The Anti-Corruption Report

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

Articles By Topic

By Topic: Risk Assessments

  • From Vol. 7 No.3 (Feb. 7, 2018)

    How to Conduct Anti-Corruption Risk Assessments that Comply With the FCPA and the U.K. Bribery Act

    At a time when the Trump administration seems to have affirmed its commitment to FCPA enforcement in the DOJ’s new FCPA Corporate Enforcement Policy, and with a U.K. Bribery Act that extends to areas that even the FCPA does not (including commercial bribery, domestic as well as foreign transgressions and facilitation payments), companies subject to both statutes must make sure that their anti-corruption risk assessments will pass muster in both jurisdictions. In a recent discussion during a Strafford panel, Nossaman partner Edward Fishman and John Wood, a partner at Hughes Hubbard, shared the details of how to conduct risk assessments that are both reasonably designed and meaningful. See also “DOJ’s FCPA Corporate Enforcement Policy: What’s New and What’s Not (Part One of Two)” (Jan. 10, 2018).

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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.12 (Jun. 21, 2017)

    Channeling the Channel-Partner Risk: Addressing Anti-Corruption Risk with Channel Partners in the Technology Sector

    In the software and hardware businesses, the use of channel partners – entities that pair with manufacturers to market and sell products, services and technology – often presents unique compliance challenges. To assist with navigating these risks, Nicola T. Hanna and Michael M. Farhang, partners at Gibson Dunn, along with associates Pedro G. Soto and Caitlin S. Peters, explore some of the recent enforcement actions in the software and hardware sector, identify the principal themes in those actions and propose best compliance practices. See “Excessive Power for Junior Employees and Lavish Trips for Foreign Officials Lead to $28 Million PTC Settlement” (Feb. 24, 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.10 (May 24, 2017)

    In-House Perspectives on Third-Party Due Diligence: Right-Sizing and Risk Ranking (Part One of Three)

    The last several years of FCPA enforcement and government messaging have proven to even the most skeptical that an effective third-party due diligence program is a necessary part of any multinational business. Despite, or perhaps because of, a wealth of information on the topic, many companies still struggle with how to create and maintain such a program. To assist companies in benchmarking and enhancing their third-party diligence programs, The FCPA Report spoke with in-house compliance professionals hailing from a wide range of companies operating in a variety of industries, including experts from BDP International, NBCUniversal, Public Interest Registry and TE Connectivity. 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.8 (Apr. 26, 2017)

    Managing Subsidiary Risks: Internal Controls (Part Three of Three)

    While subsidiaries continue to be a major source of corruption risk, parent companies have several tools at their disposal to mitigate that risk. This final article in our three-part Managing Subsidiary Risks series explores some of the strongest tools and controls – internal and financial – available to a parent company to prevent corruption at its subsidiaries. The first article discussed what steps companies can take when setting up new subsidiaries, either from scratch or through the acquisition of an existing company, to limit corruption risk and the second part of the series addressed leveraging strong communication and a culture of compliance. See “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017).

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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. 6 No.5 (Mar. 15, 2017)

    DOJ’s Guidance Shows That Compliance Programs Still Matter

    Critical comments of the FCPA by President Trump, coupled with a general policy position of lessening regulatory oversight of U.S. companies, have caused speculation as to whether the new administration will curtail FCPA enforcement. Recently, the DOJ Fraud Section quietly released this administration’s first guidance setting out its position on the contours of an effective corporate compliance program. In a guest article, Paul Hastings partners Tara Giunta and Palmina Fava, and their associate Brian Wilmot, explain that this guidance does not signal any easing of enforcement – rather, the Fraud Section is signaling an incisive review of companies and their compliance programs, functions, resources and effectiveness. See “Top FCPA Officials Encourage Strong Compliance Programs and Remediation, the Defense Bar Responds” (Dec. 21, 2016).

