No time to relax in the fraud fight

December 08, 2009 | BY

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The awareness of FCPA compliance is reaching a tipping point, but other countries are now entering the arena with their own extra-jurisdictional legislation

In putting together CLP's annual feature on what will (or may) be big next year, I have spoken to a lot of people who spend almost all of their time analysing China, following trends and working out the implications for their own, or their clients', businesses.

Needless to say, there are many issues. But space is limited, and we have had to distil reams of valuable comments into just seven pages of coverage. Hopefully, the stories we have selected reflect the present reality of doing business in China.

There is space here to add some other thoughts. We have highlighted the continuing pressure for unionisation and how best to deal with it. But another vital issue to bear in mind when looking at your employees is fraud and corruption. As I wrote last month, almost all companies in China have experienced or will experience some kind of fraud. The US Foreign Corrupt Practices Act has been in force for some time now, and many companies are now aware of the heavy burden it places on them to ensure all of their employees remain compliant.

One lawyer told me during the course of my research that he believes we are reaching “a tipping point” in terms of the awareness of local managers on the ground as to the importance of this type of compliance – perhaps due to some very well-publicised cases worldwide.

This is encouraging, but the pressure on companies will only increase: other countries are now following the US with their own plans to issue tough and far-reaching laws. It is vitally important that the trend of awareness and action continues, and that companies remain constantly on their guard against fraud. The first signs will be very small.

In our next issue, to be published in February 2010, we will take a closer look at how anti-corruption laws at home may affect your China businesses, and what you can do about it.

In the meantime, enjoy the coming holiday season. And, as always, please feel free to make your thoughts and opinions known by contacting me using the details below.

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