The Far-Reaching Foreign Corrupt Practices Act

In the high-stakes practice of international regulatory compliance, perhaps no law looms as large as the U.S. Foreign Corrupt Practices Act (FCPA). This act is designed to ensure that companies — in their overseas dealings — don’t establish contracts or advantages through bribery of any foreign official while also keeping accurate and transparent records.  

The law applies to all U.S. individuals and companies, as well as foreign nationals conducting business in the U.S., and prevents payments, offers, and promises of anything of value in exchange for corporate favors. While it’s possible to mount an affirmative defense when accused of a violation, it requires clear documentation of mitigating factors such as proof that the alleged conduct was legal or reasonable in the country in question.

As an international organization, your firm (or client) will need to comply with both sides of the FCPA — anti-corruption and accounting provisions alike. Your case may hinge on the strength of your internal controls, which prominently include the ability to accurately translate and retain essential foreign-language documents. There are now sophisticated multi-language search, analytics, and translation tools that can help reduce your FCPA compliance risks hidden in foreign-language files that go undetected.

Why Record Keeping is so Important

The two major components of the FCPA — international bribery prevention and accountability through accurate record keeping — are designed to work together. When your organization is scrupulous about recording its activities, it will become clear whether all your dealings are being carried out in a legal, responsible manner.

If your organization is found to have violated any part of the act, the response from the Department of Justice (DoJ) could mean paying a serious price. Monetary penalties and disgorgement of ill-gotten gains are among the standard enforcement actions, and these judgments can reach millions of dollars. Individuals who willfully commit violations of the act can serve prison time.

While the exact nature of a good FCPA compliance program will differ depending on your company’s size, industry, and the international markets you’re targeting for expansion, there are a few constants. For example, clarity of documentation always matters, and this brings its own challenges. How can you ensure your organization has accurate, clear records and policy documents when its operations span multiple countries? Translation can play a key role.

Where Does Translation Fit into FCPA Compliance?

When your organization doesn’t translate important internal content, it can incur major FCPA compliance risk. Documents such as anti-corruption policies, FCPA training materials and other instructional content should be made available in the local languages of new countries where you operate, demonstrating that you’re putting in the effort to inform and prepare your staff.

The FCPA Blog highlighted two FCPA enforcement actions taken by the Securities and Exchange Commission (SEC) within the past decade that demonstrated how seriously the government takes translation efforts. In these cases, a lack of translation was cited as a reason for action, but the organizations then lessened their penalties by investing in translation.

Initially, the companies had not translated their anti-corruption policies into Chinese when they began operations in China. The companies self-reported bribery in violation of those policies and then translated important documents from Chinese to English to aid the SEC. The companies earned cooperation credits through this process.

The DoJ FCPA Resource Guide gives a hypothetical example along these same lines — a company that moves into a new country but does not translate its corporate compliance policies or training programs is at risk of being charged following an FCPA investigation if there is an incident of bribery. Translated policies shouldn’t just apply to internal employees, but also to third-party personnel a company works with overseas.

Beyond ensuring all audiences within the company have policy documents and training materials in their native languages, translation services can also play an important role in day-to-day FCPA compliance. For example, if a whistleblower complaint comes through in a local language, translating it quickly and accurately is crucial as this will help your business take quick and decisive action to address the highlighted FCPA violation.

What Should You Look For in a FCPA Compliance Translation Service?

Translating materials effectively means prioritizing rather than being indiscriminate. This is especially true when dealing with a targeted and specific matter, such as meeting FCPA compliance requirements.

It is essential to be able to identify the most important and relevant documents for any purpose. This may require the use of sophisticated tools such as Ai Translate Analytics which can employ cross-lingual semantic search to find highly relevant content among thousands or millions of files, as well as the ability to conduct ongoing monitoring to identify new instances of those concepts over time. More information on compliance monitoring software to assist FCPA can be found here.