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  • From Vol. 6 No.1 (Jan. 18, 2017)

    Attorney-Consultant Privilege? Structuring and Implementing the Kovel Arrangement (Part Two of Two)

    So-called “Kovel arrangements” provide unique opportunities for companies and their legal counsel to extend the attorney-client privilege to consultants, such as those performing anti-corruption investigations or audits. After deciding to use the arrangement, the next (and most important) step is ensuring that the entire Kovel engagement is performed correctly so that the privilege will be recognized by regulators and courts, and documents detailing the company’s operational deficiencies are not unnecessarily made available. This article, the second in a two-part series, provides practical guidance regarding the provisions that need to be included in an engagement letter with a consultant, details daily steps a company must take to ensure it remains Kovel-compliant and examines circumstances under which it is and is not appropriate for companies to employ Kovel arrangements. The first article in this series detailed the legal requirements of the Kovel doctrine, as well as considerations for companies when deciding whether to invoke or waive the privilege. See also “When Are Reports of Internal Investigations Protected by Attorney-Client Privilege?” (Apr. 30, 2014).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    Attorney-Consultant Privilege? Key Considerations for Using the Kovel Doctrine (Part One of Two)

    Most companies are comfortable that their interactions with outside counsel during investigations, audits and compliance assessments are covered by privilege. However, whether that protection also applies to the range of non-attorney consultants who also help attorneys with those efforts, such as forensic accountants and investigators, is less clear. The Second Circuit’s Kovel decision in 1961 extended the attorney-client privilege to third parties assisting attorneys in representing clients under certain circumstances. This two-part series discusses how companies can most successfully make use of so-called “Kovel arrangements.” This first article describes the requirements of the Kovel privilege as established by case law. The second article will detail the requisite features of a fully compliant Kovel arrangement and when they are appropriate. See also “Preserving the Attorney-Client Privilege in Cross-Border Internal Investigations” (Jun. 26, 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.23 (Nov. 23, 2016)

    Developing Key Performance Indicators and Tracking Metrics Using ISO 37001 (Part Two of Two)

    The International Organisation for Standardisation’s new standard for anti-bribery management systems – ISO 37001 – provides a useful frame of reference for companies developing management tools such as key performance indicators (KPIs) and tracking metrics to address anti-corruption compliance. In the first part of this guest article series, Matthew Herrington, a partner at Steptoe & Johnson, Jonathan Drimmer, vice president and deputy general counsel at Barrick Gold Corp., and Leslie Benton, vice president of advocacy and stakeholder engagement of CREATE.org, explained how to use ISO 37001 to develop management tools such as KPIs and tracking metrics to address anti-corruption compliance, and provided an example of a KPI strategy mapped to the training requirement. In this second part, they examine additional areas of ISO 37001 that naturally lend themselves to KPI and/or metrics. See “Developing Key Performance Indicators and Tracking Metrics for an Anti-Corruption Program” Part One of Two)” (Feb. 24, 2016); Part Two (Mar. 9, 2016).

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  • From Vol. 5 No.21 (Oct. 26, 2016)

    EY’s Rick Sibery Outlines a Seven-Step Process for Monitoring Third Parties

    Despite consistent warnings about the corruption risks associated with engaging third parties in foreign locations, the vast majority of FCPA settlements continue to involve such relationships. Moving beyond traditional due diligence to a more robust, ongoing approach to third-party management is one of the best ways to show regulators that the company is serious about compliance. Effectively monitoring third parties requires more than just performing data analytics, EY partner Rick Sibery said during a recent interview with The FCPA Report. He suggested that a company adopt a holistic approach to monitoring, considering not only its full third-party compliance process but also leveraging other areas of its anti-corruption compliance program. During our conversation, Sibery outlined a seven-step process for optimizing a company’s third-party monitoring program. See “Using Data Analytics to Meet the Government’s Anti-Corruption Compliance Expectations” (May 4, 2016).

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  • From Vol. 5 No.20 (Oct. 12, 2016)

    PwC State of Compliance Survey Explores Compliance and Ethics Leadership, Risk Assessments and Compliance Oversight

    How are companies relating ethics and compliance controls to business strategy and risk management functions? PwC recently surveyed 800 executives at top global companies to examine how they approach compliance, including their methods of assessing risk and the structures of their compliance functions. See also “PwC Report Offers Five Ways to Elevate the Role of the Compliance Function” (Jul. 8, 2015); and “PwC Survey Examines the Role of the Compliance Officer” (Jul. 9, 2014).

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  • From Vol. 5 No.9 (May 4, 2016)

    Using Data Analytics to Meet the Government’s Anti-Corruption Compliance Expectations

    The SEC and DOJ’s FCPA Resource Guide outlines ten “Hallmarks of an Effective Compliance Program” that provide prescriptive guidance about what the DOJ and the SEC consider to be critical components of an effective compliance program. But, what are compliance officers and chief audit executives to do in response to this regulatory “perfect world” of compliance? With limited resources and competing priorities in the real world, where should compliance officers and chief audit executives focus their efforts to meet this guidance? The answer is data analytics, Grant Thornton’s Bill Olsen, Dan Reynolds and Alex Koltsov say in a guest article. They argue that when used properly, data analytics is proactive, risk-based, scalable, repeatable and defensible against after-the-fact scrutiny. The article focuses on how two regulatory program “hallmarks,” ABAC risk assessment and continuous improvement and monitoring, can be addressed by data analytics. See also “Ernst & Young Experts Reveal How Forensic Data Analytics Can Transform Anti-Corruption Compliance” (Apr. 30, 2014).

