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2 How to use Translation Solutions as a Preventative Tool in Your Anti-Corruption Program As anti-corruption awareness continues to grow in importance at a global level, companies of all sizes are grappling with the question of what it takes to create an effective anti-corruption compliance program that will prevent potential violations and satisfy regulatory requirements. What best practices should a company have in place to assess and respond to charges of fraudulent practices? What compliance measures should be implemented to actually minimize such risks in the first place? Much guidance regarding establishing a sound anticorruption compliance program has been provided by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) to help companies establish business practices that comply with the U.S. Foreign Corrupt Practices Act (FCPA). A thorough understanding of FCPA compliance is important to international companies as well as U.S.-based companies. First and foremost, FCPA liability applies not only to U.S.-based companies, but also to foreign issuers whose American Depository Receipts (ADRs) trade on U.S. financial exchanges. 1 Additionally, the FCPA has served as a foundation for other international anticorruption programs such as the UK Bribery Act and the 1998 OECD Anti- Bribery Convention ( OECD Convention ). Explicitly modeled on the FCPA, the 1998 OECD Anti- Bribery Convention is widely recognized as a landmark accomplishment in anti-bribery law reform member countries have ratified or acceded to the OECD Anti-Bribery Convention. 3 THE ROLE OF LANGUAGE LOCALIZATION IN EFFECTIVE COMPLIANCE PROGRAMS While many companies are making progress in assessing risk and establishing best practices to minimize corruption, one area remains a challenge the communication of compliance programs for companies with multi-national and multi-country employees and operations. For these companies, language localization is a critical step that should be addressed early and on a regular basis to PAGE 2

3 prevent and detect corrupt practices. The following pages illustrate how the DOJ and the SEC assess companies compliance programs based on their efforts at language localization and why companies should make it a requirement of their compliance program. Three simple questions Former Department of Justice (DOJ) and Baker and McKenzie partner Paul McNulty used three simple questions to determine the effectiveness of a company s compliance program: 1. What did you do to prevent it? 2. What did you do to detect it? 3. What did you do when you found out about it? These three questions became part of the U.S. DOJ and SEC FCPA Guidance when they stated, A well-constructed, thoughtfully implemented, and consistently enforced compliance and ethics program helps prevent, detect, remediate and report misconduct, including FCPA violations. 4 Yet, beyond this simple prescription, the understanding of how to treat languages has bewildered many companies, particularly when they have faced a multi-nation and multilingual internal investigation. Many compliance practitioners do not normally consider translations as a part of an effective compliance program. However, through the effective use of translation services, companies can use language localizations in part to answer McNulty s three questions and also to move from a mode of detection only to using language as a part of their preventative program. The key is to think globally, both for the extraordinary events any multinational company might face, and the ordinary day-to-day work of the compliance practitioner. Language translation is a critical component to creating a wellconstructed compliance and ethics program. The DOJ and the SEC underscore its importance in the Resource Guide to the U.S. Foreign Corrupt Practices Act (FCPA Guidance), which states, Indeed, it would be difficult to effectively implement a compliance program if it was not available in the local language so that employees in foreign subsidiaries can access and understand it. 5 PAGE 3

