The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Training

  • From Vol. 7 No.2 (Jan. 24, 2018)

    Finding the Softer Side: VMware’s Senior Director of Ethics and Compliance Discusses Her Department’s “Re-Brand”

    With the potential to cost companies billions of dollars, anti-corruption violations are no laughing matter, but compliance does not have to be all shock and awe. In a recent conversation with The Anti-Corruption Report, Gwen Romack, the senior director of ethics and compliance at software company VMware, discussed her efforts to better spread the compliance message by softening the edges of her program. See “Creating Engaging and Globally Relevant Ethics & Compliance Materials” (Oct. 18, 2017).

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  • From Vol. 7 No.1 (Jan. 10, 2018)

    High- and Low-Tech Innovations to Overcome Compliance Training’s Drawbacks in the Financial Industry

    The challenge for any organization’s compliance team is to create a meaningful, cost-effective and durable training program while simultaneously satisfying legal and regulatory requirements, especially in highly regulated industries such as banking. In a recent panel at SCCE’s 2017 Compliance & Ethics Institute, compliance officers from financial institutions – including Gary Collins, managing director at BNP Paribas, Melinda Miller, vice president and manager of regulatory compliance at HSBC, and Cassandra Knight, former head of company compliance at Morgan Stanley (now at PayPal) – discussed their experiences providing effective and well-received training in a digital age. See “Training Insights From In-House Experts”: Part One (Jun. 1, 2016); and Part Two (Jun. 15, 2016).

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  • From Vol. 6 No.20 (Oct. 18, 2017)

    Creating Engaging and Globally Relevant Ethics & Compliance Materials

    Making sure that a work force spread across the globe is familiar with and understands company policies is a major challenge in designing ethics and compliance programs. In a guest article, Rielle Miller Gabriel, ethics officer and the international ethics operations manager for Lockheed Martin, explains how Lockheed creates ethics and compliance materials – including the company’s code of conduct, online training modules and annual ethics training videos – that have global appeal. See “Creating Tomorrow’s Code, Today: Designing an Effective Mobile-First Code of Conduct” (Oct. 4, 2017).

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  • From Vol. 6 No.17 (Sep. 6, 2017)

    Benchmarking Compliance Training With Kim Urbanchuk of Airbus

    Training programs, by their nature, are individualized beasts – each unique to its company. But the people charged with designing, implementing and maintaining those programs need points of comparison to other programs in order to know how well theirs is doing and where there might be room for improvement. The Anti-Corruption Report recently spoke with Kim Urbanchuk, counsel and director of ethics and compliance in the legal and compliance department at Airbus, about her company’s training program and how she benchmarks it against those at other companies. The discussion provides a point of comparison for other companies as well as a roadmap on how best to benchmark their programs. For more insights from in-house experts on training programs, see “Training Insights From In-House Experts (Part One of Two)” (Jun. 1, 2016); and Part Two (Jun. 15, 2016).

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  • From Vol. 6 No.16 (Aug. 16, 2017)

    NAVEX Global Ethics and Compliance Training Survey Offers Benchmarking Data on Compliance Training

    In an era of intense regulatory scrutiny and stretched compliance budgets, understanding the benefits derived from a company’s ethics and compliance training, and how that training stacks up against the company’s peers, can encourage executive and employee buy-in and assist in efficient allocation of resources. In its “2017 E & C Training Benchmark Report,” NAVEX Global offers timely insights from more than 900 compliance, legal and other personnel from a broad range of businesses into the maturity and focus of their E&C training programs, training topics, techniques and goals; budgeting and staffing; and effectiveness metrics. See also “NAVEX Global Offers Benchmarking Data on Hotline and Internal Reporting Mechanisms” (Apr. 26, 2017).

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  • From Vol. 6 No.14 (Jul. 19, 2017)

    One Saudi Company’s Role in Fostering Saudi Arabia’s Anti-Corruption Efforts

    Saudi Arabia’s Council of Ministers has endorsed a sweeping set of programs and reforms to be implemented by 2030 known as Vision 2030. The program includes a plan to improve transparency and combat corruption in all sectors. In a televised interview, Saudi Arabia’s then-Deputy Crown Prince Mohammad bin Salman Al Saud announced that Saudi Arabia will be placed at “the forefront of countries which are combatting corruption and to have the lowest rates of corruption in the world.” In a guest article, Waleed Alghosoon and Danielle Cannata of Saudi Basic Industries Corporation (SABIC) explain how their company is supporting the Saudi Vision 2030 through its internal anti-corruption programs and through capacity building in its Saudi supply chain. See “Regional Risk Spotlight: Riyadh-Based Attorney Robert Thoms Talks Formal and Informal Anti-Corruption Control in Saudi Arabia” (Oct. 26, 2016).

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  • From Vol. 6 No.11 (Jun. 7, 2017)

    Corruption and the Greater Good: NGOs and International Compliance Risk

    Each year, non-governmental and not-for-profit organizations (NGOs) expend billions of dollars in grants and services in countries struggling to combat political corruption and provide adequate public services. Yet, many such organizations systematically underestimate the risk bribery and illicit dealings pose to their overseas operations. In a guest article, Kim Nemirow, a partner at Ropes & Gray, and her associates Andrew O’Connor and David Rojas, identify several key areas of corruption risk for NGOs and outline seven steps that NGOs can take to address these risks allowing them to keep their resources focused on greater goals. See our three-part series on detecting and mitigating corruption risk when participating in public procurements : “Understanding the Procurement Process” (May 13, 2015); “Steps to Take Prior to Entering into a Procurement Process” (May 27, 2015); and “Seven Steps to Take During and After a Procurement Process” (Jun. 10, 2015).

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  • From Vol. 6 No.7 (Apr. 12, 2017)

    Managing Subsidiary Risks: Culture and Communication (Part Two of Three) 

    Recent corporate FCPA settlements with the SEC and DOJ show that foreign subsidiaries continue to be an area of anti-corruption risk for multinational companiesEven if a parent company has a strong compliance culture and accompanying program, failing to integrate that culture with its subsidiaries can lead to problems, as can failing to keep lines of communication open between the parent and its subsidiaries. In this second article in our three-part series on managing subsidiary risk, we look at how companies can make subsidiary employees partners in complianceThe first article in the series discussed how companies can set up their subsidiaries to minimize risk, and the third part will examine the internal controls a company should have in place to prevent corruption at its subsidiaries. See How to Build a Compliant Culture and Stronger Company From the ‘Middle’ (Part One of Three) (Apr. 1, 2015); Part Two (Apr. 15, 2015); Part Three (Apr. 29, 2015). 

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  • From Vol. 6 No.6 (Mar. 29, 2017)

    A Conversation With Jeff Johnson of Cargill About Risk Assessments

    Most practitioners know that anti-corruption risk assessments are crucial to robust compliance programs, and are expected by regulators, but efficient methods of performing these assessments that address business as well as legal and compliance concerns can be elusive. Jeffrey Johnson, compliance lead for anti-bribery, competition and trade sanctions at Cargill, spoke with The FCPA Report about how the company has structured its recent anti-corruption risk assessment, and its approach as it embarks on a global compliance risk assessment. See “Conducting Effective Anti-Corruption Risk Assessments: An Interview With David Simon, Partner at Foley & Lardner” (Nov. 20, 2013); and “An Interview With Kevin Bennett, Managing Director, Forensic and Valuation Services, at Grant Thornton” (Dec. 4, 2013).

