Thomson Reuters has undertaken its annual survey into the cost of compliance and the challenges firms expect to face in the year ahead. The report builds on annual surveys of similar respondents conducted over the last six years, and where relevant highlights year-on-year trends and developments. – Between November 2014 and January 2015 nearly 600 practitioners, including a significant number of heads of compliance, from financial services firms around the world provided their insight into the costs of compliance and the greatest compliance challenges firms expect to face during the year ahead. The report findings are intended to help regulated financial services firms with planning, resourcing and direction.
There is a sense in the United States that compliance professionals are moving into the crosshairs of government enforcement actions. For years, the government has sought to bring actions not only against those who committed the primary violations, but also against the so-called “gatekeepers;” the lawyers, the accountants, and now, the compliance professionals who the government believes facilitated the illegal misconduct. When misconduct is uncovered in a company, US enforcement officials will always ask, “Was the compliance system adequate?” Senior enforcement officials will ask their investigators whether the company took appropriate steps to detect and prevent misconduct in determining whether an action against the company is appropriate.
Well, that’s a good question. And the answer is not simple, because the legal test can vary from country to country.
Very much so, perhaps more than many people realize.
The effective and healthy Rule of Law needs various groups of agents including a corps of Whistleblowers. The nature of corruption offenses is latent i.e. present but not visible. Therefore, Whistleblowers play an important role in fighting corruption through disclosing violations and other breaches of the law. In addition, an effective mechanism for the protection of Whistleblowers and an environment supportive of their role can play a preventative role as well. Organizations and companies will have a natural interest in maintaining legitimate and transparent operations.
The Fifth Annual High Level Conference on Anti-Corruption, jointly organised by the Turkish G20 Presidency and the OECD was held in Istanbul on 6 March 2015 with a theme of “Placing Integrity at the Heart of Business Culture”. G20 Anti-corruption working group members, invited representatives of national and international business, civil society, academics and members of the media attended the Conference. The fight against corruption is instrumental to ensure that all businesses, from SMEs to MNEs, play their part in contributing to growth and investment, and can operate with clean hands in a safe business environment. In this context, the Conference aimed at reinforcing the cooperation between governments, private sector and civil society, thereby supporting the implementation of the G20 ACWG agenda on promoting private sector transparency and integrity.
In an atmosphere of uncertainty over the issue of personal liability of management and supervisory board members in light of the myriad of compliance violations that can arise in the daily life of a globally operating company, there has been an emergence of “compliance certificates” that come in various shapes and forms. The following article assesses the liability exposure that such certificates may address under German law and discusses the limits of these new products.
Journalist, Gaynor Pengelly asks a panel of Aerospace & Defense experts what is being done to tackle the rising tide of bribery and corruption. ONE of the biggest headaches for companies conducting business overseas is bribery and corruption. The grey area of what is deemed a fair gift, meal or payment against what might be constituted a bribe is a challenge keeping senior executives up at night. And with the screws being tightened on enforcement of anti-bribery laws, such as the UK Bribery Act and US Foreign Corrupt Practices Act, this problem looks set to bedevil the industry for years to come.
With very little warning or publicity, Public Works and Government Services Canada (PWGSC) announced significant changes to its Integrity Framework in March 2014. The changes were so significant that business interest groups and multinational companies are still grappling with their consequences. It will affect relevant multinationals’ ability to bid on federal contracts for 10 years. PWGSC is not necessarily a well-known Government of Canada (GoC) department. However, in terms of procurement and the power it can yield over multinational companies seeking to supply goods and services to all sectors of the Canadian government, it holds a very big stick.
The activation of a WB system makes a company’s internal activity more transparent and easier to track. It also facilitates the exposure of illegal acts inside the company. It warns the company of existent threats that may cause serious damage, such as hazards to employees and customers, fraud and bribery or environmental offences. A WB system can be an excellent tool to identify crime, violations, corruption and poor administration and thus prevent a critical situation including economic or reputational damage. In general, inappropriate behaviour goes underground and it is difficult to uncover. Since whistleblowers are internal to the company, they all have the possibility to detect corrupt acts as they work in close proximity to possible “crime scenes” and can provide compelling evidence.
