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Foreign Corrupt Practices Act Compliance Guidebook

Protecting Your Organization from Bribery and Corruption

Martin T. Biegelman Daniel R. Biegelman

$132.95

Hardback

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English
John Wiley & Sons Inc
07 April 2010
Foreign Corrupt Practices Act Compliance Guidebook shows readers how the Foreign Corrupt Practices Act (FCPA) has grown to critical importance to any U.S. company that does business in a global environment, as well as foreign companies that supply or have agency agreements with U.S. companies. It provides an overview of the business risks and guidance on spotting potential red flags regarding FCPA violation. Business professionals are provided with practical guidance on managing FCPA requirements as part of an overall compliance program.
By:   ,
Imprint:   John Wiley & Sons Inc
Country of Publication:   United States
Dimensions:   Height: 236mm,  Width: 163mm,  Spine: 32mm
Weight:   587g
ISBN:   9780470527931
ISBN 10:   0470527935
Series:   Wiley Corporate F&A
Pages:   384
Publication Date:  
Audience:   Professional and scholarly ,  Undergraduate
Format:   Hardback
Publisher's Status:   Active
Foreword xix Preface xxi Acknowledgments xxv 1 BRIBERY, CORRUPTION, AND THE FOREIGN CORRUPT PRACTICES ACT 1 Global Crackdown 3 Devastating Cost of Corruption 4 Government’s Commitment to FCPA Enforcement 6 FBI’s Laser Focus on Anti-Corruption 7 Watergate and the Birth of the FCPA 8 Securities and Exchange Commission Enters the Fight 9 Senate Investigations 10 Kissinger’s Resistance 11 Lockheed’s Defiance 12 Questionable Corporate Payments Task Force 13 FCPA Enactment 14 Compliance Insight 1.1: First FCPA Prosecution 15 Criticism of the FCPA 17 A Culture of Compliance 18 2 OVERVIEW OF THE FOREIGN CORRUPT PRACTICES ACT 23 FCPA Provisions 23 Leveling the Playing Field 25 Antibribery Provisions 25 Jurisdiction 29 Facilitating Payments 29 Affirmative Defenses 30 FCPA Elements Summary 30 Compliance Insight 2.1: Metcalf and Eddy Civil FCPA Settlement 31 Books, Records, and Internal Controls Provision 34 Books and Records Elements Summary 35 Sarbanes-Oxley and the FCPA 35 Opinion Procedure 36 Penalties 37 Third-Party and Successor Liability 39 Compliance Insight 2.2: Self-Disclosure Follows M&A Activity 40 Why Corruption Matters 41 Compliance Insight 2.3: Afghanistan: A Case Study in Corruption 42 Increased Enforcement 45 3 GOVERNMENT GUIDANCE AND SIGNIFICANT CASES 49 Filip Memorandum 50 FCPA Compliance Programs: Case Law Guidance 52 A Lesson in Overseas Compliance 53 Compliance Insight 3.1: Rogue Employee Does the Crime, Company Does the Time 54 Cold Cash: U.S. v. Jefferson 56 Voluntary Disclosure 58 Evaluating the Seaboard Criteria in Mitigating Enforcement Actions 58 Compliance Insight 3.2: Appointment of Corporate Monitor Results in Charges of Cronyism 62 Selecting a Monitor: The Morford Memo Standards 63 Thought Leader in Corporate Compliance: George Stamboulidis 65 Government Procurement Fraud and the FCPA 68 Federal Acquisition Regulations Disclosure