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  • From Vol. 5 No.24 (Dec. 7, 2016)

    A Dish of Cream? Some Caviare? Or Strassburg Pie? How to Properly Respond to Bribery Requests  

    “Before a Cat will condescend to treat you as a trusted friend, some little token of esteem is needed, like a dish of cream,” T.S. Eliot wrote in his Book of Practical Cats. Ensuring that an employee properly responds to a bribe request is no easy task because providing the soliciting individual with a “little token of esteem” may be the path of least resistance for employees. In a guest article, Hogan Lovells attorneys Peter Spivack and Rafael Ribeiro discuss how a company can strengthen all aspects of its compliance program to minimize the risk that bribes will be requested and ensure that their employees respond appropriately when they are. For further insights from Hogan Lovells, see “How Companies Can Use Enhanced Auditing Techniques to Address the Government’s Increasing Focus on Internal Controls” (May 13, 2015).

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  • From Vol. 5 No.21 (Oct. 26, 2016)

    Mitigating the Corruption Risk Posed by Vendors in China 

    Some of the more difficult issues for businesses with operations in China arise from the activities of third parties and vendors in that country. The attenuated lines of supervision at many China operations, the lack of transparency in obtaining due diligence information on vendors, the changing and sophisticated nature of corrupt practice schemes, and increased pressure from regulators in the U.S. – and increasingly Chinese and other foreign jurisdictions – all put multinationals at risk. In a guest article, Ronald Cheng, a partner at O’Melveny & Myers based in both Los Angeles and Honk Kong, explains how companies can mitigate these risks while doing business in China. See “The Emperor Is Far Away: The Evolving Nature of Third-Party Risk in China” (Sep. 9, 2015).

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  • From Vol. 5 No.16 (Aug. 10, 2016)

    Managing Corruption Risk When Hiring and Training Foreign Officials and Their Relatives Overseas: Practical Compliance Guidance (Part Two of Two)

    More than a decade after the overseas anti-corruption enforcement boom began, it is clear that the U.S. government is looking to prosecute corruption that takes non-traditional forms. Providing internships, education, gifts, hospitality and entertainment to, or at the request of, government officials can all lead to anti-corruption troubles. For companies operating in the extractive industry, subject to local content laws that require them to provide such opportunities to the local workforce, compliance is key. In a two-part guest article series, Andrew Costa, the general counsel and assistant secretary of the Atlantic Methanol Companies, along with Jeremy Levin, a partner at Baker Botts, and his associate Louie Layrisson, discuss how to overcome overseas hiring and training challenges. The first article distilled insights from U.S. settlements regarding the government’s expectations for hiring practices and training programs. This second article provides guidance on mitigating risks associated with training foreign officials and hiring their relatives. See “Hiring Practices and FCPA Compliance in the Wake of the BNY Settlement (Part One of Two)” (Jan. 13, 2016); Part Two (Jan. 27, 2016).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    Training Insights From In-House Experts (Part Two of Two)

    Training employees on corruption and how to avoid it is a necessary part of an effective compliance program – this is uncontroversial. But deciding what to teach, and how exactly to teach it, is a knottier issue for companies. Should the focus be on explaining the laws or a company’s policies? What are the best approaches to helping employees understand what is expected of them? This second part in The FCPA Report’s series explores how experts from companies such as Walmart International, The Hershey Company, Tyco, Weatherford and Barrick Gold design their training curricula and the pedagogical tools they use to get their message across. The first article in the series discussed which employees should be targeted for training and how companies can ensure that employees complete their training. See also “NAVEX Global Identifies Key Hurdles to Effective Compliance Training and Offers Tips to Overcome Them” (Sep. 9, 2015).

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  • From Vol. 5 No.11 (Jun. 1, 2016)

    Training Insights From In-House Experts (Part One of Two)

    When it comes to anti-corruption training, law firms and vendors provide companies with numerous options – but which models really work? The FCPA Report spoke with a number of in-house counsel with responsibility for, and oversight of, anti-corruption programs at major companies such as Walmart International, The Hershey Company, Tyco, Weatherford and Barrick Gold. They offered insights into the methods and techniques that have been successful in the field, considering their diversified work forces and sometimes-limited budgets. This first article in our two-part series examines who needs to be trained when and how companies can make sure their employees are getting properly trained. The second article will discuss training curricula and the pedagogical tools the in-house experts have found to be successful. See “Twenty Tips for Creating an Effective Training Program” (Oct. 8, 2014).

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  • From Vol. 5 No.11 (Jun. 1, 2016)

    Checklist of Issues to Consider When Implementing a Hiring Practices Policy

    In the past year, the SEC’s settlements with BNY Mellon and Qualcomm have made it clear that, at least in the SEC’s opinion, a job or internship can be a “thing of value” under the FCPA. Hiring the relative of a foreign official in order to curry favor with that official can lead to an FCPA violation. The FCPA Report has put together a checklist a company can use when drafting and implementing policies governing hiring. A company can use this checklist to evaluate the strength of its program and identify areas for improvement. See also “Hiring Practices and FCPA Compliance in the Wake of the BNY Settlement”: Part One (Jan. 13, 2016); Part Two (Jan. 27, 2016).

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  • From Vol. 5 No.7 (Apr. 6, 2016)

    Travel and Entertainment Corruption Risks: Internal Controls to Ensure the Program Is Working (Part Three of Three)

    A strong travel and entertainment policy that clearly delineates between an acceptable business expense and an impermissible bribe is critical to keeping a company out of FCPA trouble. But a policy alone is not enough – a company must also have sufficient internal controls in place to ensure that employees understand and follow company policies. In this final installment of The FCPA Report’s three-part series on travel and entertainment expenses, we explore the controls companies should have in place to keep their travel and entertainment programs working effectively. The first article in the series discussed the hallmarks of an appropriate T&E expense and the second looked at T&E policies. See also “Five Stages of Corruption and Myriad Internal Controls Failures: Compliance Takeaways From the VimpelCom Settlement” (Mar. 9, 2016).

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  • From Vol. 5 No.7 (Apr. 6, 2016)

    Compliance Professionals Share Insights on Revitalizing Codes of Conduct

    A company’s code of conduct is the bedrock of a strong compliance program but it cannot be set in stone. Companies need to reevaluate and periodically update their codes to ensure their relevance. A recent panel discussion at Ethisphere’s 8th Annual Global Ethics Summit looked at the experiences of three large corporations in updating and upgrading their codes of conduct, focusing on the key issues they faced in the process. The program was moderated by Ed Petry, vice president at NAVEX Global, and featured Megan Belcher, vice president and chief counsel at ConAgra Foods, Bettye J. Hill, vice president and chief ethics and compliance officer at Oshkosh Corporation, and Peter Loftspring, assistant general counsel and chief compliance manager at Black & Veatch Corporation. This article summarizes the key takeaways from the program. See also “Customizing Codes of Conduct to Spread the Message of Compliance” (Mar. 4, 2015); and “Six Steps to Revitalize the Company Compliance Code” (Aug. 20, 2014).

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  • From Vol. 5 No.6 (Mar. 23, 2016)

    Twenty Ways a Company Can Use Behavioral Psychology to Improve Compliance

    Compliance resources are never unlimited, but there are ways for compliance personnel to improve the effectiveness of compliance messages at minimal expense. Behavioral psychology can be used to leverage compliance resources and to more effectively encourage people to do the right thing in their jobs, Virginia MacSuibhne, vice president and general counsel of Ventana Medical Systems, explained during a recent Clear Law Institute program. MacSuibhne presented 20 inexpensive, but effective, communication tools that can be used to assure that a compliance message hits home. See also Five Practical Steps for Creating a Compliant Tone in the Middle (Dec. 16, 2015).

