GRC Controllers




Newsletter | Volume 1

Issue I
Issue II
Issue III
Issue IV
Issue V
Issue VI
Issue VII
Issue VIII
Issue IX
Issue X

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Cash Cows called EU Competition Law, BA and FCPA



Robust Risk and Compliance programs are required when doing business in the EU. Fines from oversight authorities have skyrocketed in recent years: From 1995 to 1999, cartel fines totaled 271 million euro ($366 million); in the next five years, to 2004, they jumped to 3.2 billion euro ($4.3 billion), in the next five years ending in 2009, they tripled over those previous five years to 9.8 billion euro ($13.3 billion) and continues to double or triple each year now.


The European Parliament recommends greater emphasis on the strength of the target companys ethics and compliance program. The lack of these programs is a decisive factor to help determine the size and possible fines against the company.

The ideas in the EU have close parallels the U.S. Sentencing Guidelines with emphasis on the quality of the compliance program as a way to encourage good corporate behavior in the companies.

Other weapons by the European Commission and Parliament to supplement large fines include:
  • Increased insistence on transparency
  • Efforts to streamline enforcement procedures
  • Increased emphasis on the right of defense and due process;
  • Mechanisms to improve the effective operation of leniency applications
  • The first cartel member to report anti-competitive practices voluntarily is afforded more lenient treatment
  • Fines are proportionate to the breach being punished
  • Define the specific criteria under which parent companies can be made liable for cartel-like behavior by their subsidiaries.

These measures could indicate a shift away from ever-increasing fines, and perhaps come as the result of increased economic pressures on all companies straining to recover from economic bad times.

Previously the focus was on focus on extracting larger and larger fines. The European Commission like its US counterpart however now strives for a balanced approach to high fines and penalties.

On the other hand for repeat offenders they wish to serve the high fines as an effective deterrent, and encourage the implementation of adequate Good Governance, risk Management and Compliance.