What Enforcement Actions Based On Distributor Conduct Teach About Improving FCPA Compliance Programs

In a recent post, Distributors Under the FCPA, Tom Fox detailed three enforcement actions filed in 2012 which show that the actions of distributors can create FCPA liability for the companies that hire them.  The Smith & Nephew, Oracle and Lilly actions summarized in Tom's post demonstrate the continuing viability of distributor conduct as the basis for FCPA enforcement actions by aligning with previous cases (such as GE InVision and AGA Medical) also grounded on that theory.  Together, those cases make plain that the government perceives no distinction between distributors and any other kind of intermediary used as a conduit for bribe payments.  Tom's post offers a useful jumping-off point an equally significant and far less apparent lesson:  just because distributors' actions can give rise to FCPA exposure does not mean that companies are best served by relying on traditional compliance measures to mitigate the risk they present.