Requirements and the FCPA 68 Business Ethics Awareness and Compliance Program 70 4 GLOBAL ANTI-CORRUPTION EFFORTS 75 Globalization of Law Enforcement Cooperation 76 International Antibribery Efforts 77 OECD Convention on Combating Bribery 77 Inter-American Convention Against Corruption 79 European Union Convention on the Fight Against Corruption 81 African Union Convention on Preventing and Combating Corruption 81 Council of Europe Criminal Law Convention on Corruption 82 United Nations Convention Against Corruption 84 United Nations Global Compact 86 Canada’s Corruption of Foreign Public Officials Act 86 Compliance Insight 4.1: INTERPOL Fights Corruption 87 International Anti-Corruption Organizations 89 Transparency International 89 Corruption Perceptions Index 89 Compliance Insight 4.2: 2009 Corruption Perceptions Index: Top 20 Countries 90 Compliance Insight 4.3: 2009 Corruption Perceptions Index: Bottom 20 Countries 91 Other Transparency International Resources 91 Compliance Insight 4.4: Foreign Bribery Enforcement in OECD Convention Countries 92 Compliance Insight 4.5: Foreign Bribery Cases and Investigations 93 Compliance Insight 4.6: Status of Foreign Bribery Cases 94 World Bank 95 International Monetary Fund 97 Asian Development Bank 97 World Trade Organization 98 Partnering Against Corruption Initiative 99 Thought Leader in Corporate Compliance: Alan Boeckmann 100 Global Anti-Corruption Enforcement Trends 102 The Good Fight Against Corruption 103 5 SIEMENS: A NEW COMMITMENT TO A CULTURE OF COMPLIANCE 107 Company Overview and History 108 The Road to Corruption 108 Munich Public Prosecutor’s Office Investigation 110 Self-Disclosure and Subsequent Internal Investigation 111 Legal and Fair Internal Investigation 112 Project Office Compliance Investigation 113 Amnesty and Leniency Programs 113 Cooperation with Law Enforcement 114 Compliance Comeback 114 Criminal Charges, Plea Agreements, and Fines 115 Compliance Insight 5.1: Key Elements of Siemens’ Compliance Program: Prevent–Detect–Respond 116 New Corporate Compliance Program 119 Corporate Compliance Monitor 121 Siemens’ Remedial Efforts 122 Replacement of Top Management 122 Comparison of Old and New Compliance Programs 123 Clear Reporting Lines 124 Training and Communication 125 Anti-Corruption Training Program 125 Anti-Corruption Handbook 126 Ombudsman Program 126 Strengthened Internal Audit Function 126 Enhancing Internal Controls 127 Enhanced Policies and Procedures 128 Compliance Insight 5.2: Enhancement of Policies and Procedures 128 Compliance Helpdesk 129 Anti-Corruption Toolkit 129 Compliance Insight 5.3: Siemens’ Anti-Corruption Toolkit Focus Areas 130 Business Partner Review and Approval 131 Supplier Code of Conduct 132 Compliance Insight 5.4: Business Partner Review and Approval Process 133 Corporate Disciplinary Committee 134 Compliance Element of Senior Management Compensation 134 Compliance Progress Report 134 Compliance Insight 5.5: Siemens’ Compliance Progress Report from Q2 FY 2009 135 Becoming a Recognized Leader in Compliance 136 Compliance Insight 5.6: Siemens’ Compliance Objectives