As multinational corporations grapple with increasing regulatory and enforcement pressures coupled with geopolitical upheavals, in-house legal teams are urged to intensify preparations for ongoing enforcement and uncertainty across various sectors and jurisdictions.
In the United States, a seminal shift occurred last year with the emergence of the first Foreign Corrupt Practices Act cases, following the Department of Justice’s introduction of revisions to its Corporate Enforcement Policy and its Evaluation of Corporate Compliance Programs. Companies involved in misdemeanors but showing “immediate” voluntary self-disclosure, extraordinary cooperation, an effective compliance program at the time of misconduct and full remediation can obtain declinations and reduced penalties under the updated policy.
An intriguing aspect of this shift is the Department of Justice’s Criminal Division now encourages early self-disclosure of potential wrongdoing even before a company concludes internal investigations. This stands in contrast with previous ambiguities over satisfactory timelines for such disclosures.
A newer safe harbor policy for mergers and acquisitions was announced last October by Deputy Attorney General Lisa Monaco. Companies are required to voluntarily disclose any misconduct attributed to an acquired company within six months of closure, irrespective of the time of discovery.
In December, the Foreign Extortion Prevention Act was passed, broadening the scope of U.S. law to criminalize both sides of foreign bribery activities.
Global companies must also monitor and respond effectively to international legal and enforcement developments. There is an escalating seriousness of anti-corruption efforts worldwide, demonstrated by enforcement actions in Europe, the United Kingdom, and in Asian, Middle Eastern, and Latin American nations. This creates a web of interplaying legal norms with which multinational corporations must comply.
Moving forward, all these changes underscore the increasing need for global companies to examine and adapt their compliance programs to ensure they can detect any wrongdoing and adapt to changing business activities and risk profiles. In this changing regulatory landscape, agility and vigilance will be key to effective corporate governance.