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  • From Vol. 5 No.5 (Mar. 9, 2016)

    Developing Key Performance Indicators and Tracking Metrics for an Anti-Corruption Program (Part Two of Two)

    Key Performance Indicators (KPIs) and tracking metrics, regularly used to measure and evaluate the success of a variety of business actors and activities, are increasingly being used to take the temperature of a company’s compliance department as well. A company can use KPIs and metrics to help determine (1) whether its compliance program is being implemented in a robust and good faith manner and (2) whether the elements of the program, and the program itself, are effective in achieving their desired goals. In a two-part guest article series, Jonathan Drimmer, vice president and deputy general counsel at Barrick Gold Corp., and Matthew Herrington, a partner at Steptoe & Johnson, provide a guide for developing and using KPIs and metrics in anti-corruption compliance programs. The first article outlined how to develop and use metrics and KPIs to assess robustness and effectiveness. This second article provides specific examples of KPIs and metrics that can be used to evaluate many of the hallmarks of an effective compliance program, as identified in the DOJ/SEC FCPA Resource Guide.

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    Developing Key Performance Indicators and Tracking Metrics for an Anti-Corruption Program (Part One of Two)

    Key Performance Indicators (KPIs) and tracking metrics are a fact of everyday life for business organizations. Both are tools used to measure and evaluate the success of a wide variety of actors and activities and anti-corruption compliance is no exception. Increasingly, companies and regulatory agencies are relying on metrics and KPIs in judging whether (1) a compliance program is being implemented in a robust and good faith manner; and (2) the elements of the programs, and the program itself, are effective in achieving their desired goals. In this first installment of a two-part guest article series, Jonathan Drimmer, vice president and deputy general counsel at Barrick Gold Corp., and Matthew Herrington, a partner at Steptoe & Johnson, discuss the differences between KPIs and metrics in anti-corruption compliance programs, how metrics and KPIs can be used and relied upon to assess robustness and effectiveness, and how good KPIs and tracking metrics are developed. The second article will give examples of KPIs and tracking metrics that companies might consider for some of the primary elements of anti-corruption compliance programs. See also “Defining, Documenting and Measuring Compliance Program Effectiveness” (Dec. 2, 2015).

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  • From Vol. 5 No.3 (Feb. 10, 2016)

    Kevin Abikoff of Hughes Hubbard Discusses the Benefits and Risks of African Local Content Laws

    Foreign investment in a country has historically been a double-edged sword. While investment may allow elites to prosper, often the benefits do not flow to the general population. In response to this pattern, many countries have adopted “local content laws” that require a certain level of reinvestment by foreign companies into the countries where they operate. While these programs can have clear benefits in terms of technology transfer and local ownership, they can also be a source of corruption risk, as Japanese conglomerate Hitachi learned in 2015 when it was fined $19 million for corruption related to its local partner. The FCPA Report discussed how to navigate these programs when doing business in African countries, where they are prevalent, with Hughes Hubbard partner Kevin Abikoff. He explained why local content laws are beneficial but also how they can lead to corruption, and what companies can do to avoid problems when working with local partners. See “Lack of Training and Due Diligence Leads to $19 Million Penalty for Hitachi” (Oct. 7, 2015).

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  • From Vol. 5 No.2 (Jan. 27, 2016)

    Hiring Practices and FCPA Compliance in the Wake of the BNY Settlement (Part Two of Two)

    Adding to the list of creative ways to accomplish bribery, the SEC’s recent settlement with BNY demonstrated that, at least in the SEC’s opinion, a job can be a “thing of value” that can lead to an FCPA violation. The government made it clear that to avoid such violations, any robust anti-corruption program must integrate policies about hiring practices. Going forward, companies can use the settlement documents as a helpful roadmap for updating their compliance program to meet the SEC’s maturing expectations. The FCPA Report spoke to a number of experts in the field (including the chief compliance officer of a multinational company) who together identified three key aspects of a hiring policy and discussed how companies should be updating their training program. In the first article in this two-article series, we considered the expansion of FCPA liability and its broader implications for FCPA enforcement. See “BNY Mellon Settles Nepotism-Related Charges for $14.8 Million” (Aug. 19, 2015).

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  • From Vol. 5 No.1 (Jan. 13, 2016)

    Experts at GE and LRN Say Think Globally, Act Locally to Build a Stronger Global Compliance Program

    Without a strong corporate culture, leadership and planning, a compliance program can get lost in a miasma of legal and cultural differences. At a recent PLI workshop, Felipe Paez, chief compliance officer of GE Global Research, and Mark Rowe, an ethics, compliance and culture strategist and advisor at LRN, discussed how companies can create (and how GE has created) a global compliance program by thinking globally, acting locally and using codes of conduct and investigations as tools to build an ethical culture and strong world-wide compliance program. See “Google, Boeing, Walmart and PwC Leaders Share Strategies for Overcoming Cultural Hurdles in Compliance” (Apr. 29, 2015).

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  • From Vol. 4 No.23 (Nov. 4, 2015)

    Creating a Values-Based Compliance Code and Recruiting Compliance Champions to Spread the Message

    How can a company create a compliance policy that reflects its core business values?  Once that policy is created, how can a company spread the compliance message effectively across multiple nationalities, languages and countries?  How can it encourage employees to comply with the updated policy?  Accomplishing those goals is no easy task, Dr. Marsha Ershaghi Hames, practice leader in LRN’s education, culture and leadership advisory services department, told The FCPA Report during a recent interview.  Ershaghi Hames discussed how a company should evaluate its current code, how it can spread the message amongst employees, how it can use regional compliance champions to strengthen its messaging and more.  See also “How to Build a Compliant Culture and Stronger Company from the ‘Middle’ (Part One of Three),” The FCPA Report, Vol. 4, No. 7 (Apr. 1, 2015); Part Two, Vol. 4, No. 8 (Apr. 15, 2015); Part Three, Vol. 4, No. 9 (Apr. 29, 2015).

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    Lack of Training and Due Diligence Leads to $19 Million Penalty for Hitachi

    Japanese conglomerate Hitachi has agreed to pay $19 million to resolve the SEC’s claims that it bribed foreign officials to obtain contracts related to two multi-billion dollar construction projects in South Africa.  The settlement highlights the risks companies face when working with local partners and the necessity of thorough, well-documented due diligence and in-country compliance training programs.  Experts also told The FCPA Report that the settlement raises questions as to what level of “corruption” is necessary to incur an FCPA violation and why, in light of other recent SEC actions, cases with similar fact patterns can have wildly divergent outcomes.  See “Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    Eight Ways Compliance Officers Can Build Relationships with the “Middle”

    The much-talked-about “tone at the top” is often cited as crucial for an effective compliance program.  Ensuring that that tone is conveyed throughout the organization, however, is equally important.  Getting the compliance message across typically falls on an organization’s middle managers.  A recent Society of Corporate Compliance & Ethics program featuring Charlotte Nafziger, director of compliance of T-System, Inc., explored the importance of middle management in developing an effective ethics and compliance program and the ways compliance officers can engage middle management in doing so.  See also The FCPA Report’s three-part series, “How to Build a Compliant Culture and Stronger Company from the ‘Middle,’” Part One (Apr. 1, 2015); Part Two (Apr. 15, 2015); and Part Three (Apr. 29, 2015).  

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    “No Money, No Prescription” Attitude in China Leads Bristol-Myers Squibb to $14 Million SEC Penalty

    The SEC has made no secret that it is focused on bribes made by pharmaceutical companies to Chinese health care practitioners, whom it considers foreign officials under the FCPA.  Previous settlements with pharma companies operating in China - such as Eli Lilly, Biomet, Pfizer and Mead Johnson – have focused on the provision of gifts, travel, entertainment or simply cash to Chinese health care practitioners in exchange for prescribing products or getting on government formularies. On October 5, 2015, the SEC announced that it resolved similar charges with pharma giant Bristol-Myers Squibb (BMS) for over $14 million.  The SEC says former BMS employees called their bribes an “open secret” and the only way to meet their sales targets.  We analyze the settlement, a U-turn from the initial investigation into BMS’ activities in Germany, and some of the mistakes BMS made.  See “Ceresney, Focusing on Pharma, Discusses SEC Enforcement Priorities and Compliance Expectations,” The FCPA Report, Vol. 4, No. 6 (Mar. 18, 2015).

