I’m Alexander Stein, Founder of Dolus Advisors. We deploy expertise in human risk forecasting and psychodynamic intelligence analysis—actionable insight about human behavior and its drivers—to help companies proactively mitigate and respond to corruption, fraud, and other malicious insider and white-collar malfeasance risks. We also partner with organizational governance, culture, compliance, and ethics professionals, as well as international investigations and intelligence firms, and multinational fraud and asset recovery organizations (such as ICC FraudNet),
The reasons for applying standard-based management systems are that standardization reduces complexity and cost whilst increasing effectiveness. Businesses introduce risk and compliance management systems to make sure that their (legal) risks are treated effectively. On top of that, organizations and managers that are suspected of not meeting all their compliance obligations are increasingly exposed to merciless public criticism and strict government enforcement action.
The UAE is one of the most resilient economies in the world. Its visionary rulers foresaw the dangers of over reliance on oil years back, and made determined efforts to diversify the economy. This created a myriad of opportunities in the market and businesses from across the world rushed to the UAE. However, it appears that many international companies, although clearly enjoying the market growth, are oblivious to the implications of such growth on compliance. In terms of anti-corruption, their attention is confined to the US Federal Corrupt Practices Act (FCPA) or the UK Bribery Act and they are unaware of the anti-corruption laws in the UAE.
In October 2016, after three years of work and the participation of experts from 37 countries, the International Organization for Standardization (ISO) published the first international standard to fight bribery: ISO 37001 – Anti-bribery management systems. It is a major step toward international adoption of anti-bribery legislation.
The ISO 37001 standard is designed to be used as a management system in order to instill an ethical business culture in an organization. By applying this standard, organizations make available the best tools for management to maintain a proactive system to fight this phenomenon. In concrete terms, the standard specifies a series of measures to help organizations prevent, detect, and address bribery.
Over the course of the past five years, much has been written about the financial services sector—particularly private equity funds, hedge funds and other private investment vehicles—being in the sights of both the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) for potential investigation and prosecution under the US Foreign Corrupt Practices Act (FCPA).
Each year ETHIC Intelligence hosts the Excellence in Compliance Day for certified companies, accredited auditors and members of the ETHIC Intelligence Certification Committee. This year the meeting took place at the OECD Conference Centre in Paris on September 12 and 13. This day is an opportunity for professionals working in anti-corruption compliance to discuss emerging issues and share views in the constantly-evolving landscape of corruption prevention. The following interview addresses some of the key issues raised at the meeting.
Ten years after the launch of our first certification whose terms of reference were based on the Italian Law 231 and Chapter 8 of the United States Federal Sentencing Guidelines (the so-called 7 steps), more and more guidelines are being issued by various national governments including the UK, Russia, Brazil, Spain, France… These national guidelines are integrated into our terms of reference as they are published.
The future French anti-corruption law on Transparency, Fight Against Corruption and Modernization of the Economy (the “Sapin II Bill”) is in its final stages of adoption after discussions and a vote by both the French National Assembly and Senate. It will be a landmark change in the French legal environment. France had not had a global anti-corruption law and three out of ten companies involved in the top FCPA enforcement actions in the last 20 years were French whereas there has been just one decision by French judicial authorities condemning a French company for corruption and this 15 years after the fact.
Self-knowledge indeed is first a mirror: it calls for a clear judgment on oneself and life situations. Then, it tests one’s courage and determination to get rid of what is not adjusted. Finally, it opens the door to work on oneself.
The new ISO standard 37001 displays all of these features: it invites a critical analysis of situations, requires determination to get rid of unsuitable practices so as to build sustainable growth, founded on ethics.
Dr. Kai Schumacher and Chloe Saby, two Compliance experts from BuyIn, the Procurement Joint Venture of Deutsche Telekom and Orange, with a 28bn € spend in scope, share what they’ve learned developing an effective approach to sustainable Compliance designed to support the imperatives of business.