It is generally accepted that there has been an intensification of anti-corruption efforts in the past five years. This is part of a wider trend which has witnessed a clampdown on tax evasion, fraud, sanctions-busting and white collar crime. In the sphere of tackling bribery and corruption, the intensified assault has involved a two pronged approach: increasingly aggressive FCPA enforcement and the clear strengthening of anti-corruption legislation, principally through the UK Bribery Act.
In December 2014 Barbara Neiger, lead auditor, consultant and trainer for Compliance Management Systems received a Master’s degree in Anti-Corruption Studies (MACS) as a student of the first ever international Master’s program in anti-corruption. She discusses her experience below.
Thank you, and I appreciate the invitation to return to Experts’ Corner, especially in the context of the OECD Bribery Report, which I have found to be extremely relevant and resonating. As it states in the introduction “in order to fight corruption and win, we have to know our enemy,” and the Report really does an incredible service by drilling down into the details of what that actually means.
So it would appear. In October 2012 the OECD issued its “Phase 3” report on France that was critical of its efforts, and in November 2014 it noted that France had made little progress since. One simple way of looking at it is that in the 14 years since France adopted OECD-compliant legislation criminalizing overseas corruption, not a single company has been definitively convicted of overseas corruption. (As I’ll describe below, one company was convicted in the first instance but was very recently acquitted on appeal).
Australia has had a compliance standard since 1996 (AS/NZS2806). The Standard was then updated in 2006 and forms the basis of ISO 19600. As more and more countries implemented more complex regulations, including some with extraterritorial reach, the potential benefits of a uniform standard became evident. The Compliance Standard ISO 19600 consists of over-arching guidelines on what companies could and should do, in order to respect ever-increasing compliance obligations, irrespective of how they originate.
The Secretary-General was invited by ETHIC Intelligence to contribute answers to written questions for publication on the occasion of International Anti-Corruption Day on December 9.
Fiona Coffey is the author of a report from the Institute of Business Ethics which examines the role of those working in Ethics and Compliance in improving corporate culture. She discusses her research below.
There have been a number of corporate scandals in recent years that have got people asking whether businesses can reform themselves and promote ethical behaviour from the inside.
The law of December 6, 2013 modifies numerous provisions of criminal law and criminal procedure. These amendments were the result of a government objective to combat more effectively economic and financial wrongdoing and, in particular, corruption. This willingness to introduce tougher measures is evidenced by harsher sanctions and enhanced means of investigation now at the disposal of the investigative services.
Customs clearance is the key point of international business. Whatever the value of the goods, shipment size, or shipper and consignee experience, “clearing goods” is an everyday challenge usually sub-contracted to brokers. They face pressure from both the customer and the relevant administration to simply execute their daily job. Their customer may be the exporter, the importer, both or neither. It could be their own agent in another country. All expect them to clear goods as fast as possible and avoid controls by customs authorities. This is where corruption risk appears.
As the ERM (Entreprise Risk Management) industry continues to evolve, corporate responses to enterprise risk vary immensely. Companies use a number of overlapping frameworks to understand and respond to risk. Most of these frameworks are one-dimensional focused on prevention and internal controls. No surprise, then, that the organizational response to risk is so fragmented: Many companies view risk management as a cost and fail to incorporate it into strategic and commercial considerations. In beefing up risk management functions, corporations have generally hired risk management specialists from the financial services industry, perpetuating a quantitative, market-based focus.
This year, following the annexation of Crimea by Russia and other military activities in Southern Ukraine, sanctions were imposed by the US and EU. These new sanctions, along with Russia’s self-imposed food ban, began to reshape internal markets and to alter corruption levels in the country. Just prior to that, President Putin’s anti-corruption campaign which had kicked off in 2011 and was meant to make up for the lack of deep structural reforms and restrain certain key players, produced mixed results.