Not all foreign-language content should be treated the same. Once you’ve identified the most relevant content for your compliance efforts or legal matter via semantic search or other means, you want to focus on that content first. And it deserves the highest level of translation accuracy which will come from human translation (which is better than machine translation plus post-editing, and certainly better than MT alone). Your translation process should possess a way to automatically sort and organize content, and to specifically target the most critical documents (and only those files) for higher-priced, higher-accuracy methods. In this way, you optimize for speed, and cost as well.

Your translation process should also be secure. Ensure that your provider has achieved and maintains ISO certifications for translation quality and information security. Working with a proven competent partner for your compliance translation needs helps you build out your FCPA compliance strategy alongside other key services.

Start Translating Essential Documents for FCPA Compliance

It’s always a good time to inspect and audit your organization’s current practices to determine whether every area of the business is in line with FCPA requirements. Wherever there’s a missing component, such as an FCPA training program that isn’t available in a local language or a document that hasn’t been retained in the right location, it’s worth taking action.

Once an organization is accused of an FCPA violation, the strength of its controls and documentation can determine how the situation resolves. Simply stating that a payment to a foreign government official or agency was carried out in a legally compliant manner isn’t enough. You need to have the records to back up every action you take. If your organization isn’t creating such a paper trail, with documents available and searchable in all relevant languages, it’s time to start.

As you expand to more new markets around the world, the need for effective FCPA compliance translation will only grow. Every new language introduces additional requirements, and a mistake in any new territory can bring FCPA enforcement action from the DoJ and SEC. Not only is translation an effective form of prevention, but having the ability to translate documents can help improve your situation, even if you need to respond to an FCPA violation somewhere in your network via internal investigation.

For further information on how to optimize translation analytics and workflows, please contact the Ai Translate team.



Foreign Corrupt Practices Act: Key Provisions

What are the key provisions of the United States Foreign Corrupt Practices Act (FCPA)? This is a federal law intended to combat bribery of foreign officials and bring transparency and accountability to international business practices. Its requirements include:

1. Anti-Bribery Provisions:

Foreign Officials: FCPA Prohibits the offering, paying, promising, or authorizing of anything of value to foreign officials, political parties, or candidates to obtain or retain business.
Jurisdiction: FCPA applies to all U.S. persons and businesses, foreign persons and businesses while in the United States, and public and private U.S. companies including their officers, directors, employees, and agents.
Affirmative Defenses: The FCPA allows certain defenses to an alleged violation, including demonstrating that a payment was lawful under the laws of the foreign country, and reasonable expenses directly related to the promotion, demonstration, or execution of a foreign government contract.

2. Accounting Provisions:

Books and Records: The FCPA requires companies registered with the U.S. Securities and Exchange Commission (SEC) to make and keep reasonably detailed records and accounts that accurately and fairly reflect their transactions.
Internal Controls: Companies must devise and maintain a system of internal accounting controls sufficient to ensure management’s control, authority, and responsibility over the firm’s assets.

Avoiding Penalties

Both individuals and entities can face significant fines and penalties for compliance violations — particularly those related to FCPA. In addition to monetary penalties, individuals can face imprisonment, and companies can face other sanctions.

The FCPA is also subject to the interpretation of the U.S. Department of Justice (DOJ) and the SEC which influences their inclination to go after non-compliant organizations. Global companies must include these agencies’ interpretive guidance as part of their compliance strategy.


EDITOR’S NOTE: Ai Translate by LSI™ is a translation solution from Linguistic Systems. The solution uses a combination of advanced proprietary machine translation technology, Linguistic Systems' network of 7,500 skilled certified translators who deliver high-quality translations in up to 120+ languages, and ISO-certified processes and security. Additional powerful capabilities are available via Ai Translate Analytics including multi-lingual semantic search, auto-generated English summaries, real-time data monitoring, and much more. Linguistic Systems offers 50+ years and billions of words of experience serving 25,000 clients, including many Fortune 100 and AmLaw100 firms.