Multinational companies in South Africa – with business links in the United States of America (USA) and the United Kingdom (UK) – are committed to abiding to the Foreign, Corrupt Practices Act (FCPA) of the USA or the UK Bribery Act. However, employees – whose bonuses may be linked with successfully selling products abroad or concluding an international deal – may conduct themselves in such a way as to enhance their own performance but which may trigger the FCPA or the UK Bribery Act. Such employees may be unfamiliar with the net of the FCPA/UK Bribery Act and be operating under the impression that if their conduct has no connection to the USA or UK, they will not contravene the Acts. Similarly in Competition Law related matters, companies often become aware of the unlawful conduct of an employee long after the damage has been done.

Since its passing in 2010, the UK Bribery Act has introduced laws which have far reaching effects for any South African company with ties to the UK and it's vital for South African CEO's to be aware ot the far reaching effects of the act. The mere fact that a bribe is channelled through certain banks and only one of those banks has a connection with the USA or UK – may trigger the FCPA or the UK Bribery Act. In addition, the FCPA may be triggered if USA currency is used to pay the bribe. That means that even with no connection with the business conducted in the UK, the business in question will be prosecuted by the UK authorities. The same applies for the USA and will be regarded as a contravention of the FCPA.

As CEO, what must you do?

  • Firstly, your board must be made acutely aware of the Acts and their consequences. The CEO should send out a message of 'zero tolerance' to all employees; who must also be trained on the workings of the FCPA and the UK Bribery Act. Training should include practical examples of the kind of conduct that may put the CEO, the company and the employee at risk.
  • Secondly, ensure that you have policies and procedures in place to prevent a contravention of the FCPA and the UK Bribery Act.

When management becomes aware of a possible contravention of the FCPA or the UK Bribery Act, they must immediately report such knowledge via the correct channels. Self-reporting will not indemnify a company from prosecution. However, directors could avoid heavy fines and imprisonment if they are able to demonstrate that the company put in place adequate procedures to prevent offences of bribery.

As a CEO, why should you care?

To prevent you from being arrested when you enter the USA or the UK for a crime that you did not commit, but – as CEO – you must now take responsibility for, and account to foreign authorities.