPA regulations. These fines were issued by the Securities Exchange Commission for failure to release their anti-corruption policies and procedures to 3rd party business partners and vendors in their native languages.

“The SEC stated that the respondent failed to implement an adequate internal controls system to address the potential FCPA problems posed by its ownership of the China Offices, which sold their products primarily to SOEs. One of the missing internal controls was the failure to use and train employees in their own language. For example, the respondent did not translate its training presentations on FCPA, ethics, or compliance issues into local languages, including Mandarin. And, although the respondent implemented an FCPA policy, it failed to translate that policy into Mandarin and relied mainly on its China-based managers to ensure that employees understood the potential FCPA implications of doing business with SOEs.”

The question that routinely comes to mind is, what good is an anti-corruption policy if your own business partners are unable to understand it and follow it?

“The respondent also failed to adequately monitor and supervise the senior executives at its China Offices to ensure that they enforced the appropriate anticorruption policies or kept accurate records that concerned payments to Chinese government officials. The China Offices had no independent compliance staff or an internal audit function that had authority to intervene into management decisions and, if appropriate, take remedial actions.”

A solid policy, procedures and records should be a main focus for any company doing business globally. More companies are seeing the implications of either not having something in place or not taking the necessary steps to have their business partners and vendors adequately informed for instances on corruption. For more information and to see FCPA and OECD suggested guidelines for Policies, Procedures and Records, click here.