How PricewaterhouseCoopers helps clients with Foreign Corrupt Practices Act challenges*

• Agricultural equipment Agricultural equipment
  
  
  • PricewaterhouseCoopers was retained to assist one of the largest manufacturers and distributors of agricultural equipment and replacement parts in the world to perform a Foreign Corrupt Practices Act compliance review and assessment. The Company markets and distributes its products through a network of over 3,500 independent distributors, dealers and licensees spanning over 100 countries in North America, South America, Europe, Africa, Middle East, Australia and Asia.
    
    We evaluated established policies and procedures for Foreign Corrupt Practices Act compliance and internal control effectiveness, identified key locations, assessed and documented current levels of authority and delegated authority, and conducted interviews in the areas of accounting, finance, treasury, purchasing, and sales. Deficiencies in the internal controls environment were identified and recommendations for enhancement were provided.
  
  
  
• Automobile Automobile
  
  
  • Conducted an investigation of alleged Foreign Corrupt Practices Act violations for a multi-national automobile manufacturer and retailer in response to whistleblower allegations. The Company operates in over 100 countries using several different business models. PricewaterhouseCoopers's global investigations resources from the US, Africa, Asia, Europe, and Latin America were used to conduct on-site investigations in 14 countries. Our investigation included analysis of documents, interviews of personnel, and the extensive use of PricewaterhouseCoopers's proprietary electronic discovery tools. We also assisted with a coordinated review and revision of policies and procedures, development and roll-out of a comprehensive training program to several thousand employees, implementation of a Compliance Office and hot-line, and a comprehensive review of methodology used in recording select transaction types.
  
  
  
• Chemical Chemical
  
  
  • Conducted an investigation of alleged government payoffs and corrupt practices for a leading US chemical, plastics and agricultural products client with operations in India, Egypt, Brazil and Europe. Identified improper payments including payments made to expedite registration and approval of certain chemical applications as well as payments to state and local government officials to market and distribute the products. The investigation resulted in an extensive overhaul of corporate structure and reporting, enhanced internal controls at corporate and local offices and implementation of a global compliance and ethics program.
  
  
  
• Defense Defense
  
  
  • Investigated whistleblower allegations of Foreign Corrupt Practices Act violations related to the award of a contract by a Middle Eastern government. The investigation included searches of electronic data for payments made via various sources (i.e., wire transfers, accounts payable checks, intercompany transfers and manual entries to the general ledger) to individuals or entities in the related country. Searches were also conducted of travel and entertainment reimbursement records to identify whether anything of value was provided to a person or organization in the specific country as well as to identify meetings with related persons or organizations. The investigation also included a review of various in-country payments (i.e., sponsorship charges, representative fees, in-country support charges) as well as local offset arrangements to fulfill obligations required by certain contract awards.
  
  
  
• Engineering and systems integration Engineering and systems integration
  
  
  • Conducted an investigation of alleged violations of the Foreign Corrupt Practices Act as a result of a DoJ subpoena received by the Company. Our investigation included analysis of documents, interviews of personnel in the US and Eastern Europe, and the extensive use of PricewaterhouseCoopers's proprietary electronic discovery tools. Approximately two million e-mail messages and computer hard drive files were captured and placed into a searchable database that was 'keyword searched' in three languages. In addition, the Company's general ledger and supporting electronic financial information for a three year period was downloaded into a searchable database and analyzed. The Company fully cooperated with the DoJ from the onset. PricewaterhouseCoopers and the Company's counsel provided presentations to the DoJ during the investigation.
  
  
  
  • Conducted an investigation of alleged Foreign Corrupt Practices Act violations of a multi-national technology and engineering company. PricewaterhouseCoopers was retained to investigate allegations that the company was paying for customers of government-owned entities to visit the US for non-business related trips. As part of this investigation, we reviewed employee expense reports and inter-company accounts, we interviewed various individuals and compiled relevant facts.
  
  
  
• Financial servicesFinancial services
  
  
  • Retained by the Audit Committee to assist with an investigation to identify and quantify compliance risk and exposure with respect to Nicaraguan joint ventures with state-owned enterprises. PricewaterhouseCoopers conducted a variety of bribery and corruption investigative procedures in Nicaragua that included a review of the books and records of the joint ventures along with a comprehensive exposure analysis of sensitive in-country accounts. We developed a detailed database that assisted in assessing the nature, business purpose and beneficiaries of wire transfers and certain other transactions, including intercompany transfers. PricewaterhouseCoopers provided the Audit Committee with our findings and recommendations, including control enhancements for stronger policies and procedures.
  
