eDiscovery, International Business, And The Challenges Of Complying With FCPA

By: Dean Gonsowski, Associate General Counsel, Clearwell Systems

In today's global economy, cross-border commerce is vital to the success of many businesses. However, to ensure that lawful business practices are adhered to more corporations are increasingly coming under the federal government's microscope for their international operations. After several investigations in the mid-1970s into a range of international corruption, the Foreign Corrupt Practices Act (FCPA) was created to address the bribery of foreign officials and address accounting transparency requirements under the Securities Exchange Act. While the FCPA was created to safeguard against corruption, it also poses some difficult challenges for legal and IT departments when it comes to anti-bribery cases due to the complexity of today's communication mediums and transaction types.

It has become extremely difficult to identify how bribes are suggested, accepted and transacted. Adding to the complexity of these investigations is that most suspects typically use nuanced communications in different languages to disguise wrongdoings. As suspects become savvier in hiding their digital paper trail, corporations face increased difficulty with FCPA compliance. With greater FCPA enforcement looming, many enterprises are taking a proactive approach to this problem by turning to electronic discovery (e-discovery) technologies to expedite and streamline the discovery of electronically stored information (ESI) for compliance purposes.

2010 was a record breaking year for FCPA enforcement with the number of enforcement actions jumping 85 percent, according to data tracked by the law firm Gibson Dunn & Crutcher. Last year's passing of the Dodd–Frank Wall Street Reform and Consumer Protection Act will also likely have a great impact on FCPA enforcement as whistleblowers will be rewarded for voluntarily providing original information about violations of the securities laws. To further complicate matters, more countries are instituting their own similar regulations – like the U.K. Bribery Act – making it all the more challenging for multi-national companies to comply with a wide range of disparate international laws.