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CCCA_V3No3_Corruption-FIN.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 9/16/09 9:48 PM Page 36 Feature Taking the initiative A warning to compliance officers who aren’t yet worried about 2 Develop a Code of Conduct. being ensnared by the U.S. Foreign Corrupt Practices Act If it isn’t done yet, formulate written anti-corruption guidelines. (FCPA) or similar legislation: You should be. That was the take- “A good Code of Conduct provides principles to address con- away from remarks by a panel of experts discussing FCPA risks flicts of interest, fraud, workplace environment, compliance with at the 2009 Canadian Legal Conference in Dublin, Ireland this laws, anti-trust and competition, gifts and hospitality, anti-retali- past August. The panelists all expect that the U.S. Department ation, financial reporting, and many other schemes and circum- of Justice (DoJ) and the Securities and Exchange Commission stances that organizations may confront,” says Christa Wessel (SEC) will continue to aggressively charge and prosecute com- of Gowling Lafleur Henderson LLP. panies with FCPA violations. Here are some tips to help stay out of trouble. 3 Test your employees. Make sure all employees, at home and overseas, have read 1 Go to school. and understand the Code of Conduct. Ideally they should sign Become familiar with the provisions of the Canadian off on it. Even better, test them in writing on it. “Many busi- Corruption of Foreign Public Officials Act (CFPOA), especially nesses also require suppliers, consultants, business part- now that it appears the federal government is getting serious ners, agents and other associates to adhere to their Code of about enforcing it. Also, most prosecutions are launched by Conduct as a condition of doing business,” says Wessel. U.S. authorities, so read up on the FCPA’s provisions. A start is the “Lay-Person’s Guide to FCPA” (http://www.usdoj.gov/ 4 Keep good records. criminal/fraud/docs/dojdocb.html). It goes without saying that maintaining accurate books and records is essential to defend against an investigation launched against your organization. You will have to show that your company is in compliance with the FCPA’s records provisions by explaining how money was spent. Furthermore, tight accounting controls will help identify inappropriate pay- ments made by rogue employees or agents. “When I think of risk management, I really think of risk awareness,” says Amita Kent, vice-president of legal affairs at Schering-Plough Canada. “It’s about gathering intelligence and knowing what your people are doing.” Having a functional whistleblower line in place can also help in the case of an investigation. 5 Fess up …early. It’s impossible to control everyone’s bad behaviour. Even companies that work hard to steer clear of foreign bribery charges may be found criminally liable for the actions of a rogue employee or agent. But when it comes time to assess penalties, the DoJ and the courts are likely to show some clemency for companies that can demonstrate they’ve made a real effort to prevent violations. If a company discovers a problem, says Grant Borbridge of Emergo Group of Companies, “the best that a company can do is to report itself PAUL EEKHOFF to the applicable jurisdiction and take its lumps.” 36 CCCA Canadian Corporate Counsel Association FALL 2009