4 LANGUAGE TRANSLATION AS A DETECTION TOOL Consider the following scenario you might face as a compliance practitioner or in-house counsel; you awake one day to find your company on the front page of the New York Times or Wall Street Journal, accused of paying bribes in China. You get a call from the general counsel who wants you to fly to China and begin investigating the allegations. After putting in a call to your outside counsel to meet you at the airport, you begin to consider your investigation protocol and realize that most or all of the documents you will need to review are written in Chinese. What are some of the options you might consider in this situation? You may, at first, consider: Finding an employee who is bilingual Using online machine translation tools for the documents Having your outside counsel send in associates from another office Having your outside auditing teams with forensic accountants in Beijing or document reviewers in Shenzhen translate this information on the fly It may seem tempting to consider such options, but beware. By their nature, FCPA investigations demand a different level of sophistication and execution. Moreover, document translation is not an isolated event. Due to the high stakes involved in mitigating FCPA investigations, it is recommended that the translation of these materials be done through a qualified Language Service Provider (LSP) capable of issuing a Certificate of Accuracy (COA) to confirm that the documents have been faithfully translated to impart the precise meaning of the English-based ethics and compliance policies. Put another way, what do you need to know before you walk through that door and what steps could you have taken ahead of time to prepare for that day? An LSP can provide solutions that include some or all of the following: Language identification Foreign language key word search Machine translation Summary translations Human translations This triage process of filtering foreign language data utilizing technology solutions for language identification, foreign language key word search and machine translation ensures that you only translate those documents that are absolutely necessary. In one recent example of a foreign FCPA investigation, language filtering tools reduced the number of translated documents to 3,000 out of an initial universe of 1,000,000. From this stage, you can move to an intermediate step that provides a summary translation. The next level is a basic translation of any selected document that can be used for information review and assessment. The final level of review provides a COA, which certifies that a second linguist has reviewed the document and agreed with PAGE 4

5 the translation. In other words, it is quality assured by a second set of eyes. This COA can be presented to a regulator for review. Any company with global operations, if they do not already have a trusted translation provider, should seek out an LSP with the capabilities to employ both technology and human translation solutions to minimize the ultimate number of words (pages) to be translated and to match the most cost effective level of translation with each individual stage of the investigation. This is important not only from an investigation and auditing perspective, but these same translation resources can be leveraged to localize compliance, training, elearning and Code of Conduct content throughout the organization. All of these tools should be utilized to reduce the amount of data that requires full translation. Thus the only documents requiring full translations are those that must be presented to an official body (DOJ, SEC). By knowing this information in advance, the accused company s team can concentrate on the job at hand securing the location, collecting the data and interviewing employees. After all this information has been collected and an LSP has been engaged, the team can begin to leverage the above mentioned tools and filtering processes to match appropriate translation solutions to each step of the investigation, contain the costs of human translations and most importantly produce the highest quality translations from professional linguists. LANGUAGE TRANSLATION AS A PREVENTATIVE TOOL Any best practices compliance program is going to have a wide number of documents to govern and guide its employees such as Code of Conduct, whistle blower, anti-money laundering and anti-corruption policies. Beyond simply using language translation as the detection component of an anti-corruption compliance program, multi-national organizations can move towards the prevention of a potential FCPA violation by providing compliancerelated documentation in employees local languages. The FCPA Guidance makes it clear that the government expects language localization to be used. In two hypotheticals, the Guidance contrasted one company, which after an acquisition, circulated its compliance policies to all new personnel after the acquisition, but did not translate the compliance policies into the local language or train its new personnel or third-party agents on anti-corruption issues. 6 When conduct in violation of the FCPA continued to occur after the acquisition, the DOJ indicated that it would prosecute under the facts presented. This was contrasted with a fact pattern where, in another postacquisition setting, Company B s business lines were merged into Company A s own robust internal controls, including its anti-corruption and compliance policies, which it communicates to its new employees through required online and in-person training in the local language. 7 PAGE 5

6 Based upon these factors, DOJ and SEC have declined to prosecute companies like Company A in similar circumstances. It is clear from these hypotheticals that the use of localized language can not only help a company demonstrate to the DOJ that it does have an effective compliance program, but also that such language localization can help prevent conduct from becoming full-blown FCPA violations. Consider what the FCPA Guidance says about training, Regardless of how a company chooses to conduct its training, however, the information should be presented in a manner appropriate for the targeted audience, including providing training and training materials in the local language. 8 Simply providing your FCPA training in English, even if your company has a global English language use policy in place, may not be sufficient. By their nature FCPA investigations demand a different level of sophistication and execution. Moreover, document translation is not an isolated event. By engaging a professional LSP to help set up a foreign document review protocol, you can leverage filtering and translation solutions to create a more cost and timeefficient language management process and assist in preventing corruption issues from becoming FCPA violations. In other words, document translations can be a part of your preventative program. Depending on the type of organization, manufacturing, sales, distribution, or a combination of all three and the number of countries and the local languages where your company conducts global business, your business will most likely need to translate or localize some, if not all, of the following documents: Code of conduct Anti-bribery policy Anti-corruption policy Third party due diligence questionnaire Contracts Ethics and legal compliance documents usually fall under the scope of corporate legal or compliance, human resources, internal audit or training stakeholders. In some corporations, the documents may also belong to an import/export or ITAR group. Source material will most often be in English and require translation into a number of languages. These services may be sourced directly by your company or through outside counsel. CHOOSING THE RIGHT TRANSLATION RESOURCE FOR THE WORK Often, local stakeholders may suggest engaging in-country resources to translate these materials. These resources are often bilingual employees whose primary role is something other than translation. While certain internal communications may be best handled by in-country resources, the timely translation of ethics and compliance documents is usually best accomplished when outsourced to a trusted LSP who is accountable for meeting quality standards and delivery deadlines. In-country resources PAGE 6

