In 2009 alone, U.S. multinational businesses paid over one billion dollars to settle criminal and civil violations of the U.S. Foreign Corrupt Practices Act ("FCPA"). These penalties, which do not include legal fees, are only expected to increase in 2010 and beyond as the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) ramp up their enforcement activities thanks to new resources and political priorities.

The threat to U.S. corporations does not end with the FCPA. Foreign governments and international organizations are also increasingly enacting local regulations to curtail corrupt business practices to which U.S. companies must adhere. These FCPA and foreign regulations present more than financial penalty risks. They also present personal liability risks to the executives of the corporations found guilty of violations. Beyond this, a company found violating any of these regulations stands to do severe long-term damage to its reputation and brand image, potentially undermining revenues.

These multi-layer risks make it essential for U.S. companies to become "global" and create and maintain a robust FCPA compliance program. Klink & Co., Inc. can make your business compliant, regardless of where you are active or what your growth plans involve. Our professionals have worked on multiple FCPA and related matters in dozens of countries.

The FCPA casts a very wide net. It covers any benefit, be it large or small, provided by a company to a foreign official. The DOJ and the SEC aggressively pursue any company that makes even a small improper payment. Recently, more investigators and lawyers have been hired by the DOJ and the SEC to pursue these FCPA cases. Now well over 100 companies are under investigation. This compares to only a few in 2002. Investigations, settlements, convictions and penalties will only increase going forward in the face of increased enforcement resources and the rise in corporate globalization.

Business growth is likely to be centered on the emerging markets for many companies. Therefore, it is crucial to understand where a company is growing and to identify the corruption and fraud risks of those countries. Bribery, fraud, and corruption are particularly rampant in emerging markets.

The professionals at Klink & Co., Inc. have helped our multinational clients significantly reduce their corruption and frauds risks. We also have successfully identified and mitigated the risks posed to businesses operating internationally. Our expertise is well recognized, which is underscored by our appointment as an Independent Compliance Consultant by the DOJ and the SEC.

The FCPA-related services we offer our multinational clients include:

• Establishing a Compliance Program - creation and implementation
• Audits and Assessments of Compliance Programs - identifying risks or incidents of wrongdoing
• FCPA Violations Investigations
• Due diligence on partners, consultants, distributors, or other intermediaries operating internationally
• Education and Compliance Training (in-person or on-line training options are available)
• Risk Assessments of International Markets

Key Elements of the FCPA

• Prohibits U.S. companies and their subsidiaries, as well as their officers, directors, employees, and agents, from bribing "foreign officials."
• Requires public companies to maintain internal controls and accurate records that properly reflect all transactions and eliminate
"off-the-book" transactions or "slush funds" that facilitate improper payments precluded by the anti-bribery provisions.
• The anti-bribery, recordkeeping, and internal accounting controls provisions apply to a company's worldwide operations.
• The use of third-parties, regardless of their designation, will not shield a company from liability where its employees know or have reason to know that bribes are being paid on the company's behalf.
• To help avoid being held liable for corrupt third-parties, the DOJ encourages U.S. companies to perform appropriate due diligence on all agents and joint venture partners to ensure that the third-parties are reputable and qualified partners or representatives.
• Criminal Statute with Civil Dimensions:
• Violations by Individuals: $100,000 fine, 5 years imprisonment, or both
• Violations by Companies: $2 million in fines
• Civil fines of $10,000 against company, officer, or employee
• Under the Alternative Fines Act, fines may be up to twice the benefit that the defendant sought to obtain by making the corrupt payment

For more background on the FCPA, please visit the DOJ at: http://www.usdoj.gov/criminal/fraud/fcpa/