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    Ten Key Compliance Measures CCOs Should Implement in 2016

    The increased enforcement of the FCPA and the U.K. Bribery Act, and statements by top enforcers of those laws, have highlighted the need for companies to identify and address any potential exposure to violations of anti-bribery and corruption laws around the world. As a new KPMG study reveals, managing new and emerging risks can seem overwhelming. In a guest article, Randy Stephens and Ed Petry of NAVEX Global identify ten steps to help compliance officers get ahead of the curve and plan for the coming year. See “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two)” (Apr. 3, 2013); Part Two (Apr. 17, 2013).

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  • From Vol. 5 No.7 (Apr. 6, 2016)

    Best Practices for Performing Compliance Program Assessments: An Interview With Pamela Passman of CREATe.org

    One of the greatest challenges companies face when performing a program assessment is measuring the strength of the program. The Center for Responsible Enterprise And Trade, also known as CREATe.org, is a non-governmental organization that has a novel approach to helping companies assess their programs. They have developed what they refer to as “leading practices” based on proven anti-corruption strategies from numerous multinational organizations and U.S. and other governmental organizations. For more insights on this unique approach to program assessments, The FCPA Report spoke with Pamela Passman, founder, president and CEO of CREATe, about their process and how it can help companies improve their programs. See also “Best Practices for Performing Compliance Program Assessments: An Interview With Susan Markel of AlixPartners” (Feb. 24, 2016).

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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)

    Best Practices for Performing Compliance Program Assessments:  An Interview With Susan Markel of AlixPartners

    Last week, both the SEC and DOJ settled with Massachusetts-based software firm PTC and, as part of the non-prosecution agreement, the DOJ once again outlined what it expects from compliance programs, including a “periodic risk-based review.” The DOJ recommended that such reviews assess the risks the company faces but also look at the anti-corruption policies and procedures to ensure their continued effectiveness. These program assessments can take different shapes and forms, and can involve a variety of in-house and outside experts. To get an auditor’s perspective on program assessments, The FCPA Report spoke with Susan Markel of AlixPartners about the benefits of program assessments and how teams of lawyers and auditors can work together to perform such assessments effectively and efficiently. See “Best Practices for Performing Compliance Program Assessments: An Interview With Jeffrey Kaplan of Kaplan & Walker” (Nov. 4, 2015).

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  • From Vol. 5 No.3 (Feb. 10, 2016)

    Transparency International Survey Finds Mixed Results in Combating Corruption

    One important indicator companies use to assess a country’s corruption risk is the ranking the country is given by anti-corruption watchdog Transparency International (TI). TI’s latest report revealed some discouraging corruption numbers, though TI did note that there were more countries whose scores improved from 2014 to 2015 than those whose scores declined in that time. One development was the growing number of protests against corruption in 2015. “People across the globe sent a strong signal to those in power: it is time to tackle grand corruption,” TI’s Chair, José Ugaz, said. We analyze the new numbers. See also “How to Mitigate FCPA Risk Before and After an Acquisition” (Feb. 18, 2015).

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  • From Vol. 4 No.24 (Nov. 18, 2015)

    Customs Corruption Risks:  Should a Company Ever Pay a Facilitation Payment to a Customs Official? (Part Three of Three)

    Moving goods from one country to another – a staple of many businesses – exposes companies to various points of bribery risk as employees try to navigate different customs regimes and expedite shipments.  One particular area of risk is the temptation to give a customs official a small “grease payment” to quickly clear goods through customs.  Under certain circumstances such payments may be permissible – but not always.  This article, the final installment of The FCPA Report’s series on anti-corruption risks related to customs, takes an in-depth look at facilitation payments in the customs process, which have become “a trap for the unwary,” according to Boies, Schiller & Flexner partner Scott Wilson.  The article examines when, if ever, companies should allow facilitation payments and, if so, how companies should structure their facilitation payment policies.  The first article gave an overview of the types of corruption risks companies face when engaging in international trade, and suggested four ways to mitigate them.  The second looked at the role third parties, such as customs brokers and freight forwarders, play in customs corruption risk and discussed how companies can minimize those risks through due diligence, communicating expectations, contract language and monitoring.  See also “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); Part Two, Vol. 1, No. 5 (Aug. 8, 2012).

