James Tillen Comments on Importance of Effective Recordkeeping to Avoid FCPA Violations in Corporate Counsel

"Inhospitable Hospitality: BHP Billiton's $25M FCPA Fine"
Corporate Counsel

James Tillen commented on the importance of effective recordkeeping when hosting foreign government officials in order to avoid Foreign Corrupt Practices Act (FCPA) violations in light of BHP Billiton's alleged missteps. To avoid falling into the same traps that BHP did, Tillen said that keeping proper records is invaluable. "There are so many opportunities for a books and records issue if those forms aren't used properly," he said. If BHP had properly used its own forms and generated the proper paper trail to prove due diligence occurred, Tillen said the company might not be facing as much trouble today.

In order to mitigate FCPA risk, companies could go to the supervisor of the government official they wish to entertain and ask the supervisor and their legal counsel to sign off on any hospitality activities. "It allows the government entity to object or bless it as they see fit, and that will give you greater comfort that what you're doing is appropriate," Tillen said, adding that companies also can ask foreign governments to pick officials whom they believe it would be appropriate for the company to meet with as way of reducing risk that the interaction will be seen as noncompliant. However, while these potential fixes can give a company more peace of mind, they also take a certain amount of time and money to implement and thus companies that don't want to expend the resources or want to steer clear of FCPA risk entirely may wish to consider excluding government officials from invite lists, he said.

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