Expanding business into international markets is often key to a successful growth strategy for both small businesses and large enterprises. While going global presents endless possibilities for growth, it also raises serious compliance risks that if overlooked, can quickly offset the benefits of reaching new customers.
One of the biggest, and less obvious, challenges of doing business overseas, particularly in emerging markets, is corruption. U.S. companies doing business abroad must comply with the U.S. Foreign Corrupt Practices Act (FCPA) which prohibits companies or individuals from paying bribes to foreign government officials to obtain or retain business. FCPA violations can lead to significant corporate penalties, reputational damage and jail time for individuals involved in the misconduct.
Any company, regardless of size, sector or business model, will at some point need to engage with foreign officials when establishing operations overseas. Such business interactions raise the possibility of being asked for a bribe. Before you take the leap into new markets, you should be sure your company is prepared to manage bribery risks and ask yourself the following compliance questions:
Addressing these questions at the same time that you make the business decision to enter a new market may ultimately be the difference between success and failure. If you don’t know where to get started, there are several resources and organizations including TRACE that can help.
Virna Di Palma is Senior Director of Global Strategy & Communications at TRACE, a globally recognized anti-bribery business organization. Prior to joining TRACE, Ms. Di Palma produced international trade and anti-bribery compliance conferences worldwide and was also a researcher on counter-terrorism strategies for a London-based think tank.