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  • From Vol. 4 No.19 (Sep. 23, 2015)

    Regional Risk Spotlight:  Jay Holtmeier of WilmerHale Explains How to Navigate Bureaucratic Corruption Risks in India

    As the world’s second-most populous country, India presents myriad opportunities for foreign companies to sell and manufacture their products.  As an English-speaking nation with a highly educated populace, it has also become a hub for outsourcing services such as customer relations and technical support.  On the other hand, as a legacy of its colonial past, India is highly bureaucratic and companies doing business there face an intricate web of government regulations and licensing requirements, creating corruption risk.  In this installment of The FCPA Report’s Regional Risk Spotlight series, we talk to Jay Holtmeier, a partner at WilmerHale, about how companies can best navigate corruption risks in India and build strong compliance programs while doing business there.  See also “Regional Risk Spotlight:  Thomas Firestone of Baker & McKenzie Explains How to Navigate Corruption Risks in Russia,” The FCPA Report, Vol. 4, No. 16 (Aug. 5, 2015).

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  • From Vol. 4 No.18 (Sep. 9, 2015)

    Thinking Outside the Box: Examining the Growing Trend of Compliance Outsourcing (Part Two of Two)

    Chief compliance officers are regularly being pressured to do more with less.  Many are operating in businesses that are rapidly becoming more complex, both in terms of their global reach and in their use of sophisticated information technology, PwC partner Jerry Stone told The FCPA Report.  At the same time, a CCO faces increasing expectations from global regulators, the board of directors and the C-Suite, all while trying to keep compliance costs low.  To address this myriad of concerns, many companies are outsourcing some or all of their compliance functions to third-party vendors.  In this two-part article series, The FCPA Report examines the outsourcing trend and discusses the benefits and risks of outsourcing various compliance functions.  The first article discussed why a company might outsource some or all of its compliance functions and explored the associated benefits and risks.  This second article looks at how companies are outsourcing various compliance functions and details three steps a company should take before selecting a vendor.  See also “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013); Part Two of Two, Vol. 2, No. 8 (Apr. 17, 2013).

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  • From Vol. 4 No.18 (Sep. 9, 2015)

    NAVEX Global Identifies Key Hurdles to Effective Compliance Training and Offers Tips to Overcome Them

    While compliance personnel think ethical culture is a top priority, their efforts are often hampered by employee cynicism and fractured budgets, according to a new NAVEX Global survey on ethics and compliance training.  The survey’s 677 participants described the current state of their ethics and compliance training and provided useful metrics to use when assessing compliance programs.  We discuss the survey findings and share insights from Ingrid Fredeen, a vice president at NAVEX Global, who discussed the survey’s findings during a NAVEX webinar.  See also The FCPA Report’s FCPA Training That Works series: Navigant’s Joseph Spinelli (Apr. 3, 2013); Weatherford’s Billy Jacobson (Apr. 17, 2013); Manatt, Phelps & Phillips’ Jacqueline C. Wolff (May 1, 2013).

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  • From Vol. 4 No.11 (May 27, 2015)

    Detecting and Mitigating Corruption Risk When Participating in Public Procurements: Steps to Take Prior to Entering into a Procurement Process (Part Two of Three)

    The World Bank estimates that in high-risk countries, public procurement can account for up to 60 to 70 percent of all government expenditures.  As companies continue to expand globally, more view engaging in public procurements as a tremendous growth opportunity.  However, such activity is inherently risky given the necessary interaction with government officials.  How can a company get a slice of the public procurement pie while mitigating bribery risk?  This three-part article series is designed to educate companies on the risks they face when participating in a public procurement process and help provide a framework for an implementable anti-corruption policy relevant to that process.  The first article examined how procurement works and when and how bribery occurs during the procurement process.  This, the second article in the series, details six steps a company should take prior to engaging in a procurement process.  The third article will explore additional actions the company should take during and after the process. 

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    How to Build a Compliant Culture and Stronger Company from the “Middle” (Part Three of Three)

    During the last decade, conversations about a company’s compliance messaging have shifted from a focus on tone at the top to a more holistic approach emphasizing tone at every level of the company.  Today, tone in the middle is a crucial element of effective compliance communications, Jennifer Newstead, a partner at Davis Polk & Wardwell, told The FCPA Report.  This article, the third in a series, details ten actions middle managers can take to spread the compliance gospel and provides strategies for monitoring tone.  The first article discussed who the “middle” actually is, why tone in the middle matters and the challenges of creating a compliant tone.  The second article outlined eight steps companies that are implementing or revamping compliance programs can take to support middle-level compliance messaging.

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Google, Boeing, Walmart and PwC Leaders Share Strategies for Overcoming Cultural Hurdles in Compliance

    Developing and implementing a compliance program that delivers a consistent message while simultaneously conforming to widely varying regional customs is daunting.  At a panel during the recent Global Ethics Summit, hosted by Ethisphere Institute and Thomson Reuters, compliance leaders from Google, Walmart, Boeing and PwC shared their personal experiences with spreading a compliance message in a global company, confessed their cultural blunders and what they learned from them, and outlined five strategies for overcoming cultural challenges.  See “Representing Foreign Companies in Criminal FCPA Actions: Strategies for Handling the Legal, Practical and Cultural Challenges,” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Checklist of FCPA Issues to Consider Before and After Making a Charitable Donation

    Charitable donations can be effective guises for bribes, but can also be perfectly legitimate and benefit whole communities – in a sense, countering the corrosive impact of corruption.  Separating the altruistic payments from the problematic payments that improperly influence a foreign official can be challenging, especially when a foreign official has some connection to the charity.  The FCPA Report has compiled a non-exhaustive list of considerations to help companies formulate policies for smart charitable giving and to encourage good corporate citizenship while avoiding FCPA violations.  See also “Defining the Corruption Risks of Foreign Political Contributions,” The FCPA Report, Vol. 3, No. 18 (Sep. 10, 2014).

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  • From Vol. 4 No.8 (Apr. 15, 2015)

    How to Build a Compliant Culture and Stronger Company from the “Middle” (Part Two of Three)

    Effective compliance initiatives must move beyond the board and C-suite and infiltrate the entire organization.  The key to that infiltration is reaching middle managers who are on the ground with employees.  Fostering a compliant tone in the middle, however, requires coordinated efforts by company leadership and the compliance department.  The FCPA Report’s multi-part series is designed to help companies assess their current culture and strengthen their tone in the middle.  This article, the second in the series, details eight steps companies that are implementing or revamping compliance programs can take to support middle-level compliance messaging.  The first article discussed who the “middle” actually is, why tone in the middle matters and the challenges of creating a compliant tone.  The third article will address actions that middle managers can take to emphasize compliance and strategies for monitoring tone.  See also “Customizing Codes of Conduct to Spread the Message of Compliance,” The FCPA Report, Vol. 4, No. 5 (Mar. 4, 2015).

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  • From Vol. 4 No.8 (Apr. 15, 2015)

    Consero Benchmarking Survey Offers CCO’s Insights on Budgets, Training, Strategy and Third-Party Management

    “Chief compliance officers seem pleased with the variety and sophistication of new resources available to support their efforts, but they are troubled by the speed at which the global economy is changing, and the increasing complexity of the compliance environment,” Paul Mandell, Founder and CEO of Consero Group, LLC told The FCPA Report, drawing on the findings from his firm’s 2015 Corporate Compliance & Ethics Data Survey.  In the Survey, developed in connection with Consero’s Fall 2014 Corporate Compliance and Ethics Forums in the U.S. and U.K., senior compliance executives offered information on their budgets, the effectiveness of their training, their confidence in their third-party management and other topics.  See also “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013); Part Two of Two, Vol. 2, No. 8 (Apr. 17, 2013). 

