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If You Find Your Company in Violation of the FCPA

on August 08, 2016

Given that we provide technology for ensuring Fortune 500 company’s T&E programs are FCPA compliant, we like to stay abreast of the latest news in the FCPA world. Recently, Johnson Controls settled their subsidiary’s FCPA violations with the SEC for $14 million dollars.

This news is interesting to us for two reasons:

1)   It’s a lower settlement than we’ve seen for similar FCPA violations.

2)   Johnson Controls (a global provider of HVAC systems) avoided court, further scrutiny, and heftier fines because they were part of the DOJ’s new pilot program which was announced in a memo titled,  “The FCPA Enforcement Plan and Guidance” from the Department of Justice on April 5th. This pilot program allowed Johnson Controls to self-report violations.

Basically, by being proactive and honest they avoided a lot more heat from the DOJ/SEC and got off easier. This news is important to Oversight Systems because it proves what we’ve been saying since 2013 – that when it comes to FCPA, it’s important to demonstrate that you’re actively trying to monitor and prevent violations.

In the case of Johnson Controls, it was a subsidiary they purchased in 2005 that was found guilty of paying bribes to Chinese officials.  Yes, an expense audit technology can help catch bad actors. But, what if you don’t catch FCPA violations before the SEC does? The bigger the organization, the harder it is to gain visibility into every aspect of the business.

Let’s pretend an employee bribes an official gets away with it and you know nothing about it until the whistle gets blown. Having an expense audit tool in place demonstrates your willingness to be compliant and that you were following best practices to prevent such actions from occurring.

Oversight’s FCPA technology can assist in making sure you’re fully compliant in a few key ways:

  • Our predictive analytic technology can discern patterns where potential FCPA violations may be occurring.
  • Simply having a tool in place has been proven to reduce non-compliant activity by 70%.
  • Our tamper proof email log makes it impossible for anyone to go in and change facts or data. This is helpful in the event an investigation occurs.

Having tools in place and working with the SEC and DOJ in the event of a violation is now being proven to reduce actions against your company and limit the fines you’ll pay. So, what are you waiting for? If guarding against FCPA risk is on your to-do list this year, take a free test drive of our software.

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