Does this sound familiar: A company that’s increasingly selling services and solutions to companies abroad will not allow sales guys to ink deals directly with third parties. They have to go through “consulting” firms.

If you were to look at one of these contracts, you might notice a huge “marketing” expense item. Most people will not question the expense. They really would rather not know for the sake of the deal. In this era of heightened FCPA act enforcements, this scenario gets at an important question proved by TheAtlantic: Is it possible to  be both compliant and competitive abroad?

According to Ernst & Young's "European Fraud Survey 2011," two-thirds of employees “said bribes were widespread in their countries, and one in five felt it acceptable to pay bribes to win business. In the firm's most recent global fraud survey of corporate leaders found that while more than half of respondents plan to grow within the next year--especially to Latin America and the Far East where corruption is perceived as commonplace--two in five rarely perform fraud or corruption due diligence.”

So it would appear that most executives believe that it is indeed hard to be competitive as well as compliant. But that is dangerous mindset these days, as prosecutors are bent on going after more FCPA violators. It is doubtful that ignorance of third-party practices abroad will be a good enough excuse. At some point, companies will be forced to take responsibility for their vendors in many ways. Compliance with the FCPA will be one of them and you might want to operate on that assumption.

For more:
- here’s the article

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