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  • From Vol. 3 No.20 (Oct. 8, 2014)

    Twenty Tips for Creating an Effective Training Program

    Anti-corruption enforcement agencies have made it clear that training is a foundational part of a compliance program.  How can companies effectively and efficiently implement such training programs?  At the Society of Corporate Compliance and Ethics’ 2014 Compliance and Ethics Institute, compliance staff from The Nature Conservancy (TNC), one of America’s largest environmental non-profits which employees 3,700 individuals operating in 35 different countries, shared practical tips and tricks for running an effective training program before, during and after training is conducted.  Using TNC’s program as an example, Charlotte Young, TNC’s Chief Ethics and Compliance Officer and Grace Wu de Plaza, TNC’s Deputy Ethics and Compliance Officer, provided their top training strategies.  See “Seven Practical Tips for Enhancing Anti-Corruption Training and Four Ways to Measure Its Effectiveness,” The FCPA Report, Vol. 3, No. 18 (Sep. 10, 2014).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Seven Practical Tips for Enhancing Anti-Corruption Training and Four Ways to Measure Its Effectiveness

    A robust training program is one of the pillars of an effective compliance program.  During a panel at Practising Law Institute’s Corporate Compliance and Ethics Institute, compliance experts outlined seven rules for creating such a program and discussed four strategies for measuring program effectiveness.  The panelists included Janice Innis-Thompson, Senior Managing Director and Chief Compliance and Ethics Officer at TIAA-CREF; Edward Petry, VP of the Ethical Leadership Group advisory services division of Navex Global; and Rebecca Walker, a partner at Kaplan & Walker LLP.  See also The FCPA Report’s FCPA Training That Works series: Navigant’s Joseph Spinelli (Apr. 3, 2013); Weatherford’s Billy Jacobson (Apr. 17, 2013); Manatt Phelps & Phillips’ Jacqueline C. Wolff (May 1, 2013).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Mitigating Bribery Risks Using Financial Controls, Risk Assessments and Leveraging Internal Resources

    A recent program presented by The Knowledge Group brought together experts from investigative and consulting firm Kroll, law firm Alston & Bird and defense company Leidos to discuss best practices in mitigating FCPA risk.  The panelists analyzed the current enforcement climate and shared how they have structured and implemented systems at their companies for financial controls, risk assessments and the vetting of third parties, including how they leverage existing resources to enhance their compliance programs.  They also highlighted compliance lessons from recent Kroll global fraud surveys.  See also “Kroll Managing Director Extracts Practical Lessons from 2013 Anti-Bribery and Corruption Benchmarking Survey,” The FCPA Report, Vol. 2, No. 13 (Jun. 26, 2013).

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  • From Vol. 3 No.10 (May 14, 2014)

    The FCPA Report, MoloLamken and The Hedge Fund Law Report to Present Panel Discussion of FCPA Risks for Hedge Funds and Private Equity Firms on June 3

    Hedge funds and private equity firms have found themselves increasingly in the government’s FCPA crosshairs.  The FCPA Report, along with The Hedge Fund Law Report and MoloLamken, will sponsor a complimentary panel discussion on Tuesday, June 3, 2014, to discuss risks and strategies regarding recent governmental actions targeting the financial services industry.  MoloLamken partner Andrew DeVooght will give a legal update and his fellow partner Justin Shur will moderate a panel featuring Seward & Kissell partner Rita Glavin; Brian Guzman, General Counsel at Indus Capital; Stuart Barkoff, General Counsel at Global Environment Fund; and Barry O’Connell, of the SEC’s New York Enforcement Division, who recently worked on the Total case. The discussion will begin at 5:00 p.m. and will be followed by a cocktail reception at 6:30 p.m. at the CORE: Club, 66 East 55th Street in Manhattan.  Space is limited.  To register for the event, please e-mail your contact information to Rsvp@fcpareport.com.   A copy of the invitation is here.

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    A Guide to Detecting and Preventing Expense-Reimbursement Fraud (Part One of Three)

    Employee expense reports can be prime vehicles for bribery schemes, and failing to maintain adequate controls over such reports can put a company in serious FCPA jeopardy.  Employees can manipulate, and have manipulated, expense reports in order to provide improper benefits to government officials in the form of gifts, hospitality or charitable contributions – or simply to generate pools of cash from which employees can pay bribes.  Implementing a risk-based expenditures program, defining appropriate expense limits and training employees can help to limit a company’s risk.  Such policies “help to set the framework for employees regarding company expectations for compliance and ethical business practices,” said Tara Giunta, a partner at Paul Hastings.  The FCPA Report is publishing a three-part series to help companies identify and prevent expense-report fraud.  The series will provide advice from FCPA experts regarding: spotting expense-report fraud, setting appropriate expense-report policies, monitoring expense reports and addressing anti-corruption issues raised by the monitoring process.  This, the first article in the series, will discuss the risks associated with expense reports; provide advice on using travel and entertainment policies to limit expense-report fraud; and provide strategies for utilizing the training process to decrease expense-report fraud.  See also “Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations,” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).

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  • From Vol. 3 No.3 (Feb. 5, 2014)

    Creating Efficiency in Legal and Compliance Departments: An Interview with Varun Mehta, Vice President at Clutch Group

    More than two-thirds of compliance officers say they don’t have enough resources to develop and implement sufficient compliance programs.  The complaints are, in part, prompted by the growing volume of data that companies produce and handle as well as the increasingly complex regulatory landscape.  When it comes to anti-corruption compliance, in-house departments must create and maintain programs effective at preventing, detecting and remediating FCPA violations all while minimizing costs to the company.  The stakes are high – a company that fails to maintain an adequate program can find itself at a disadvantage if a violation does occur, while an effective program can earn the company credit with the government.  The FCPA Report recently spoke with Varun Mehta, Vice President of Legal and Compliance Solutions at Clutch Group, about ways companies can identify and address inefficiencies in their legal and compliance departments, including handling data before and during an investigation, choosing automated software programs, structuring reporting lines, conducting risk assessments and performing due diligence on third parties.  See also “Conducting Effective Anti-Corruption Risk Assessments: An Interview with Kevin Bennett, Managing Director, Forensic and Valuation Services, Grant Thornton LLP,” The FCPA Report, Vol. 2, No. 24 (Dec. 4, 2014).

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  • From Vol. 2 No.24 (Dec. 4, 2013)

    Lessons on Effective Compliance Training and Communications from Compliance Directors at Microsoft and Genesys

    Communication and training are key aspects of an effective anti-corruption compliance program; without them, even a carefully thought-out compliance program is simply words on a page.  A recent Practising Law Institute program drew on the extensive practical experience of compliance directors at Microsoft and Genesys, who spoke about the strategies they use to assure that their employees, and the third parties with which their companies do business, are properly trained and about how they assess the effectiveness of their training.  See also “How To Keep Employees Engaged and Invested in an Anti-Corruption Compliance Program,” The FCPA Report, Vol. 2, No. 14 (Jul. 10, 2013); and “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 2 No.23 (Nov. 20, 2013)

    Six Steps to Reduce Third-Party Anti-Corruption Risk

    A central theme running through many recent FCPA enforcement actions is the involvement of third parties in illegal activities.  The role third parties play (whether agents, resellers, distributors, subcontractors or consultants) make them the ideal facilitators for the transfer of funds, and companies can be liable for the bribes those third parties make.  Some companies may think they have it covered with a “no FCPA violations” clause and audit rights in the contract.  In today’s climate, however, that is simply not enough, nor is a “notice” in a partner program or guide that requires that the partner be familiar with the FCPA or U.K. Bribery Act.  Companies need a comprehensive approach to third-party risk reduction that includes more than just due diligence, but also risk assessments, training, business justification and monitoring.  This guest article by Farzad Barkhordari, CEO of Click 4 Compliance, discusses the dangers of doing business with third parties and outlines steps companies should take when engaging third parties, including examples of how the steps can be implemented in common scenarios.