for 2009 136 Partnering with the World’s Anti-Corruption Community 136 Partnering Against Corruption Initiative 137 Business Guide on Fighting Corruption 137 The Road Forward 138 6 WORLDWIDE HOTSPOTS FOR CORRUPTION: UK, RUSSIA, AFRICA, THE MIDDLE EAST, AND LATIN AMERICA 143 Overview 144 Thought Leader in FCPA Compliance: Scott Moritz 145 The Natural Resource-Corruption Link 147 UK Tackles International Corruption 148 Compliance Insight 6.1: Weak Internal Controls Leads to Fine for Insurance Giant 149 UK Bribery Bill 151 Mabey & Johnson Prosecution 152 Strong Message from the SFO 153 Russia 154 Doing Business in Russia 156 Africa 157 Nigeria 158 Middle East 160 The Oil-for-Food Scandal 161 Compliance Insight 6.2: Companies Implicated in Oil-for-Food Scandal 162 Iraq Today 163 Latin America 163 Cases of Corruption 164 Multinational Company As Victim 165 7 WORLDWIDE HOTSPOTS FOR CORRUPTION AND BRIBERY: CHINA, CENTRAL ASIA, INDIA, AND ASIA PACIFIC 171 China 172 The Dangers of Agents: Avery Dennison 172 Heightened Anti-Corruption Enforcement Efforts in China 174 Corruption and Societal Discontent 176 Criminal Law of the People’s Republic of China 176 Company Law of the People’s Republic of China 177 Anti-Unfair Competition Law of the People’s Republic of China 177 Invitation and Submission of Bids Law of the People’s Republic of China 178 Interim Provisions on the Prohibition Against Commercial Bribery Acts 179 China Enforcement Agencies 179 Commission for Discipline Inspection of the Communist Party 179 Supreme People’s Procuratorate of the People’s Republic of China 179 Ministry of Public Security of the People’s Republic of China 180 State Administration for Industry and Commerce of the People’s Republic of China 180 The Dangers of Doing Business in China 180 Central Asia 182 ‘‘Mr. Kazakhstan’’ 182 Head in the Azeri Sand 184 Baker Hughes 185 India 186 Asia Pacific 187 Indonesia 188 Vietnam 188 South Korea 189 Taiwan 190 8 BAE SYSTEMS: PAST BEHAVIOR HAUNTS THE COMPANY 197 Al Yamamah Deal 198 Compliance Insight 8.1: Suspicious Activity Report, January 30, 2004 199 FBI Scrutiny 200 BAE’s Denial 200 Serious Fraud Office Inquiry 201 Tony Blair Quashes the Investigation 201 DOJ’s Hard-Line Approach 204 BAE Response 204 Compliance Insight 8.2: Types and Numbers of Calls to BAE’s Ethics Helpline 205 Woolf Committee 206 BAE Follows a Different Path 207 9 DESIGNING AN EFFECTIVE ANTI-CORRUPTION COMPLIANCE PROGRAM 211 Federal Sentencing Guidelines for Organizations 213 The Seven Steps to an Effective Compliance Program 214 DOJ Guidance on Anti-Corruption Compliance Programs 217 Compliance Program Design 219 Red Flags and Risk Areas 221 Department of Justice’s FCPA Red Flags 221 Red Flags When Doing Business With Third Parties 222 Travel and Entertainment 223 Gifts 225 Mergers and Acquisitions 225 Compliance Insight 9.1: Inherent Compliance Risk in Acquisitions and New Business Lines 226 Autonomous International Business Units 227 Don’t Ignore Small Payments 228 Facilitation Payments 228 Corrupt Payments 229 Anti-Corruption Design Never Ends 229 Thought Leaders in FCPA