Most companies are not making corruption prevention a priority, according to a recent Deloitte online poll. The poll, which asked 620 executives their thoughts on the topic, found that less than 32 percent say their companies are increasing internal controls to prevent violations of the Foreign Corrupt Practices Act (FCPA). The FCPA makes it a federal criminal offense for any company or individual doing business in the U.S. to offer, pay or authorize a bribe to a foreign government official to gain some form of business advantage.

"FCPA prosecutions have increased dramatically in recent years, and all indications are that this trend will continue," said Ed Rial, leader of Deloitte's Foreign Corrupt Practices Act Consulting practice. Companies are particularly vulnerable when acquiring or partnering with foreign firms, according to Deloitte.

According to the poll, the areas where respondents believed FCPA violations were most likely to arise were in agent/consulting relationships (30.3 percent), foreign subsidiaries of U.S. companies (28.4 percent) and joint venture or strategic alliance partnerships (21.8 percent).

Deloitte has some suggestions for companies looking to prevent and detect FCPA violations:

  • Find out where payments are going. Payments are typically routed through third parties or "front" organizations created by the funds' ultimate recipients.
  • Be wary of acquisition or partnership targets that do not have effective anti-corruption compliance programs. Even if the target is not subject to the FCPA, anti-corruption programs are staples of good corporate governance and a strong ethical culture.
  • Don't rely on off-the-shelf FCPA products alone. Multi-national companies may benefit from a tailored system to identify areas of risk and monitor them through consistent testing of controls and procedures.
  • Don't assume that some industries are safer than others. While the defense and energy industries have a higher perceived risk of corruption, cases have been brought against companies in all sectors.
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