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  • From Vol. 4 No.23 (Nov. 4, 2015)

    Customs Corruption Risks: Four Ways to Limit the Risks of Working with Customs Brokers, Freight Forwarders and Other Third Parties (Part Two of Three)

    Importing and exporting goods across borders exposes companies to corruption risks on a number of fronts.  Third-party risks are particularly prevalent because international trade often requires that a company work with agents such as customs brokers and freight forwarders.  This second article in The FCPA Report’s series on customs risks examines the risks posed by third parties in the customs process and identifies four key strategies for mitigating those risks.  The first article in the series examined how the customs system works and the risks associated with that system, including books and records violations for inaccurate customs forms and the temptation for employees to make illegal payments to customs officials to ensure that their paperwork is approved as quickly as possible.  The third article will discuss facilitation payments in the customs context, including whether companies should allow such payments and, if so, how they can structure their compliance policies to minimize risks.  See also “Anti-Corruption and Trade Regulations: Identifying Common Elements and Streamlining Compliance Programs (Part One of Two),” The FCPA Report, Vol. 3, No. 14 (Jul. 9, 2014); and Part Two, Vol. 3, No. 15 (Jul. 23, 2014).

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  • From Vol. 4 No.23 (Nov. 4, 2015)

    Best Practices for Performing Compliance Program Assessments: An Interview with Jeffrey Kaplan of Kaplan & Walker

    Continuous improvement, achieved by ongoing testing and monitoring, is one of the hallmarks of an effective compliance program.  The FCPA Report’s series on compliance program assessments illuminates how companies can use such assessments to meet their ongoing monitoring responsibilities.  In this first interview in the series, The FCPA Report spoke with Jeffrey Kaplan, a partner at Kaplan & Walker with more than 25 years of experience assisting companies in assessing their compliance programs.  He discussed how program assessments differ from general risk assessments, the basic steps for such an assessment and when a company should specifically target the anti-corruption program for assessment.  For more on risk assessments in general see “Conducting Effective Anti-Corruption Risk Assessments: An Interview with David Simon, Partner at Foley & Lardner,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2013); and “An Interview with Kevin Bennett, Managing Director, Forensic and Valuation Services, at Grant Thornton,” Vol. 2, No. 24 (Dec. 4, 2013).

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  • From Vol. 4 No.21 (Oct. 21, 2015)

    Customs Corruption Risks: Identifying the Problem Areas (Part One of Three)

    Moving goods from one country to another – a staple of many businesses – exposes companies to various points of bribery risk as employees try to navigate different customs regimes and expedite shipments.  In this three-article series, we explore customs-related hurdles and FCPA risks.  This, the first article in the series, examines how the customs system works and the risks associated with that system, including books and records violations for inaccurate customs forms and the temptation for employees to make illegal payments to customs officials to ensure that their paperwork is approved as quickly as possible.  The article also outlines four ways to mitigate customs risks.  The second article in the series will take a closer look at how to address the risks arising from working with customs brokers, freight forwarders and other third-party vendors.  The third article will discuss facilitation payments in the customs context, including whether companies should allow such payments and, if so, how they can structure their compliance policies to minimize risks.  See also “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. 2 (Jun. 6, 2012).

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  • From Vol. 4 No.15 (Jul. 22, 2015)

    Mitigating Corruption Risk in the Middle East (Part One of Two)

    The Middle East lures businesses and investors with eye-popping wealth, rich natural resources and an almost insatiable appetite for growth.  But the region presents a panoply of challenges for those wishing to do business there without running afoul of both American and local anti-corruption laws.  A prevalence of state-owned entities and business-minded royal families; laws requiring third-party facilitators in transactions; and a culture that embraces gift-giving are only some of the corruption risks in the region.  These challenges were recently addressed at a Strafford Publications panel featuring Tom Best, a partner at Steptoe & Johnson in Washington, D.C.; Marc Alain Bohn, counsel at Miller & Chevalier in D.C.; John Vincent Lonsberg, a partner with Baker Botts based in Dubai, U.A.E.; and Daniel P. Chung, of counsel with Gibson Dunn in D.C.  This article series covers some of the insights from the panelists.  This first article addresses the diverse cultural and legal factors that a company needs to be aware of when doing business in the region.  The second article will focus on three specific areas of corruption risk and strategies for mitigating those risks.  See also “Corruption and the Arab Spring: Compliance Implications for International Companies,” The FCPA Report, Vol. 1, No. 4 (Jul. 25, 2012).