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  • From Vol. 2 No.20 (Oct. 9, 2013)

    Ernst & Young’s 2013 Asia-Pacific Fraud Survey Highlights Disconnect Between Company Policies and Employee Perceptions

    The Asia-Pacific region is an enticing one for companies around the world, with its enormous markets, resources and opportunities.  But there is also significant corruption risk in the region, and that risk may be increasing.  In an extensive recent survey of fraud and corruption in eight APAC countries, Ernst & Young found that “fraudulent practices are on the rise” in APAC nations, and businesses operating there face heightened corruption risk due to weak controls and a weakening economic environment, which is leading businesses to take shortcuts.  EY interviewed employees of large corporations to gauge their perspectives on the extent of corruption in their respective countries and on the effectiveness of various anti-corruption controls.  For a global perspective from EY, see “Ernst & Young’s 2012 Global Fraud Survey Highlights Significant Challenges in Dealing with Corruption and Bribery Risks,” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).

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  • From Vol. 2 No.20 (Oct. 9, 2013)

    Survey Reveals the Contours and Content of Bribery in the U.K. Construction Industry

    Forty-nine percent of U.K. construction professionals believe that corruption is common within the U.K. construction industry, a decrease of 2% since 2006.  That was one of the key findings of a survey conducted and published in September by the Chartered Institute of Building (CIOB), the world’s largest professional body for construction management and leadership.  CIOB’s findings indicate several potential reasons for those levels of corruption.  The majority of construction professionals who believe that corruption is a problem in the U.K. cited economic issues as the primary reason for this phenomenon.

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Anti-Corruption Professionals from GE, Abbott Laboratories and Navistar Share Proven Strategies on Third-Party Due Diligence, M&A, Training, Nepotism and Regional Risk

    Anti-corruption compliance can feel like a battlefield, with potential landmines at every turn.  But what do practicing in-house compliance professionals view as their biggest challenges?  What issues keep them up at night?  And, most importantly, what have they done to address those issues?  In a panel hosted by the American Conference Institute, three in-house compliance experts shared their practical experience.  They discussed specific challenges they have faced and outlined the strategies they used to effectively address those challenges.  The expert panelists included Matthew Hsu, Senior Counsel, Global Fraud and Anti-Corruption at Abbott Laboratories; Shannon Masson, Senior Counsel at Navistar, Inc.; and Kevin Matthews, Associate General Counsel at GE Oil and Gas.  See also “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 2 No.16 (Aug. 7, 2013)

    Dechert Produces Movie to Assist in FCPA and Corporate Governance Training

    The board of directors of a beleaguered company faces a vote on whether to acquire a new company with promise, and risk, in an emerging market.  It’s a serious, high-stakes situation faced by many boards.  It is the subject of many papers and seminars.  And it’s even the subject of training sessions in various media – but, Dechert LLP says, there has never been a training video like this.

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  • From Vol. 2 No.14 (Jul. 10, 2013)

    How To Keep Employees Engaged and Invested in an Anti-Corruption Compliance Program

    No matter how robust a compliance program is on paper, if employees do not understand the importance of compliance or are not actively participating in protecting the company, the program’s success will be limited.  Amplifying the challenge of maintaining a successful program is the reality that most corporate employees must be educated not only about anti-corruption compliance, but also about other ethical and compliance issues.  Companies attempting to spread the compliance gospel run the risk of over-communicating and losing the attention of their target audience.  In today’s complex regulatory environment, how can a company keep its employees actively engaged in its anti-corruption compliance program?  This article shares insights and strategies from in-house counsel for fostering employee interest in compliance.  See also “Comprehensive FCPA Guidance Provides a Roadmap for Companies to Reevaluate and Revise Their Compliance Policies,” The FCPA Report, Vol. 1. No. 13 (Nov. 28, 2012).

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    U.S. Attorney Loretta Lynch Discusses Morgan Stanley, Ralph Lauren and the Government’s View on Compliance Programs, Self-Reporting, Monitors and More

    Every year, multi-national companies spend great sums on anti-corruption compliance.  By building robust compliance programs, companies seek to decrease corruption and also to limit company liability if bribery occurs.  However, many companies struggle with not only creating and maintaining an effective compliance program, but also communicating that program to the government if there is a problem.  At a recent conference hosted by the Society of Corporate Compliance and Ethics, Loretta Lynch, U.S. Attorney for the Eastern District of New York, shared a prosecutor’s perspective on corporate compliance programs.  Lynch also provided insight into the government’s position on employee discipline, training, self-reporting and corporate monitorship, along with specific discussions of the Ralph Lauren and Morgan Stanley cases.  See also “Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012); “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    Kroll Managing Director Extracts Practical Lessons from 2013 Anti-Bribery and Corruption Benchmarking Survey

    Forty seven percent of companies don’t train their third parties.  That was one of the key findings of a recent benchmarking survey released by Kroll and Compliance Week.  The companies asked more than 300 executives from companies with a median annual revenue of $3.5 billion and a median of more than 9,600 employees about their risks, resources and compliance programs.  The FCPA Report talked to Lonnie Keene, a Managing Director at Kroll, about the practical implications of the survey results, and what specific actions companies should take in response to the results.  For a discussion of additional benchmarking data from Kroll, see “Kroll Benchmarking Report Surveys State of FCPA Compliance at U.S. Multinationals,” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).

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  • From Vol. 2 No.11 (May 29, 2013)

    Designing and Implementing Effective Press and Social Media Policies to Mitigate Reputational Harm from Anti-Corruption Investigations

    Press coverage about corruption – or, more likely, alleged corruption – can ignite a string of detrimental events at a company, starting with considerable reputational damage.  When the press, on one of its myriad platforms, picks up a story about corruption, that story can go viral very quickly.  Complicating matters, it is not just the press that can set these events in motion, but anyone with a Twitter account, Facebook page or blog.  Faced with media attention, a company’s options can be suddenly constrained – it may be forced to self-report to the government before it is ready, and must handle all the repercussions of such reporting, all while trying to preserve its relationship and status with its customers, clients and partners.  See “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).  A comprehensive media strategy is crucial.  A recent panel at the American Bar Association’s Fifth Annual National Institute on Internal Corporate Investigations and Forum for In-house Counsel addressed strategies for handling the press and social media.  Industry experts shared their considerable experience handling media issues and provided practical, step-by-step advice for handling a public relations crisis.