7 can be valuable partners for reviewing translated content to ensure it meets local standards, but such partnerships between an outside LSP and internal resources are highly recommended. Once the documents have been translated, the LSP will maintain a translation memory ( TM ) that can be leveraged to minimize the costs of future code and policy updates as well as repurposing ethics and compliance material for elearning, HR, internal audit and training. This means that once the initial translation of key compliance program documents is complete, you will only need to update them on your regular updating rotation, typically every two to three years. Moreover, you can use your base compliance documents and your training documents on a rotating basis. Finally, you can use these same documents to expand the reach of your compliance program by training third parties in your supply chain, which is fast becoming a minimum best practice which not only the DOJ and SEC expect to see, but may also be expected by businesses that you might contract with. Scott Killingsworth, in his white paper entitled, The Privatization of Compliance coined the phrase private-to-private or P2P for a business solution to a legal issue. In practice it works something like this: A company needs a product or service. As part of the regular contracting process, the company will inquire into the contractor s compliance function and policy. If the contractor provides a service which deals with a foreign government in any way or has foreign government touch points, the service company may well come and audit the contractor s compliance program prior to executing the contract. Thereafter the contractor is subject to being audited for not only the execution of the contract but also the continued maintenance of its compliance program. All of this is done for business reasons. It is a business response to a legal issue of being in compliance with the FCPA. However, through the use of localized language, you will be able to go far towards satisfying any business partner who may want to review the overall effectiveness of your compliance program. PAGE 7

8 EXPERIENCE Finally, experts recommend that companies engage an LSP with specific subject matter expertise in FCPA UK Bribery Act ethics and compliance translation and localization, as well as other global anti-corruption laws such as Brazil s Clean Companies Act. This allows you to leverage not only your own company s internal resources, but also those provided by an LSP with specific FCPA or UKBA experience. This experience will enable your compliance program to have the full benefit of a service provider with a solid anticorruption/anti-bribery focus to assist in the maturing of your compliance regime. By seeking out a professional and reputable legal translation solutions provider for language localization, your company will be taking an important first step in guaranteeing the quality of its ethics and compliance translations and establishing the cornerstone of a global corporate compliance and ethics translation program. It will also provide a solid foundation to help the company expand from a detection-focused program to a more sophisticated and cost-effective preventative anticorruption compliance program. SOURCES 1. Foreign Corrupt Practices Act: Four Practical Steps to Minimizing FCPA Risk in Cross-Border M&A, United Language Group, Elizabeth K. Spahn, Implementing Global Anti-Bribery Norms from the Foreign Corrupt Practices Act to the OECD Anti-Bribery Convention to the U.N. Convention Against Corruption, October 9, Wikipedia: Convention#Members 4. A Resource Guide to the U.S. Foreign Corrupt Practices Act, Criminal Division of the U.S. Department of Justice and the Enforcement Division of the U.S. Securities and Exchange Commission, p A Resource Guide to the U.S. Foreign Corrupt Practices Act, p A Resource Guide to the U.S. Foreign Corrupt Practices Act, p A Resource Guide to the U.S. Foreign Corrupt Practices Act, p A Resource Guide to the U.S. Foreign Corrupt Practices Act, p.59. PAGE 8