Companies in the region could find themselves in hot water if they are unaware of strict US anti-corruption laws
Hong Kong companies that comply with local laws on bribery and corruption may still be at risk of prosecution by merely having peripheral dealings with American businesses, which are subject to much tougher laws.
The Foreign Corrupt Practices Act (FCPA) is US legislation that criminalises the bribery of foreign government officials. US companies are prohibited from offering or paying bribes, either directly or through commercial intermediaries, to obtain or retain business. Under the act, American companies listed in Hong Kong or vice versa are liable to prosecution if caught.
'The big focus is on anti-bribery and anti-corruption laws. The FCPA has been around since the 1970s, but the level of enforcement has increased. Violations are tied to money laundering, which is tied to the war on terror,' according to Scott Lane, chairman of the Red Flag Group, an anti-bribery consultancy.
'The US law is very powerful. A Norwegian company paid a bribe in Norway, but wired the money through a US bank. They were caught. Other countries are now starting to crack down on corporate bribery,' he added.
Based in Hong Kong, the Red Flag Group advises companies about anti-bribery compliance programmes, undertakes due diligence, conducts audits and investigations, and provides training and conferences.