Lawyer Monthly Magazine - March 2020 Edition

Having been found guilty entails being possibly excluded from participation in public tenders in the EU for several years. These are significant losses and that is why the investments into compliance should not be neglected. Besides, third parties are nowadays more cautious and pay much more attention to the compliance of their business partners than a few years ago as a precondition to get involved with them. The interesting thing is that the Foreign Corrupt Practices Act was established in 1977, but it started to be actually enforced almost 30 years later. The CEE/SEE corporate criminal liability and anti-bribery laws are only a few years old and the authorities are still struggling to use them effectively. The US authorities have much longer experience with enforcing the FCPA. The extraterritorial reach of the FCPA is vast, which is also due to the fact that it has never been tested sufficiently by courts – most of the cases are settled. activities occurring in this part of the world, they should really focus on compliance issues and being able to present an effective compliance management system, to enable them to emit as much corporate criminal liability as possible. Why is the FCPA so important here and what impact can the violations of the Act in jurisdictions outside the US have? The Foreign Corrupt Practices Act gives the United States authorities effective power to prosecute US and foreign companies with certain ties to the United States jurisdiction for bribery of foreign officials. The word “foreign” is particularly important, indicating that the legislation covers illegal activities (bribery of foreign officials) outside the United States, in every other jurisdiction where a company or an individual have set up their relevant business. If, for example, non-compliant behaviour, or even suspicious behaviour, is detected in one of the company’s CEE/SEE subsidiaries, the company can be held liable for this, not only in that particular jurisdiction, but also in the United States, even if the activity occurring in the US subsidiary was legal. The sanction being imposed by the DOJ is extremely high and excludes additional costs, such as legal fees, costs of monitorship, costs associated with updating the compliance system (etc). Alleged violations of the FCPA are extremely sensitive to deal with. The potential of reputational damage is tremendous and it has serious consequences with respect to business. 51 MAR 2020 | WWW.LAWYER-MONTHLY.COM An Interview With “Having been found guilty entails being possibly excluded from participation in public tenders in the EU for several years.”