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  • From Vol. 4 No.13 (Jun. 24, 2015)

    Ten Steps A Company Can Take to Mitigate Corruption Risk When Entering a New Market (Part One of Two)

    New markets promise tremendous opportunities for growth and expansion, but also are filled with potential corruption landmines – new business partners, different cultural norms and local laws are only a few of the issues that can trip up a company.  The FCPA Report's ten-step guide to mitigating corruption risk when entering a new market will help companies create and implement an effective market-entry strategy.  This, the first article in a two-part series, discusses the first four steps: how a company can build a risk profile for the country, the various methods companies can use to enter new markets and how to mitigate the risk from local partners and other third parties.  The second article will address: logistical challenges, disclosures to local governments, integration plans, compliance programs and monitoring and reviewing the compliance program.  See “Gibson Dunn Attorneys Take the Pulse of Anti-Corruption Risks in Emerging Markets,” The FCPA Report, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 4 No.12 (Jun. 10, 2015)

    Detecting and Mitigating Corruption Risk When Participating in Public Procurements: Seven Steps to Take During and After a Procurement Process (Part Three of Three)

    Winning a contract through a public procurement process presents a tremendous opportunity for a company trying to enter or expand in an emerging market – the World Bank estimates that procurements account for approximately two-thirds of spending in such areas.  However, these rich sources of business do not come without risk.  Procurement processes require companies to interact with foreign officials and often involve third-party agents or local partners, providing ample opportunity for bribery.  The FCPA Report is publishing a three-part article series to help companies mitigate the corruption risks that arise before, during and after the public procurement process.  This third and final article in the series details seven steps a company should take to protect itself during and after a procurement process.  The first article examined how procurement works and when and how bribery occurs during the procurement process.  The second article provided six steps a company should take prior to engaging in a procurement process.  See also “The World Bank’s Wide Reach and Its Growing Anti-Corruption Program,” The FCPA Report, Vol. 3, No. 11 (May 28, 2014).

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  • From Vol. 4 No.12 (Jun. 10, 2015)

    In-House and Outside Counsel Share Advice on Risk Assessments, Gift Policies and Third-Party Due Diligence

    Effective risk assessments, strong third-party practices and gifts and hospitality procedures that hold up under fire are at the heart of best-in-class anti-corruption compliance programs.  In a recent Practising Law Institute event, moderated by Gibson Dunn partner Richard W. Grime, outside and in-house counsel discussed how they tackle developing, implementing and monitoring those essential features of compliance programs.  The panel included Kathryn Cameron Atkinson, a member at Miller & Chevalier, Patricia M. Byrne, VP and Associate General Counsel for International Compliance at BAE Systems, Inc., and William B. Jacobson, a partner at Orrick.  See The FCPA Report’s Conducting Effective Anti-Corruption Due Diligence on Third Parties Interview Series: Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard, Vol. 2, No. 20 (Oct. 9, 2013); Principals at Nardello & Co., Vol. 2, No. 19 (Sep. 26, 2013); and Alice Fisher, Partner at Latham & Watkins, Vol. 2, No. 18 (Sep. 11, 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.10 (May 13, 2015)

    Detecting and Mitigating Corruption Risk When Participating in Public Procurements: Understanding the Procurement Process (Part One of Three)

    The World Bank estimates that governments in developing countries spend $820 billion a year on procurement, presenting huge, but precarious, opportunities for multi-national companies positioned to provide goods and services for those governments.  The 2014 OECD Foreign Bribery Report found that 57% of the global foreign bribery enforcement actions it studied involved bribes to obtain public procurement contracts.  This three-part article series is designed to help companies mitigate the risks associated with participating in a public tender.  This, the first article in the series, examines how procurement works, the riskiest points of the process and common bribery schemes related to procurement.  The second article will detail six steps a company should take before engaging in the procurement process; and the final article will explore additional actions a company should take during and after the procurement process.  See “Key Compliance Takeaways from the OECD Foreign Bribery Report,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 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. 3 No.25 (Dec. 17, 2014)

    Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In

    Selling your company’s business side on compliance; the key indicators of a successful compliance program; and the government’s view of M&A risks were all on the agenda of the FCPA enforcement officials' annual fireside chat with the FCPA defense community.  SEC Chief Kara Brockmeyer (FCPA Unit, Enforcement Division), and DOJ Deputy Chief Patrick Stokes (Fraud Section of Criminal Division) were both on hand for the “year in review” discussion at American Conference Institute’s recent International Conference on the Foreign Corrupt Practices Act.  The FCPA Report discussed the regulators’ presentation with prominent defense practitioners, who provided a few caveats to the regulators’ pronouncements.  In our previous issue, we covered Stokes’ and Brockmeyer’s discussion of enforcement priorities and the defense bar’s reaction.  Our coverage of last year’s “year in review” panel can be found here and here.