  
  
• Health Care Health Care
  
  
  • Conducted an investigation in 18 countries in Asia, Europe, and South America to address allegations of violations of the Foreign Corrupt Practices Act. This matter was particularly sensitive, since it arose in the midst of due diligence procedures being performed by an acquiring company.
    
    PricewaterhouseCoopers's global investigations resources from the US, Asia, Europe and South America were used to place field teams in all 18 countries within a week of being contacted by the external law firm. An analysis of accounting records was conducted at all locations in conjunction with extensive interviews of company employees. The nature and extent of potential violations of the Foreign Corrupt Practices Act was documented for review by counsel. Our findings were voluntarily disclosed to the regulators. The matter was successfully resolved and the acquisition was completed.
  
  
  
  • Conducted an investigation of alleged inappropriate payments under the Foreign Corrupt Practices Act and non-monetary remuneration given by a private company's local distributor to doctors employed in state-run hospitals in China. The investigation included analysis of accounting records and interviews of Company personnel. PricewaterhouseCoopers performed an analysis of over three years of cash payment documentation, identifying suspected inappropriate travel and expense reimbursements, medical conference sponsorships and cash payments made to hospitals. The results of the analyses were provided to outside legal counsel. As a result of the investigation, the Company ceased doing business with its Chinese distributor.
  
  
  
• High-tech High-tech
  
  
  • Conducted an investigation of alleged government payoffs and corrupt practices for a US high-tech client conducting business in South America. Identified suspected bribery payments and traced payments through a US based company. The investigation resulted in a re-engineering of internal controls and implementation of a corporate training program.
  
  
  
  • Working with members of a Company's legal department, we assisted with the development of an overall Foreign Corrupt Practices Act Compliance Program. This included, among other things, providing compliance consulting and compliance program development advice, helping with the development of compliance program specifics, assisting with the development and delivery of enterprise-wide Foreign Corrupt Practices Act training, and developing and conducting further tailored training for certain geographical areas. We also prepared and assisted with the development of their due diligence questionnaire and performed (with subcontractor assistance) specific due diligence in countries including the Philippines, Colombia, and Pakistan.
  
  
  
  • Conducted an investigation into alleged Foreign Corrupt Practices Act violations by a German high-tech company that had recently been acquired by a SEC registrant. The German subsidiary had been conducting business in Kazakhstan, Russia, Central Asia and other Eastern European countries. The investigation included an analysis of sales commissions paid via wire transfers into sales agents' bank accounts, a review of selected e-mail accounts and user files, background checks on select sales agents and customers, and interviews of company personnel.
  
  
  
• Hospitality Hospitality
  
  
  • PricewaterhouseCoopers conducted a Foreign Corrupt Practices Act review and assessment of books and records compliance for the travel distribution services division of a hospitality and leisure company who has customers in over 130 countries. PricewaterhouseCoopers interviewed more than 30 individuals in senior management, analyzed and assessed current Foreign Corrupt Practices Act books and records compliance policies and evaluated the compliance monitoring controls. As a result of the work, PricewaterhouseCoopers was able to create a current assessment of the company’s compliance environment and monitoring activities with respect to the books and records provision of the Foreign Corrupt Practices Act and identify key observations and recommendations regarding the company’s Foreign Corrupt Practices Act books and records strengths and control weaknesses as benchmarked against the best practices of other major corporations.
  
  
  
• Oil and gasOil and gas
  
  
  • Conducted an acquisition investigation of alleged Foreign Corrupt Practices Act violations in the oil, gas and petrochemical division of a large multi-national organization. The Company had over 700 subsidiaries with operations in 100 countries. PricewaterhouseCoopers's global investigations resources from the US, Africa, Asia, Europe, and Latin America were used to conduct on-site investigations in 20 countries. Our investigation included analysis of documents, interviews of personnel, and the extensive use of PricewaterhouseCoopers's proprietary electronic discovery tools. We collected and analyzed over 1 terabyte of information from 1,500 e-mail boxes representing approximately 5 million e-mails; data from network drives; and over 20 million rows of accounting data from ten different software packages. The information collected spanned a six year period and related to operations in approximately 50 countries. The Company voluntarily disclosed the results of our investigation to the DoJ and the SEC and the disposition was successfully completed. PricewaterhouseCoopers and the Company's counsel provided presentations to the DoJ and SEC during the investigation.
  