Take care, please! Paying attention to compliance matters covers a multitude of risks, including that of directors’ personal liability under corporate law & fiduciary duty requirements
As memorably expressed in the words of US corporate law scholar, Stephen Bainbridge, the central problem of US corporate law, especially as regards state (e.g., Delaware) case law governing the duties and liabilities of directors and executive officers is the achievement of an efficient, workable equilibrium between director and officer authority and accountability.
I was struck by the real motivation of the delegations to develop a standard that would be useful and effective for business. The desired outcome was not a foregone conclusion in the beginning. However, after three years of discussions during which ETHIC Intelligence played an active role and, with the superb leadership of Working Group President Neill Stansbury and his Secretary Mike Henigan, agreements were reached and the result is to be published in September 2016.
I think we can learn from the French diplomatic method used so successfully during the COP21 conference on climate last year. Specifically, the fight against corruption can only succeed if there is a joint mobilization by international organizations, governments and civil society included the business community. This necessity is gradually becoming a reality. Governments are mobilizing their efforts as evidenced by the May 12 global anti-corruption summit held in London and the recent bill introduced by French Finance Minister, Michel Sapin, on increased transparency in business.
A third-party assessment is an independent evaluation of a business entity or professional practice conducted by an experienced ethics and compliance professional. Its purpose is to provide an unbiased evaluation of company operations, assess its ethics and compliance policies and anti-corruption controls, and its overall ethical culture. Such an evaluation can help a forward-thinking company identify potential problem areas and improve its ability to manage the risk of ethical violations. Companies have found great value in using such highly specialized outside consultants because the assessments are focused, benchmark the company’s programs against industry standards, and are not influenced by internal politics.
This conference will focus on the latest in research and practice on the topic of anti-corruption Collective Action and business integrity, through a number of high-level panel discussions and interactive sessions that together aim to emphasize the business case for joint engagement against corruption. Practitioners from business, government, international organizations, academia and civil society will be on hand to share their experiences on what constitutes successful Collective Action and how best to make it work.
This comment was made by Georgina Philippou, the then-acting director of enforcement and market oversight of the UK Financial Conduct Authority (FCA) (formerly known as the Financial Services Authority (FSA), in March 2015 when imposing a fine on a Chief Compliance Officer for Bank of Beirut. This announcement came amidst a wave of fines imposed in 2015 by the FCA against compliance officers. Although the FCA has since slowed its pace against compliance officers, the new regulatory regime in the UK keeps compliance officers in the middle of the frame.
On April 5, 2016, Assistant Attorney General Leslie Caldwell, who heads the Criminal Division of the Department of Justice (DOJ), announced a new “FCPA pilot program” designed to motivate companies to voluntarily self disclose FCPA-related misconduct. In making the announcement, AAG Caldwell disclosed a newly released policy document authored by Fraud Section Chief Andrew Weissmann entitled “The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance” (the “Guidance”).1
Certain countries, often small ones, have enacted tax legislation which makes it very attractive for non-resident individuals or companies with no commercial activity in that country to be domiciled there and invest using the local banking system. These countries who have few other economic advantages are then able to generate revenue and create employment in a tertiary sector.
What makes a good Compliance Officer? It’s a question every hiring manager, General Counsel and Board must consider when faced with the need or opportunity to bring that critical person into the business.
The compliance profession is still in its infancy. A couple of decades ago it started in the United States in the financial services and health care sectors, growing out of legal and audit and into its own role. As the UK Bribery Act came into force and more multi-national organizations were stung with fines for failing to comply with all sorts of laws, companies began to hire compliance officers in order address the ever-increasing legal and regulatory expectations placed on them from all angles. As compliance departments grow throughout Europe, Asia and South America, businesses must evaluate who to hire and how to determine what makes a good compliance officer.
The report examines how public trust in officials may be eroded if there is a perception that the acceptance of gifts and hospitality by officials impacts on their decision making. The Civil Service Code (the Code) states that officials must not accept gifts and hospitality where it “might reasonably be seen to compromise their personal judgment or integrity”. The risk is that the official’s decision-making is tainted by hospitality they have received. The report looked at general civil service guidance and registers in BIS, HMRC and the MoD.