1. Why Comply with the FCPA?
The anti-bribery provisions of the FCPA make it unlawful for U.S. persons and companies to
bribe foreign government officials to obtain or retain business. The FCPA accounting provisions require
public companies to keep books and records that accurately reflect transactions, and to devise and
maintain an adequate system of internal accounting controls. Companies and individuals are subject to
severe civil and criminal penalties for violating the FCPA.
The U.S. Department of Justice has been scrutinizing the medical device and pharmaceutical
industry. Recent enforcement decisions in the healthcare industry involved Biomet Inc., Johnson &
Johnson, Siemens, Novo Nordisk, and AGA Medical. Medical businesses are uniquely exposed to
corruption risks due to high level of interaction with public health institutions in foreign countries and
regulations surrounding the medical business. For medical device manufacturers, areas of concern are:
activities of distributors, sponsorship of medical symposia and congresses, physicians’ travel, and clinical
studies.
In addition to compliance with the FCPA, the scope of compliance should include compliance
with anti-corruption laws of foreign jurisdictions where your company conducts business, including laws
that prohibit commercial bribery of foreign parties (“Anti-Corruption Laws”). Please note that
commercial bribery of private parties in foreign countries is not punishable under the anti-bribery
provisions of the FCPA, but can be punished under the accounting provisions when such commercial
bribes are not properly recorded. Further, these foreign anti-corruption laws apply to your foreign
employees and subsidiaries, and noncompliance can negatively affect your business outside of the U.S.
The FCPA and anti-corruption compliance helps protect corporate assets and operations,
prevent revenue loss from non-compliance, and helps avoid and reduce crippling fines. For public
companies compliance is particularly important because it reinforces the company’s brand and
corporate reputation, enhances credibility and helps outperform competitors.
How to Comply with the FCPA?
Performance of the FCPA compliance obligations can be best ensured through a robust and
effective compliance program. An FCPA and Anti-Corruption compliance program is best viewed as a
comprehensive system by which a company can manage its international business operations and
transactions in compliance with the FCPA and applicable anti-corruption laws (the “Compliance
Program”). The FCPA and Anti-Corruption Policy should become the keystone of the Compliance
Program (the “Policy”). Involvement of the senior management is critical for a successful Compliance
Program.
Establishing the Compliance Program is not a guarantee that a violation will never occur. An
effective Compliance Program, however, significantly minimizes the risk of noncompliance and is a key
to consistent compliance with the FCPA and Anti-Corruption Laws. Finally, it can help reduce penalties if
a violation occurs.
The principal components of a Compliance Program are: commitment, communication, and
confirmation (the “3 Cs”). The Federal Sentencing Guidelines1
(the “FSG”) explain these principal
components. While the FSG is not the law, government authorities use it as a roadmap when
investigating violations of US laws, including the FCPA, and to determine sentences for offenders.
Further, enforcers measure effectiveness of the Compliance Program against the standards set forth in
the FSG.
1 §8B2.1. of the 2010 Federal Sentencing Guidelines Manual, available at
http://www.ussc.gov/Guidelines/2010_guidelines/Manual_HTML/8b2_1.htm

2. The FCPA and Anti-Corruption Compliance Program 3Cs
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