  
  
  • Developed and monitored a Foreign Corrupt Practices Act compliance program for a US exploration and production company with operations in 12 international locations. We developed a compliance testing work plan, which is executed annually using US, U.K, and local resources. Results of this testing are provided to the Company's Compliance Officer and General Counsel. We were also retained to investigate allegations of potential Foreign Corrupt Practices Act violations received via the company's compliance hot-line. Teams were deployed to the location in question, conducted interviews, gathered and analyzed supporting documentation, and compiled relevant facts. Our analyses and summary of findings have been used by the Company's counsel in discussions with US regulators. The timeliness and caliber of resources deployed, quality of analyses performed and cooperation with the regulators were crucial in assisting the Company to maintain control of the investigation and related remediation and helping to minimize adverse assessments imposed by the regulators.
  
  
  
  • Retained by a US oilfield services company with international operations to assist with monitoring the activities of its agents and vendors in Latin America, Asia, and Eastern Europe, using an Foreign Corrupt Practices Act Audit Framework developed by the Company. Using the Framework, we assisted in determining the effectiveness of the Client's Foreign Corrupt Practices Act overall compliance system by assessing how well the actions of non-US representatives conducting business on behalf of the client around the globe comply with the Foreign Corrupt Practices Act, the Company's Code of Conduct and its Foreign Corrupt Practices Act policies and procedures. Our procedures included three functional steps: (i) verifying compliance with the Foreign Corrupt Practices Act, Company's Code of Conduct and its Foreign Corrupt Practices Act policies and procedures; (ii) identifying potentially non-compliant circumstances (whether occurring by oversight, error, or intentional and purposeful); and (iii) evaluating the Foreign Corrupt Practices Act audit results to assess whether effective and practicable modifications to the Company's Foreign Corrupt Practices Act policies and procedures (including but not limited to the Audit Framework) were appropriate.
  
  
  
  • Retained to provide assistance with due diligence investigations of potential acquisition targets, specifically related to the targets' compliance with the Foreign Corrupt Practices Act. The engagements included reviews of relevant general ledger accounts, employee expense reports and cash advances, as well as interviews of employees of the targets related to specific transactions identified. In-country PricewaterhouseCoopers staff assisted in the reviews to bring knowledge of local companies, business practices, statutory accounting requirements and tax regulations.
  
  
  
• Pharmaceutical Pharmaceutical
  
  
  • Conducted an investigation of alleged Foreign Corrupt Practices Act violations in the pharmaceutical for a leading global pharmaceutical company in various countries in Western and Central Europe. Our efforts initially focused on gathering and searching financial and other electronic data from a variety of sources, including payments to vendors by check or wire transfer, accounts payable entries, general ledger entries, subsidiary T&E records, and sales and marketing records. In addition to lists of relevant public officials developed by counsel, publicly available databases were also utilized to assist in identifying relevant public officials. The data was then analyzed to identify the transactions (out of millions) that should be reviewed based on criteria established in consultation with outside counsel. Once transactions to be reviewed were identified, we collected, reviewed and summarized supporting documentation, highlighting items for follow up by counsel. We assisted client counsel in Europe and the US in meetings with regulators and provided expertise related to pharmaceutical -specific issues such as risks in certain sales and marketing practices.
  
  
  
• RetailRetail
  
  
  • For a large, internationally located privately held clothing retailer, PricewaterhouseCoopers developed and is delivering Foreign Corrupt Practices Act compliance and other relevant Anti-corruption regulation / compliance training in Brussels Belgium to the Company's European and Middle Eastern representatives.
  
  
  
  • Conducted an international investigation involving allegations of earnings management and allegations of violations of the Foreign Corrupt Practices Act. The Company is a manufacturer of herbs and health supplements and has multiple subsidiaries across the globe including operations in Singapore, Philippines, Indonesia, Malaysia, Thailand, China, Korea, Japan, Russia, Dominican Republic, Brazil, Ecuador, Colombia, and Venezuela. PricewaterhouseCoopers’s global investigations resources from the US, Asia, and South America were used to conduct on-site investigations in more than 10 countries. Our investigation included interviews of personnel, reviews of copious amounts of documents, including hard copy documents and a database with over 400,000 electronic documents for potential accounting improprieties and potential illegal activities. Additionally, using PricewaterhouseCoopers’s proprietary technology, we analyzed the Company’s general ledger to identify unusual activities. We developed a rigorous remedial action plan for the Company to improve its compliance program and controls regarding the Foreign Corrupt Practices Act.