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  • From Vol. 2 No.9 (May 1, 2013)

    FCPA Training That Works: An Interview with Jacqueline C. Wolff, Co-Chair of the Corporate Investigations & White Collar Defense Practice at Manatt, Phelps & Phillips, LLP

    This is the third article in our ongoing series on FCPA and anti-corruption training.  Each of the articles in the series is based on a long-form interview with a thought leader from a different discipline.  Collectively, the articles in this series provide a deep and multidisciplinary view of one of the most important processes available to companies to mitigate FCPA risk.  Our goal in this series is to provide actionable insight – recommendations, best practices and specific techniques that companies can use to improve the effectiveness of their training programs.  To advance that goal, this installment includes our interview with Jacqueline C. Wolff, a Partner at Manatt, Phelps & Phillips, LLP, Co-Chair of Manatt’s Corporate Investigations & White Collar Defense practice and former Chief of the Environmental Crimes Unit and Assistant United States Attorney for the District of New Jersey.  Our interview with Wolff delved deeply into a wide range of relevant topics, including: special considerations applicable to training different categories of employees; when to train third parties; the role of outside counsel in training; the interaction between attorney-client privilege issues and candor during training; the risks of online training; appropriate training frequency; the role of hypotheticals; minimizing cost without sacrificing effectiveness; and training lessons from the November 2012 Guidance.  The prior installment in this series included our interview with Billy Jacobson, Senior Vice President, Co-General Counsel and Chief Compliance Officer of Weatherford International, the global oil and natural gas services company.  See “FCPA Training That Works: An Interview with Billy Jacobson, Chief Compliance Officer of Weatherford International,” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).  And the first installment in the series included our interview with Joseph Spinelli, the head of Navigant’s FCPA practice and former Inspector General of New York State.  See “FCPA Training That Works: An Interview with Joseph Spinelli, Global Leader of Navigant’s Anti-Bribery & Corruption-FCPA Segment,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.9 (May 1, 2013)

    SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting

    While implementing an enhanced FCPA compliance program in 2010, Ralph Lauren Corporation (RLC) unearthed a multi-year bribery scheme perpetrated through its Argentine subsidiary, P.R.L.-S.R.L.  RLC reported its findings to the SEC and DOJ within two weeks and cooperated fully with their subsequent investigations.  As a result, the SEC entered into its first-ever non-prosecution agreement (NPA) with RLC.  Simultaneously, the DOJ entered into a separate NPA with RLC.  RLC has agreed to pay aggregate disgorgement, interest and penalties of over $1.6 million, to cooperate further with the SEC and DOJ, to enhance its compliance program and take further remedial measures and to report back to the DOJ for two years.  This article summarizes the terms of those agreements which, among other things, evidence the potential benefits for companies that self-police, self-report and cooperate fully with the SEC and DOJ.  See also “SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.8 (Apr. 17, 2013)

    Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part Two of Two)

    A highly qualified chief compliance officer (CCO) is necessary but not sufficient to implement and enforce a best-in-class FCPA compliance program.  In addition to being inherently capable, that CCO also must be empowered.  Even the best CCOs need certain tools to perform effectively in an FCPA compliance role; absent such tools, the work of otherwise effective CCOs can be dangerously undermined.  Unfortunately, studies have consistently shown that when it comes to FCPA compliance, CCOs feel under-resourced, overworked and not as impactful as they can and should be.  How can companies bridge the divide between their FCPA compliance aspirations and the reality of insufficiently empowered CCOs?  This is the second article in a two-part series designed to address this fundamental question.  Fortunately for companies, the most productive answer does not involve throwing more money at the problem, but rather rethinking the solution.  In particular, through a series of conversations with high-level sources with direct experience on this challenging topic, we have identified five essential tools that a CCO needs to do effective FCPA compliance.  Those tools include an appropriate title and actual authority, direct access to the board and management, sufficient budget and resources, a bona fide culture of compliance and an incentive structure that reinforces the culture.  The first article in this series addressed the first three tools – see “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013) – and this article addresses the last two.  Notably, this article gives content and structure to the elusive but all-important concept of a culture of compliance.

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  • From Vol. 2 No.8 (Apr. 17, 2013)

    FCPA Training That Works: An Interview with Billy Jacobson, Chief Compliance Officer of Weatherford International

    Creating and deploying best-in-class training is a fundamental aspect of maintaining a successful anti-corruption compliance program, and a robust training program can be a powerful defense if the SEC or DOJ finds a “rogue employee.”  But training is inherently limited – training sessions cannot cover the full range of anti-corruption situations an employee may face across geographies, and the sessions themselves are limited by time and cost.  How can a company maximize the impact of this important activity?  To answer this and related questions, The FCPA Report is undertaking a series of interviews on FCPA training with experts from different disciplines.  This article – the second installment in the series – includes our interview with Billy Jacobson, Senior Vice President, Co-General Counsel and Chief Compliance Officer of Weatherford International, one of the largest oil and natural gas service companies, operating in 100 countries.  Prior to his association with Weatherford, Jacobson served as a federal prosecutor for the Fraud Section of the U.S. Department of Justice’s Criminal Division, where he served in various positions, including as Assistant Chief for FCPA Enforcement.  He has also been in private practice as a partner at Fulbright & Jaworski L.L.P.  In the first installment of this series, The FCPA Report spoke with Joseph Spinelli, the head of Navigant’s FCPA practice and former Inspector General of New York State.  See “FCPA Training That Works: An Interview with Joseph Spinelli, Global Leader of Navigant’s Anti-Bribery & Corruption-FCPA Segment,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    FCPA Training That Works: An Interview with Joseph Spinelli, Global Leader of Navigant’s Anti-Bribery & Corruption-FCPA Segment

    Designing and implementing a workable and customized FCPA training program is a foundational challenge in anti-corruption compliance for all companies doing business internationally.  As the FCPA Resource Guide says, “Compliance policies cannot work unless effectively communicated throughout a company.”  As a practical matter, training is the primary channel through which companies communicate their culture of FCPA compliance and specific compliance strategies.  Done right, training is one of the most effective bulwarks against FCPA violations.  But how can companies do training right?  To answer this question, The FCPA Report is undertaking a series of interviews with experts that approach the same topic (FCPA training) from different disciplines.  This article – the first installment in that series – includes our interview with Joseph Spinelli, a Managing Director in Navigant’s Global Investigations and Compliance practice and the global leader of Navigant’s Anti-Bribery & Corruption-FCPA segment.  Spinelli has more than 30 years of forensic experience, founded the forensic practice at a Big Four accounting firm and has served in various monitorships.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Three of Three),” The FCPA Report, Vol. 2, No. 6 (Mar. 20, 2013).  Spinelli shared his views not only on how to make a training program effective in preventing bribery, but also on how to ensure the company receives maximum credit when the government is evaluating its training program.  He addressed, among other things: training third parties; which employees should be trained; specialized training for different industries; the relative merits of different technologies for training employees; training challenges, including facilitation payments; and effective training methods.

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  • From Vol. 2 No.4 (Feb. 20, 2013)

    Six Steps for Converting a “Paper” FCPA Compliance Program into a Pervasive Culture of Anti-Bribery Compliance (Part One of Two)

    Recent enforcement actions have highlighted the bribery risk inherent in retaining third parties in foreign countries.  To adequately address such risks, companies need more than a compliance manual sitting on the shelf – they need a culture of compliance that pervades the organization.  Drafting a thorough and customized compliance manual is the first step in this process.  But how can companies bring a complete compliance program to life?  A recent webinar tackled this hard question head on, incorporating the long and relevant experience of the webinar participants, as well as lessons from the recently-issued FCPA Guidance.  This is the first article in a two-part series summarizing the key takeaways from the webinar.  This article discusses: how the hypotheticals in the Guidance provide insight into the government’s enforcement strategy and what the “flavor of the month” FCPA cases are; six ways to ensure an FCPA compliance program is best-in-class; and integral steps to take when conducting risk assessments of third parties.  The second article will address: steps to take after a risk score is assigned to a third party, including details about a “boots-on-the-ground” approach; ways to monitor third parties on an ongoing basis; compliance advice for smaller companies; and how to incentivize employees to report complaints internally before going to the government.  See also “Five Themes for General Counsel to Monitor with Respect to Dodd-Frank Whistleblowers and the FCPA,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

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  • From Vol. 1 No.10 (Oct. 17, 2012)

    Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations

    In April 2012, Morgan Stanley Managing Director Garth Peterson pleaded guilty to one count of conspiring to circumvent Morgan Stanley’s internal controls in violation of the FCPA.  The plea was the result of his efforts to enrich himself and the Chinese official who facilitated a Shanghai real estate deal with his Morgan Stanley unit.  Notably, the DOJ indicated that it was declining to bring charges against Morgan Stanley as a result of Peterson’s misconduct.  In a recent webcast, Morgan Stanley’s anti-corruption chief, Raja Chatterjee, and its outside counsel from Davis Polk & Wardwell LLP, discussed the “unprecedented and important” decision not to prosecute Morgan Stanley for Peterson’s FCPA violations.  They believe that, by declining to prosecute Morgan Stanley, the DOJ has made a statement that “compliance matters” and that an effective compliance program can be a mitigating factor in an FCPA investigation.  This article summarizes the webcast with a view to identifying the lessons that can be learned from the Morgan Stanley matter.  See also “Civil and Criminal Enforcement Actions Against Former Morgan Stanley Employee Highlight the Relevance of the FCPA for Private Fund Managers,” The Hedge Fund Law Report, Vol. 5, No. 19 (May 10, 2012).

