DOING BUSINESS IN SUB-SAHARAN AFRICA:
WITH NEW OPPORTUNITIES COMES RISKS AND PITFALLS UNDER THE FOREIGN CORRUPT PRACTICES ACT (FCPA)
By: Herbert A. Igbanugo, Esq.
Now, more than ever, enforcement of the U.S. Foreign Corrupt Practices Act (FCPA) is a top priority for the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) as they strive to prevent U.S. companies, employees, and agents from engaging in bribery of foreign government officials to obtain or retain business in overseas markets. By any measure, 2008 was a brutal year in FCPA enforcement and the trend has continued upward in 2009. This surge is especially problematic for U.S. companies seeking to expand their business and grow their target market in Sub-Saharan Africa (SSA), where fresh and unique opportunities abound, but an endemic culture of bribery, illegal gratuities, economic extortion, and other corrupt practices continue to flourish.
Tips to Reduce Risks and Exposure Under the FCPA in SSA
1. Liaise with culturally competent personnel in the worthwhile endeavor to combat corruption.
2. Pay foreign national employees by U.S. wage standards, which will certainly kill the incentive to engage in corrupt practices.
3. With respect to U.S. expatriates, do not tie financial incentives and bonuses to striking business deals as this represents the "kiss of death" in so many ways.
4. The U.S. government should work closer with the United Nations to put much more pressure on other foreign governments to enforce anti-corruption laws, etc.
5. Be watchful or alert to the following "unusual suspects" of fraudulent schemes prevalent in many parts of SSA.