Temitope Fadeyibi  Lawyer and Global Compliance, Ethics & Policy Professional

The objective of most businesses at some point is to expand and operate internationally, however, this presents unique compliance requirements, especially for startups and businesses that have dominated their local markets. Doing business globally, particularly with entities connected with the United States, comes with a wide range of compliance requirements that companies, regardless of their size or industry, must adhere to. Therefore, c-suite executives and other corporate professionals must thoroughly understand compliance requirements to ensure that their global business operations comply with all relevant laws and regulations.
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As the company secretary coordinating compliance matters for a multinational company operating in several countries in West Africa and sitting in board meetings companies, I have extensive experience on the compliance priorities for a start-up.

The most recognized compliance requirement that is always in the news is the United States Foreign Corrupt Practices Act (“FCPA”). It is expected that most professionals working internationally are familiar with the FCPA and it is usually the first item in most compliance policies and procedures. The FCPA prohibits companies and individuals from making corrupt payments to foreign public officials to obtain or retain business. Compliance with the FCPA is essential, as violations can result in significant fines, penalties, and reputational damage.

 

The issue I have addressed with most startups is that a compliance program solely focused on the FCPA is not adequate to prevent, detect, and mitigate regulatory compliance risks for a business with international aspirations.  A robust compliance program should include several components, including the development and deployment of comprehensive compliance policies and procedures, training, audit, and sanction to abate incidents of noncompliance beyond the FCPA.

There are several other important compliance requirements that executives and other corporate professionals need to be aware of to avoid undue exposure such as:

1. Competition law. The US and several other jurisdictions have strict antitrust laws in place to prevent monopolies and promote fair competition. This includes laws prohibiting price fixing, bid rigging, and other anti-competitive practices.
2. International trade. Companies should also be aware of laws and regulations related to the export of commodities and services, including “deemed exports” defined in the Export Administration Regulations (“EAR”) as “any release of technology or source code subject to the ear to a foreign national”; import of commodities; trade sanctions; free trade agreements amongst others.
3. Privacy and cybersecurity law. Several laws and regulations are in place to protect personal information, which requires companies to implement robust data protection measures and be transparent about their data practices.
4. In addition to these specific compliance areas, companies must also have robust internal controls in place to detect and prevent potential violations. This includes policies and procedures to address issues such as conflicts of interest, information protection, and anti-boycott laws.
5. Companies must also be aware of laws related to political contributions and gifts. The US and other jurisdictions have strict laws in place to prevent companies and individuals from making illegal political donations, and companies must also ensure that any gifts or entertainment provided to government officials comply with the law.
6. It is important to note that compliance requirements are becoming increasingly globalized, and many countries are implementing stricter laws and regulations related to anti-corruption, data privacy, and other key compliance areas. It is also important to note that compliance requirements in the US may differ significantly from those in other countries. Consequently, companies operating in the US and other countries must stay informed about compliance requirements in all markets in which they operate to ensure compliance with all relevant laws and regulations.

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Companies should not assume that compliance is less of a concern in other countries, as many are implementing stricter laws and regulations to protect against corruption, bribery, data privacy, and cyber security. Companies need to stay informed and proactive in addressing compliance issues in all markets in which they operate to protect themselves from potential fines and penalties and to maintain a positive reputation. This includes not only adhering to local laws and regulations but also complying with international standards such as the OECD Anti-Bribery Convention and the United Nations Convention against Corruption.

 

Additionally, companies should also consider engaging in regular risk assessments and implementing robust compliance programs to address potential compliance issues proactively. By staying informed and proactively addressing compliance issues, companies can protect themselves from potential legal and reputational consequences and ensure compliance with all relevant laws and regulations.

 

In conclusion, the question companies and executives need to address in their organization is why spend considerable time and resources to develop and deploy a compliance program. A possible approach is the short-term one, which is to know what is necessary about compliance to get a transaction done, or to adopt the long-term approach to develop an ethical compliance culture with dedicated compliance resources where everyone in the organization complies with all applicable laws, rules, and regulations to sustain the reputation of the organization.
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