http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/ Blogen-us Tue, 01 May 2012 10:01:34 AMTue, 01 May 2012 10:01:34 AM http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2012-04-25Q: Can ABC legally pay for these activities, or do they in fact constitute an FCPA violation? A: Yes, if these payments are approved by the appropriate authority in the company as per approved limits of authority. The burden of proof whether it constitutes an FCPA violation is on the Federal Agencies. Semper necessitas probandi incumbit ei qui agit! Q. What actions should Jim take in response to this situation? A. To confirm all these transactions are authorized by the appropriate authorities within the company with complete information being disclosed to them. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-10-18For starters: - FCPA overrules company policy. FCPA is a Federal Act. - Value is not a savior from prosecution. If your intent is to influence a government or it’s agent for preferential treatment or receive business than the company is in violation, the size or value of the gift/payment could be $20 or 20,000 or more. - The individual does not need to be an employee of the company either; an agent of the company can put the company in jeopardy just the same. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-10-05From its plain reading it seems to me that the manager of ABC Company had violated FPCA rules as his intentions were very clear and loud, not to pay the Sales tax leived by the latin american government. Such travel payments to the govt officials do not represent entertainment or gift expenses as these payments were quite substantial and most important is to consider the nature of the payment and the circumstances surrounded by it. It comes under the ambit of Fraud and Corruption which results in a bad image/ reputation of the company. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-03-29First check the co. policy on entertainment. what items are eligible. who are eligible. how much is claimable. what's the maximum limit allowable. Second to look at who authorise the entertainment. Third, if authorised, on what basis is available to argue that the entertainment is not legitimate. 4th is the basis in fcpa warrant giving entertainment is illegitimate. 5th on what happens if there is conflict btwn host legislation & fcpa, who will prevail if the incident happens not in usa. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-02-24To me, one need to be abreast with what FCPA and ABC policies with regards to traveling and gift before any comment can be made. However, on the surface, it seems ABC has violated the procedures or policy by sponsoring what contracdits the policy or on the other hand trying to avoid mayment of mandatory tax of the state. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-02-08I just went to a seminar on this, and other companies have been fined and sued by the US gov't for FCPA violations after taking foreign government officials on trips to places such as Disney World. So yes, these can be considered bribes under FCPA and this type of activity should be avoided, even if the intent is innocent. http://www.theiia.org/intAuditor/ask-the-experts/2011/environment-for-corruption/2011-02-03On the surface it appears that ABC could pay for these activities. If the imposition of the tax was repealed, it would be a red flag that possibly illegal payments were made to Latin American government officials. I would determine how the company historically addressed bribes and illegal payments and review the company’s formal policy on gifts, bribes and illegal payments. I would also discuss this issue with ABC’s legal council to obtain a legal opinion on the travel gift, discuss international law ramifications, and determine the best approach to take and evidence to obtain, especially if top management approved the questionable payments.