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FCPA Travel & Expense

Why Compliance is a Good and Necessary Investment

on July 20, 2022

Fair is fair when it comes to fighting for billion-dollar contracts, right? So, what’s the harm in flying a group of foreign officials to lavish destinations for a weekend of fun and indulgence?

A certain multinational telecommunications company would tell you that it’s not worth the (more than) $1 billion in penalties they had to pay to the SEC and the US Department of Justice, not to mention the requirement to install an independent compliance monitor for at least three years.

Acts of bribery and corruption, violate the Foreign Corrupt Practices Act (FCPA), which can pose serious consequences for both individuals and organizations. Regulatory compliance protects your company, employees, and customers to ensure integrity, safety, and ethical behavior. The cost of not having an effective compliance monitoring program can be high.

Let’s look at few of the consequences of FCPA violations:

Fines and Penalties

Both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are responsible for enforcement of the FCPA. Those who violate FCPA regulations can face both criminal and civil penalties. The consequences can be substantial for individual contributors and the associated entities.

For individuals convicted of FCPA violations, penalties can include:
  • Up to five years in imprisonment
  • Up to $100,000 in criminal penalties
  • Up to $10,000 in civil penalties

For entities convicted of FCPA violation, penalties can include:

  • Up to $2,000,000 in criminal penalties
  • Up to $10,000 in civil penalties

Entities considered “domestic concerns” can be fined up to $2,000,000.

Also, if the penalties are considered “willful violations,” i.e., the violation includes false or misleading statements in FCPA-related reporting requirements, there are additional possible penalties.

  • Individuals can be fined up to $5,000,000 and receive a prison sentence of up to 20 years, while entities can be fined up to $25,000,000.
  • A company may also be required to forfeit any profits that it received because of the bribery plus interest, and the company may be barred from contracts or other dealings with the U.S. government.1

So far in 2022, there have been four FCPA enforcement actions totaling $865 million in penalties and forfeitures. That pushes all-time FCPA resolutions over $24 billion.

The DOJ expects organizations to diligently monitor expenses

The DOJ expects every institution to monitor expenses for bribery and corruption. As fraud continues to evolve and become harder to detect, organizations can no longer depend on manual monitoring efforts to protect them from potential FCPA violations. Using preventive controls such as preapprovals for expenses over a certain threshold, or detective controls such as requiring the review and approval of expense reports, remains an essential component of compliance programs.

Compliance isn’t just a cost – it is a commitment

Compliance must be an integrated part of your business investment strategy. Today, this requires the use of robust AI powered technology. Implementing a solution that provides automation, continuous monitoring, and advanced analytics to identify and stop potential issues quickly is not only essential, it’s priceless.

Don’t wait until it’s too late, contact Oversight today for more information.


(1) https://www.secwhistleblowerlawyers.net/the-foreign-corrupt-practices-act-fcpa-penalties-for-fcpa-violations/ (2)https://fcpablog.com/2022/06/23/all-time-fcpa-settlements-top-24-billion/?utm_content=buffer32629&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Becky Clay

Senior Product Marketing Manager

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