FCPA violations (Foreign Corrupt Practices Act) can cost companies millions of dollars in fines.
However, to avoid FCPA violations, translation of your FCPA policies, such as your Anti-Bribery and Anti-Corruption Policy, as well as your Business Ethics policy, will result in much lower fines and if you do have an issue, it can decrease the chances of it reoccurring in your organization.
Cost is always the main concern for compliance departments in organizations when it comes to translation of these documents. Frequently, these departments have very limited budgets so their concerns can certainly be understood. We recommend “Building the business case for the decision to translate” as one of our main objectives in our Global Readiness Scorecard.
As of March 31, 2016, there were 84 companies on the corporate FCPA investigations list of ongoing and unresolved investigations into FCPA violations who had made a public disclosure based on SEC filings. Of these 84 companies, 24 of them at some point mentioned China as part of an on-going FCPA investigation. This fact may be a good piece of information for you to compile in your report toward the business case of translation into Chinese. There are other factors that you can use as well such as looking at the list of countries where FCPA violations are most likely to occur, using cultural dimensions to assess your risks and identify priority countries and languages and review of your training materials and monitoring programs to identify areas for localization.
In the SEC settlement with Bruker Corporation, the SEC wrote:
Bruker did not translate its training presentations on FCPA, ethics, or compliance issues into local languages, including Mandarin. And although Bruker implemented an FCPA policy in 2006, it failed to translate that policy into Mandarin and relied mainly on its China-based managers to ensure that employees understood the potential FCPA implications of doing business with SOEs. Also, while Bruker periodically distributed its Code of Conduct (containing its gifts and entertainment policies) and employee handbook to employees worldwide, it again failed to translate these documents into local languages, including Chinese. – See more …
In the SEC actions against Akamai Technologies and Nortek Inc. in June of 2016, the SEC noted:
The SEC noted a lack of formalized due diligence for China-based channel partners, not proactively exercising audit rights over channel partners, the need for more employee compliance training, not translating anti-corruption policies into Chinese, not reviewing and monitoring end customer network usage in China, and insufficient procedures for reviewing and approving business entertainment expenses. You can read the full report here.
The goal of any compliance policy or training is two-fold: to gain adoption as well as be defensible. In order to ensure adoption, a policy or training program must be understood by the audience. While English is widely accepted as the primary international language, for many employees English only compliance materials are not enough.
While your organization may have the internal talent to perform reactive work in the case of suspected issues, the real long term play is on the development of appropriate training materials, performing training and implementing monitoring programs. So how does your organization handle FCPA compliance? Do you have external resources to advise on FCPA violations? We provide cultural review and translation of your materials for FCPA compliance. We also work with our partner companies, Global Colleague and Integtree, to provide you resources for legal work or cultural review and psychometric measurement of your ethics and compliance related issues. Contact us to find out more…