Compliance: Joseph Spinelli, Scott Moritz, and Jay Perlman 230 10 IMPLEMENTING AN EFFECTIVE ANTI-CORRUPTION COMPLIANCE PROGRAM 237 Anti-Corruption Standards and Procedures 238 Training and Communication 241 Red Flags Training 243 Anti-Corruption Training Best Practices 244 Compliance Insight 10.1: Driving Home the Impact of Corruption 245 Delivery Methods for Training 246 Specific Anti-Corruption Reporting Mechanism 246 Communicating the Compliance Program 247 Evaluating Your Anti-Corruption Training Program 248 M&A Due Diligence 250 Risk Assessments 251 Thought Leader in FCPA Compliance: Leslie McCarthy 252 Internal Accounting Controls 256 Role of Internal Audit 256 Anti-Corruption Audit Program 257 Other Compliance Program Best Practices 260 Field-Based Compliance Officers 260 FCPA Enforcement Database 261 Benchmarking 261 Commitment to Anti-Corruption Compliance Programs 261 Compliance Insight 10.2: Sample Compliance Activities Checklist 262 11 MONSANTO: FIGHTING CORRUPTION FOR A BETTERWORLD 265 A Commitment to Agriculture 266 DOJ and SEC FCPA Investigation 266 Acceptance of Responsibility and Remedial Actions 268 Compliance Insight 11.1: Monsanto Compliance Program Overview 269 Tone at the Top and a Revamped Code of Conduct 269 Messages from Senior Leaders 271 Business Conduct Office 272 Training 273 Regional Working Groups 274 FCPA Working Group Guidelines 275 Compliance Insight 11.2: Monsanto Business Conduct Policy Employee Guidelines 276 Gifts, Entertainment, and Other Promotional Expenditures 278 Per Diem Payments 280 Facilitating Payments 280 Political Donations 281 Charitable Donations and Donations to Governments 281 Trade Associations 282 Doing Business with Foreign Officials and Their Relatives 283 Dealing with Third Parties 283 Training Third Parties 285 Joint Ventures 286 Contractual Safeguards and Oversight 287 Audit 288 Opinion from Outside Counsel 289 Local Law Advice 290 Response to Possible Violations 291 Internal and Independent Investigations 291 Internal Coordination and Training 291 The Monsanto Pledge 292 12 INTERNAL INVESTIGATIONS 293 Consequences of Failing to Act 294 Preparing for the Investigation 296 Preserving Documentary and Electronic Information 297 Assembling the Investigative Team 298 Investigations Code of Conduct 299 Investigative Plan 301 Conducting Interviews 303 Thought Leader in Internal Investigations: David Z. Seide 304 Employee Legal Representation 307 Interviewing and Reporting 308 Employee Cooperation with Company Investigations 309 International Investigations 310 Anti-Corruption Enforcement Trends 310 Siemens Internal Investigation Approach 311 Determining Systemic Corruption and FCPA Violations 312 Self-Disclosure of FCPA Violations 313 Compliance Emergency Preparedness Kit 315 13 PAST, PRESENT, AND FUTURE OF THE FCPA 319 The Past 320 The Present 321 Thought Leader in FCPA Compliance: Marjorie Doyle 323 Corporate Ignorance Is Not Bliss 328 It’s Not Rocket Science 329 On the Horizon 330 The Future 330 Battling the Disease of Corruption 331 Appendix Opinion Procedure Releases 335 About the Authors 347 Index 351

