Is There a Trend Away From FCPA Compliance Monitors?

The National Law Journal
06.03.11

In this article, John Davis and Jacqueline Ferrand discuss recent Foreign Corrupt Practices Act dispositions, which signal a possible move away from independent compliance monitors and toward self-policing and direct reporting to agencies. The roles, costs and qualifications of compliance monitors in FCPA and other corporate fraud resolutions have been the subject of much commentary and concern. The agencies have taken steps to address some of these concerns, yet the use of monitors remains controversial, and the criteria by which the agencies have determined ­whether a monitor should be imposed remain unclear, apparently driven largely by case-specific factors. However, recent cases, such as Johnson & Johnson, have required companies to enact enhanced compliance policies and procedures, with direct reporting to the agencies, rather than employing an independent monitor.

Johnson & Johnson and other recent dispositions present a new opportunity for companies to benchmark their FCPA compliance programs. One path is to start with the Organisation for Economic Co-operation and Development's recent "Good Practice Guidance" as a baseline standard, checking that the company's program covers all the OECD's enumerated elements. A next step is to review the "enhanced compliance obligations" in the Johnson & Johnson disposition documents, with the goal of adapting them, as appropriate, to the company's corporate structure and culture. If the company's FCPA compliance program adopts and consistently applies these practices, the company is unlikely ever to see a monitor.

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