Indigenization and the FCPA

Addressing the challenges of the US Foreign Corrupt Practices Act
Oil & Gas Financial Journal
02.21.12
In this article, Matt Reinhard discusses the FCPA risks posed by indigenization efforts in developing countries. In recent years, a growing number of developing economies— especially in West Africa — have turned to policies or laws requiring "indigenization" efforts by foreign corporations wishing to operate, or continue to operate, in such countries. Beyond simply using a passive local agent for organization purposes, indigenization efforts focus on a two-tier goal of increasing the employment of local nationals and fostering the development of indigenous industry through training and the transfer of technology. Indigenization presents an additional, and more complicated, layer of FCPA risk that companies must confront if they wish to continue operating in such countries. This article discusses how companies facing indigenization efforts can most effectively mitigate FCPA risk.
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