FCPA Compliance: The Role of Certifications

In terms of FCPA compliance, the FCPA opinion procedure releases issued by the Justice Department refer to obtaining certifications from various individuals and entities as part of due diligence.  Certifications are also often referred to as being necessary as part of a compliance program.  At first glance, such steps seem all too easy.   One cannot help but wonder whether a simple set of certifications signed by someone overseas will protect an entity from a violation of the FCPA’s anti-bribery provisions.

Anyone who believes that a set of certifications will, in and of themselves, absolve an entity from liability misunderstands their purpose. By themselves, certifications cannot and will not relieve an entity from liability. However, in the context of an effective compliance program, they can play a useful role. Certifications can be helpful in several ways:

1.  A record of due diligence.  Certifications can provide a record of who was asked; when they were asked; and what they were asked.  Certifications provide a record, particularly to enforcement officials, that employees, agents, and others acting on behalf of an entity were asked direct questions as to whether improper inducements were made.

2.  Reminder.  Certifications, especially when sought on a regular basis, help enhance an employee’s or agent’s sensitivity to the importance of an entity’s prohibitions on improper inducements.

3.  Education.  By varying the questions asked with a special emphasis on providing practical and local examples of what might constitute improper inducements, employees and agents are educated as to what should prompt their attention and increase the likelihood of disclosures to compliance officials. Asked in different ways, citing different examples, or focusing on differing but related issues may prompt an employee or agent to think in broader terms as to what may constitute a basis for disclosure.

4.  Disclosure of possible violations.  Many employees and agents may automatically sign certifications without giving much thought to the process. Yet, especially over time, some are apt to have misgivings. A failure to sign a certification should prompt follow-up on the part of compliance officials.

5.  Clear basis for disciplinary action.  A provision calling for the affirmative disclosure of questionable conduct coming to the attention of an employee or agent may prompt disclosure.  At the very least, certifications may provide support for disciplinary action and possible termination should it be later learned that that the employee or agent provided a false certification.

In sum, whether in the context of FCPA compliance or compliance with the UK Bribery Act or similar regulatory regimes, certifications can play an important role.  But placing too great reliance on certifications confuses their limited role. They represent an important yet complimentary tool in the implementation and enforcement of an effective compliance program.

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