We've noted that the Justice Department and SEC have really stepped up their enforcement activity when it comes to the Foreign Corrupt Practices Act (FCPA), charging the likes of IBM, Tyson Foods, General Electric, Daimler and others. The cases span the globe, with billions in contracts implicated. 

The Washington Post puts some numbers to this oft-voiced assertion. The Justice Department took 48 enforcement actions under the FCPA in 2010, up from two in 2004. And as of 2010, the Justice Department was conducting more than 150 criminal investigations under the FCPA. Recall that last year, the Justice Department took an aggressive approach via an FBI sting operation that netted 22 arrests. For its part, the SEC undertook 26 enforcement actions in 2010, up from three in 2004. The FBI apparently now has dedicated more staff to anti-corruption efforts.

As a company executive, you cannot afford to ignore the trend, which can infect your business in various ways. Almost two-thirds of respondents in a Deloitte survey--which included corporate executives, investment bankers, private equity executives and hedge fund managers--say the FCPA and similar measures "have led to aborted or renegotiated deals such as M&A, joint ventures and distributor relationships." Similarly, 62 percent pointed to issues related to potential violations of economic and trade sanctions, such as known or suspected dealings with Office of Foreign Assets Control (OFAC) sanctioned entities, as the cause for their companies to renegotiate or pull out of a deal over the past three years. 

For a lot of U.S. executives, it seems like the law is stacked against U.S. firms. The old saw has long been that bribery is an accepted way of doing business in many parts of the world, which means the U.S. is often at a competitive disadvantage. While no excuse for crime, the argument does resonate.

And there have been some interesting developments. The SEC and Department of Justice recently settled seven companies including Panalpina and its parent company Panalpina World Transport. They were charged in connection with alleged bribes to obtain customs clearance in at least seven counties. What's noteworthy is that Panalpina World Transport is not a U.S.-based company. The SEC premised its action on the idea that the Swiss company was acting as an agent of U.S. issuers. In addition, Alcatel-Lucent of France recently settled FCPA charges of bribery to officials in Latin America and Asia. 

Increasingly, the U.S. is not the only country bent on cracking down. The U.K. recently enacted its Bribery Act in 2010, which some think goes beyond the FCPA. And the Organization for Economic Cooperation and Development has its Convention on Combating Bribery, which, like the FCPA, establishes legally binding standards on corruption. 

The bottom line is that compliance is a must. Companies operating beyond U.S. borders cannot afford to be anything but diligent in ensuring the letter of the law is followed. Controls are essential. - Jim