FCPA Compliance and Ethics Blog

January 20, 2015

Language Solutions as Preventative Tool in Anti-Corruption Compliance

Filed under: Uncategorized — tfoxlaw @ 12:01 am

LanguageEd. Note-I partnered with Merrill-Brink to write a White Paper on the use of local languages as a preventative tool in FCPA, UK Bribery Act and anti-corruption compliance. Today’s blog post is an excerpt from the full article entitled, “From ‘Detect’ to ‘Prevent’: Translation Solutions as a Preventative Tool in Your Anti-Corruption Program, which can be found by clicking here. 

I often write and talk about what I call ‘McNulty’s Maxims’ on the three questions he would ask to determine the effectiveness of an anti-corruption program. The queries are as follows: (1) What did you do to prevent it?; (2) What did you do to detect it?; and (3) What did you do when you found out about it? These three questions became part of the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) Foreign Corrupt Practices Act (FCPA) Guidance when they stated, “A well-constructed, thoughtfully implemented, and consistently enforced compliance and ethics program helps prevent, detect, remediate, and report misconduct, including FCPA violations.

The FCPA Guidance also goes on to say that use of local language is a key component to a minimum best practice FCPA compliance program when it said, “Indeed, it would be difficult to effectively implement a compliance program if it was not available in the local language so that employees in foreign subsidiaries can access and understand it.” But more than this simple prescription the understanding of how to treat foreign languages has bewildered many companies, particularly when they have faced a multi-nation and multi-lingual internal investigation.

Many compliance practitioners do not normally consider translations as a part of an effective compliance program. However, I believe that through the effective use of translation services, companies can use language localizations as a part of the answers to McNulty’s Maxims and to use language to move from detect to prevent in any best practices anti-corruption compliance program. The key is to think globally, both for the extraordinary events any multi-national company might face and the ordinary, day-to-day work of the compliance practitioner. By doing so you can move from a simple detect mode only to using language as a part of your preventative prong as well.

However, more than simply using language translation as a part of your detection prong of a best practices anti-corruption compliance program, through the localization of the languages in a multi-national organization, you can move towards prevention of a potential FCPA violation. Any best practices compliance program is going to have a wide number of documents to govern and guide its employees.

The FCPA Guidance provided a clear statement that the government expects language localization to be used. In two of the hypotheticals, the Guidance contrasted one company, which after an acquisition, circulated its “compliance policies to all new personnel after the acquisition, it does not translate the compliance policies into the local language or train its new personnel or third-party agents on anti-corruption issues.” When conduct violative of the FCPA continued to occur after the acquisition, the DOJ indicated that it would prosecute under the facts presented.

This was contrasted with a fact pattern where, in another post acquisition setting, Company B’s business lines were merged into Company A’s own robust internal controls, including “its anti-corruption and compliance policies, which it communicates to its new employees through required online and in-person training in the local language.” Based upon these factors, “DOJ and SEC have declined to prosecute companies like Company A in similar circumstances.”

It is clear from these hypotheticals, that the use of localized language can not only help a company demonstrate to the DOJ that it does have an effective compliance program but also that such localization of language can help to prevent conduct from becoming full blow FCPA violations. Consider what the Guidance says about training, “Regardless of how a company chooses to conduct its training, however, the information should be presented in a manner appropriate for the targeted audience, including providing training and training materials in the local language.” Simply giving your FCPA training in English, even if your company has a worldwide English language use policy in place, will not be sufficient.

By their nature FCPA investigations demand a different level of sophistication and execution. Moreover, document translation is not an isolated event. By engaging a professional LSP to help you set up a foreign document review protocol, you can leverage filtering and translation solutions that will result in a more cost and time efficient language management process and assist in preventing corruption issues from becoming FCPA violations. In other words, document translations can be a part of your preventative prong.

Depending on the type of organization, manufacturing, sales, distribution, or a combination of all three and the number of countries and the local languages where your company conducts global business, your business will most likely need to translate or localize some, if not all, of the following documents:

  • Code of Conduct
  • Anti-Bribery Policy
  • Anti-Corruption Policy
  • Third Party Due Diligence Questionnaire
  • Contracts

Ethics and legal compliance documents usually fall under the scope of corporate legal or compliance, HR, internal audit or training stakeholders.  In some corporations, the documents may also belong to an import/export or ITAR group.  Source material will most often be in English and require translation into a number of languages. These services may be sourced directly by your Company or through outside counsel.

Often, local stakeholders may suggest engaging “in-country” resources to translate these materials.  These resources are often bi-lingual employees whose primary role is something other than translation. While certain internal communications may be best handled by “in-country” resources, the timely translation of ethics and compliance documents is usually best accomplished when outsourced to a trusted LSP who is accountable for meeting quality standards and delivery deadlines.  “In-country” resources can be valuable partners for reviewing translated content to ensure it meets local standards but such partnerships between outside LSP and internal resources are highly recommended.

Once the documents have been translated, the LSP will maintain a Translation Memory (“TM”) that can be leveraged to minimize the costs of future code and policy updates as well as repurposing ethics and compliance material for eLearning, HR, internal audit, and training. This means that once you complete the initial translation of key compliance program documents, you will only need to update them on your regular updating rotation, typically every two to three years. Moreover, you can use your base compliance documents and your training documents on a rotating basis. Finally, you can use these same documents to expand the reach of your compliance program by training third parties in your sale side or supply chain, which is fast becoming a minimum best practice; which not only the DOJ and SEC expect to see, but also businesses up your chain that you might contract with.

Scott Killingsworth has coined the phrase ‘private-to-private’ or “P2P” for the phenomena that I called a business solution to a legal issue. In practice it works something like this. A company needs a product or service. As part of the regular contracting process, the company will inquire into the contractor’s compliance function and policy. If the contractor provides a service which deals with a foreign government in any way or has foreign government touch points, the service company may well come and audit the contractor’s compliance program prior to executing the contract. Thereafter the contractor is subject to being audited for not only the execution of the contract but also the continued maintenance of its compliance program. All of this is done for business reasons. It is a business response to a legal issue, that being compliance with the FCPA. However, through the use of localized language you will be able to go far towards satisfying any business partner who may want to review the overall effectiveness of your compliance program.

Finally, engage a LSP with specific subject matter expertise (SME) in FCPA and UK Bribery Act (UKBA) ethics and compliance translation and localization. This allows you to leverage not only your own company’s internal resources but a LSP with specific FCPA or UKBA experience. This experience will enable your compliance program to have the full benefit of service provider with a solid anti-corruption/anti-bribery focus to assist in the maturing of your compliance regime.

By seeking out a professional and reputable legal translation solutions provider, the Company will be taking an important first step in guaranteeing the quality of its ethics and compliance translations and establishing the cornerstone of a global corporate compliance and ethics translation program. You will also follow the prescripts of both McNulty’s Maxims and the FCPA guidance by moving the use of language from only a detect component of your anti-corruption compliance program but to a more sophisticated and more cost-effective prevent mode.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2015

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