MARTIN T. BIEGELMAN has been fighting fraud and corruption for more than thirty-five years in various roles in law enforcement, consulting, and the corporate sector. He is currently Director of Financial Integrity for Microsoft Corporation, where he built and leads a worldwide fraud prevention and anti-corruption program. DANIEL R. BIEGELMAN is an attorney with the law firm of Baker Hostetler. He is a member of the Litigation Practice Group in their New York office. Daniel is a Certified Compliance and Ethics Professional and a member of the Society of Corporate Compliance and Ethics. He is a contributing author to Building a World-Class Compliance Program: Best Practices and Strategies for Success (Wiley). He is also the author of articles on the FCPA and corporate compliance.

Reviews for Foreign Corrupt Practices Act Compliance Guidebook: Protecting Your Organization from Bribery and Corruption

Praise for Foreign Corrupt Practices Act Compliance Guidebook: Protecting Your Organization from Bribery and Corruption This book is a must for lawyers and any corporation that deals with global commerce. The chapter on Siemens shows how a large multinational can respond and reform under intense scrutiny. The Siemens chapter also represents reform and transparency and will be seen as a model for a very long time. ?Michael G. Oxley, Of Counsel, Baker and Hostetler LLP An excellent FCPA guidebook! The Biegelmans' book makes it easy to understand the FCPA and includes fascinating case studies and interviews with compliance thought leaders. It should be required reading and a desktop reference for anyone committed to the fight against worldwide corruption or interested in creating a best practice anti-corruption compliance program. ?Cynthia Cooper, CEO, The CooperGroup LLC, and one of Time magazine's Persons of the Year Foreign Corrupt Practices Act Compliance Guidebook is an excellent and easy-to-use resource for companies doing business abroad. The book is full of practical guidance and compiles in one place an overview of the many issues a company and its counsel may face in effecting compliance and dealing with investigations. A must-read! ?Karen A. Popp, Partner at Sidley Austin LLP, former federal prosecutor, and Associate White House Counsel to President Clinton This book provides a highly relevant and invaluable guide for companies wishing to protect their assets and reputations from the menace of corruption. In addition to presenting a comprehensive discussion of the history, requirements, and importance of the FCPA, Martin and Daniel Biegelman offer insightful, in-depth examples and clear, practical guidance on compliance. ?James D. Ratley, CFE, President, Association of Certified Fraud Examiners Everyone in the compliance community will find what they need in this great new resource. It demystifies the FCPA and what it requires. The writing is crisp and lively, the examples and case studies are vivid and succinct, and the advice is rock solid. This is the best overall presentation of the FCPA between two covers that I have ever seen. ?Richard L. Cassin, Founding Partner, Cassin Law LLC, and creator of the widely read FCPA Blog Foreign Corrupt Practices Act Compliance Guidebook is a brilliant and crucial addition to FCPA literature. Any American company doing business overseas needs a copy. This will be a standard reference for many years. ?Mark A. Kirsch, Co-Chair of Litigation, Gibson, Dunn & Crutcher LLP ?Martin and Daniel Biegelman have done it again. While the FCPA has been an issue for decades, it has taken center stage over the past few years and all signs point to it having an even greater impact on businesses going forward. The Biegelmans? have built a comprehensive tool for all levels of interest ? from the practitioner to the CEO, this is a book that should be mandatory reading for those touching international business.? ?Dan Wachtler, CEO, IPSA International, Inc. ?As the FCPA quickly becomes one of the world?s true International Laws, compliance is essential for corporate accountability and integrity. The FCPA is a critical component of a free market system that rewards hard-working, honest individuals and companies, and strongly pursues violators. The Biegelmans? FCPA Compliance Guidebook isn?t just about a regulation; it?s about building a successful and compliant global economy. ?Roy Snell, CEO, Society of Corporate Compliance and Ethics ?Martin along with his son Daniel have written the authoritative standard on the Foreign Corrupt Practices Act. It is a must read for any Compliance or Ethics personnel looking to better understand this complex issue.? ?John E. McDermott, VP, Corporate Compliance Investigator, CA Inc. ?Foreign Corrupt Practices Act violations are the current focus of regulators, investigators, and prosecutors, here and abroad. This exhaustive text explores the legal nooks and crannies with exacting precision, but it?s most important contribution is the emphasis on compliance and prevention, areas that the authors know well. Through numerous illustrations of extraordinary crimes and splendid compliance and prevention techniques, the authors establish FCPA awareness and compliance as a sine qua non for doing business globally. A must-read for businesses wishing to avoid massive fines and/or imprisonment.? ?George E. Curtis, J.D., Executive Director of the Economic Crime Institute, Utica College ?Martin and Daniel Biegelmans? work will go down in American corporate and financial lore as a comprehensive history of the series of train wrecks that have yielded the FCPA and its various progeny. It tells the fascinating story of how we got from the Lockheed disclosures of the mid-1970s to the hottest area of white collar practice today. It is required reading for those of us struggling to implement global compliance programs. Those unenlightened ones who remain committed to the dark side would also do well to read it, and take warning.? ?Keith Hennessee, Associate General Counsel, Halliburton Company ?This book is a great compilation of information about the FCPA and practical guide that would have been incredibly useful to me when I was asked to be responsible for FCPA Compliance related matters. It is a much needed resource and it will be extremely valuable as a desk reference for anyone involved in business and who is responsible for FCPA compliance.? ?Flora A. Francis, Counsel, Litigation, GE Oil & Gas ?Tackling corruption and insuring compliance with the Foreign Corrupt Practices Act makes this book a ?must read? for both current and future managers of today?s global corporations. Increased global Anti-Corruption laws and efforts demand that corporate compliance and training programs are in place - this guidebook provides the ?how? and the ?why?! This book provides the ?wake-up call? and consequences of ?failure to act? that organizations can no longer ignore!? ?Joyce Barden, CPA, CBM, Senior Professor, DeVry University/Keller Graduate School of Management


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