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  • From Vol. 1 No.9 (Oct. 3, 2012)

    Anti-Corruption Compliance in the Age of Global Enforcement

    A global wave of anti-corruption regulation has been steadily gaining momentum since it began in the 1990s.  International organizations, such as the Organisation for Economic Co-operation and Development, have set their sights on fighting bribery and have successfully pressured member states to pass tighter laws.  Cross-border enforcement cooperation is also on the rise.  This heightened scrutiny has highlighted the importance for corporations to have globally effective anti-corruption compliance programs.  Successful programs help reduce the risk of violations and may also engender a more favorable regulatory response when issues arise.  In a guest article, Richard Sibery, the Leader for Fraud and Investigations with Ernst & Young LLP’s Fraud Investigation & Dispute Services (FIDS) practice, and Virginia Adams, a Senior Manager in E&Y’s FIDS practice, discuss the three basic building blocks of a best-of-breed compliance program.  For additional insight from Sibery, see “Training, Certification, Due Diligence, Customs Clearance and Facilitation Payments: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); and “Anti-Corruption Audits, Risk Assessments, Transaction Testing and the Dangers of Petty Cash: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).

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  • From Vol. 1 No.6 (Aug. 22, 2012)

    Identifying and Mitigating Anti-Bribery Risk in Journalism and Newsgathering

    “[I]t’s one of the Commandments of Good Journalism: Thou shalt not pay for information.  Only the tabloids, of both the supermarket and TV variety, regard news as a tradable commodity,” according to an article in the American Journalism Review.  Unfortunately, those Commandments are not always followed.  Generally, journalists pride themselves on not paying or giving favors for interviews or access to information.  But sometimes journalists feel pressured to do so.  When they do, such actions may not just implicate journalistic ethics, but the FCPA and laws like it, with harsh consequences such as penalties, disgorgement of profit (perhaps advertising revenue) and possible loss of FCC licenses.  Bribery in journalism may work the other way too.  It can be the journalists – foreign officials in many countries where the media is state-owned – taking the bribe from companies who want media coverage, creating liability for non-media companies.  Corruption in newsgathering may not be intuitive, and in today’s competitive media environment, it can be difficult to prevent.  This article examines (with expert input from Dan Rather and others) corruption risks newsgathering can pose; situations where journalists and their employers can, and have, faced potential FCPA violations; compliance policies companies have implemented; and seven measures media companies can take to improve their compliance programs and mitigate corruption risk.

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  • From Vol. 1 No.5 (Aug. 8, 2012)

    Designing a Facilitation Payments Policy to Minimize Liability and Retain Flexibility (Part Two of Two)

    Facilitation payments – payments to foreign officials that facilitate or expedite routine tasks – remain “legal bribes” under the FCPA.  Facilitation payments can be advantageous in many circumstances, and sometimes even essential to the safety of a company’s workers or the viability of its ongoing operations.  But such payments are prohibited under other foreign bribery laws, and they are nearly universally prohibited as payments to domestic officials under local laws.  Companies have struggled to strike the right balance between business flexibility and legal compliance.  Many companies have banned facilitation payments outright, but doing so can unduly limit a company’s ability to act quickly and decisively, which can be crippling in competitive markets.  On the other hand, too lax an approach to facilitation payments invites enforcement actions and reputational harm.  To assist our subscribers in designing policies, procedures and practices that balance compliance considerations with the need to retain business agility, we are publishing this second article in a two-part series.  This article addresses: advisable “safety valves” or exceptions to a general ban on facilitation payments; drafting and implementing a facilitation payments policy to accommodate those exceptions and avoid liability; concerns relating to the all-important issue of properly recording facilitation payments; and seven specific steps that companies should take in designing training programs relating to facilitation payments.  The first article in this series discussed: the definition of a facilitation payment, including examples; the differing treatment of such payments under the FCPA and other laws, notably the U.K. Bribery Act; the tension that has resulted from the conflict of laws; cases in which the argument has been made that the payments in question were facilitation payments, including the Wal-Mart investigation; and the trend among companies toward banning facilitation payments outright.  See “Designing a Facilitation Payments Policy to Minimize Liability and Retain Flexibility (Part One of Two),” The FCPA Report, Vol. 1, No. 4 (Jul. 25, 2012).

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  • From Vol. 1 No.2 (Jun. 20, 2012)

    Anti-Corruption Audits, Risk Assessments, Transaction Testing and the Dangers of Petty Cash: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice

    This article includes the second part of The FCPA Report’s in-depth interview with Brian Loughman and Richard Sibery, leaders of the Fraud Investigation and Dispute Services Practice at Ernst and Young LLP (E&Y).  Our interview focused on the critical decision points for global companies confronting anti-bribery issues when operating abroad.  We covered a lot of ground and, in the process, conveyed much of the key substance of the recent book by Loughman and Sibery, Bribery and Corruption: Navigating the Global Risks (Wiley 2012).  In light of its length and depth, we have published our interview as a two-part series.  This second part covers topics including: the dangers of petty cash; the nuts and bolts of transaction testing; FCPA-specific due diligence considerations for mergers and acquisitions; whether a company should combine an anti-corruption audit with a general audit; and best interviewing and communication techniques.  The first part of the interview dealt with the challenges of designing an effective FCPA training program, techniques of effective third party due diligence and risk assessments and other actionable topics.  See “Training, Certification, Due Diligence, Customs Clearance and Facilitation Payments: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).

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  • From Vol. 1 No.1 (Jun. 6, 2012)

    Training, Certification, Due Diligence, Customs Clearance and Facilitation Payments: An Interview with Leaders of Ernst & Young’s Fraud Investigation & Dispute Services Practice

    Brian Loughman is the Americas Leader of the Fraud Investigation & Dispute Services Practice at Ernst & Young LLP (E&Y), and Richard Sibery leads E&Y’s Fraud & Investigations Group within the Fraud Investigation & Dispute Services Practice.  In those roles, Loughman and Sibery have amassed deep, detailed and current experience with global anti-bribery investigations and remediation – the sort of practical know-how that only comes with extensive, on-the-ground experience.  The FCPA Report recently had the privilege of conducting a wide-ranging interview with Loughman and Sibery.  The general intent of the interview was to identify the most pressing anti-bribery issues facing global companies and specific strategies for addressing those issues.  In this sense, our interview sought to paraphrase some of the more important points made in the book recently written by Loughman and Sibery, Bribery and Corruption: Navigating the Global Risks (Wiley, 2012).  In particular, our interview covered: the challenges of designing an effective FCPA training program; the utility of certification programs; techniques of effective third party due diligence and risk assessments; issues surrounding customs payments, including the difficult issue of facilitation payments; the dangers of petty cash; the nuts and bolts of transaction testing; why M&A transactions pose unique due diligence challenges; whether an anti-corruption audit and a general audit plausibly may be combined; and best practices for interviewing and communications.  We are publishing the full transcript of our interview with Loughman and Sibery in two parts: the first part is included in this issue of The FCPA Report and the second part will be included in the next issue.

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