FCPA 3rd party relationships

The spotlight is on $ Billions 2 FCPA 2010: 50 individuals had been charged and nearly $2 billion collected from FCPA 1 2005: 5 individuals and roughly $16.5 million collected 0 2009 2010 • Huge press exposure, both USA FCPA & UK Bribery Act • Criminal liability for company executives • SEC ‘whistle-blower incentivesFCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

The real cost of FCPA violations Estimated Costs FCPA – China DCAA audit $0.5M payments case Fine $1.7M ITT Legal Fees $4.0M $12B total revenues; 40,000 employees Post-case monitoring $1.5M $5B in government contracts; F500 TOTAL COSTS $7.7M ITT was fined $1.7M for allegedly paying Chinese officials for the sale of water pumps. They were accused of paying $200k in bribes for business worth $4M and after- tax profits of $1M Press reports show a fine of $1.7M but the real cost to ITT could easily be in excess of $10M (not including business opportunity cost)FCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

How responsive are you? The Problem Are your investigations something like this? Any Investigation ... • Involves many organizations, languages • Collection alerts organization (leads to Slow, disruptive cover-up) & ineffective • Who is key? Who have we missed? • Time is money – the longer this drags on, the more it costsFCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

AThe Problem new paradigm Faster, smarter, more effective investigations • Insight into entire company (not just who you think might be involved) • Non-disruptive (investigate before collection and interviews) • Provide Case Intelligence within days not weeks • Prioritize most important investigations Don’t wait until it’s too late… • Get ahead • Periodically review your foreign business relationships • Compliance peace of mindFCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

360 degree Assessments 360 degree Assessments • Get insight into ‘trouble’ regions • Non-disruptive (investigate before collection and interviews) • Assess key business relationships • Gain compliance ‘peace of mind’ Multiple Deployments What relationships do we have in Country X ?FCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

How often do we need these 360 assessments? Typically 1 or 2 times a year… or as the business dictates … such as… • Unbelievable sales growth in Brazil? • New R&D trials in China? • New oil exploration contracts in Nigeria? • etcFCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

What is involved? Fast, comprehensive, effective and non-disruptive • These are not detailed audits of Financials • They are not in-country, covert investigations • They are not reviews of your partnership programs They are a … comprehensive review of how your company conducts its international business operationsFCPA 360 degree Copyright © 2011 Catelas Inc. All rights reserved

FCPA 3rd party relationships

by REL on Nov 04, 2011

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FCPA 3rd party relationships — Presentation Transcript