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  • From Vol. 3 No.22 (Nov. 5, 2014)

    Seven Steps the Legal Department Can Take to Decrease Cybersecurity Risk

    Every GC and legal department should be thinking about cybersecurity, Suzanne Folsom, General Counsel and Senior Vice President, Governmental Affairs at U.S. Steel said during a recent panel at the 2014 Women, Influence and Power in the Law Conference.  Yet, many companies are slow to address cybersecurity issues, Folsom observed.  The real leaders in the cybersecurity space are thinking about those kinds of issues, they’re running training exercises and they’re developing partnerships, she said.  To assist legal departments in addressing cyber risk, Folsom along with Harriet Pearson, a partner at Hogan Lovells and Jane Storero, Vice President, Corporate Governance and Secretary at Pepco Holdings, presented seven concrete actions they can take to protect their companies.  See also “Strategies for Preserving Data Before and During an FCPA Investigation,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012).

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  • From Vol. 3 No.19 (Sep. 24, 2014)

    How Can CCOs Demonstrate Compliance Program Effectiveness?

    A chief compliance officer must be able to demonstrate to management and the board that the company’s compliance dollars are providing a solid return on investment.  Meanwhile, if the company becomes embroiled in an investigation, the CCO must also be able to demonstrate to the government that the program is effective.  At the Society of Corporate Compliance and Ethics’ 2014 Compliance and Ethics Institute, Michael Ward, a former Deputy General Counsel and Vice President, Compliance Systems and Investigations for Cisco Systems and former prosecutor, discussed the metrics the CCO should use to measure the effectiveness of a compliance program; strategies for communicating the process; and the results to the relevant audiences.  See also “Measuring the Efficacy of Ethics and Compliance Programs,” The FCPA Report, Vol. 3, No. 12 (Jun. 11, 2014).

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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.15 (Jul. 23, 2014)

    When and How Should Companies Include Audit Rights in Third-Party Contracts? (Part One of Three)

    In November 2013, Kara Brockmeyer, Chief of the SEC's FCPA Unit, reported that 60%-70% of the SEC's FCPA cases in the past two years have involved third-party intermediaries.  As detailed in our series about anti-corruption reps and warranties in third-party contracts (Part One and Part Two), including the appropriate reps and warranties in contracts can be a key tool to mitigate the risks caused by employing third parties.  Clauses pertaining to audit rights are some of the most difficult to get right, and can be some of the most important.  To assist companies in optimizing this compliance tool, The FCPA Report is publishing a three-part series on when and how companies should include audit rights in their third-party contracts.  This, the first article in the series, discusses how companies should determine which third-party relationships require audit rights and outlines the benefits and drawbacks of including audit rights provisions in contracts.

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  • From Vol. 3 No.15 (Jul. 23, 2014)

    Anti-Corruption and Trade Regulations: Identifying Common Elements and Streamlining Compliance Programs (Part Two of Two)

    The $9 billion dollar fine of French bank BNP Paribas, which pled guilty in late June 2014 to transferring billions of dollars on behalf of Iran, Sudan and Cuba, is a sharp reminder of the government’s continued focus on trade sanctions.  Understanding how and when the FCPA and trade regulations intersect can help companies affected by both laws structure their compliance programs effectively and efficiently.  In a recent webinar hosted by Securities Docket, FCPA and trade regulations experts from KPMG and McGuire Woods came together to explain the details of the Office of Foreign Assets Control (OFAC) regulations and how they compare and contrast to the FCPA.  In part two of our article series, the panelists discuss six common elements of FCPA and trade sanctions enforcement, detail potential anti-corruption and trade regulation synergies and provide four steps for developing a synergistic compliance program.  In part one of this article series, the panelists detailed various OFAC penalties, discussed how OFAC calculates penalties and outlined three issues for companies to consider when negotiating with OFAC.  See also “How Can Anti-Money Laundering Laws Affect an FCPA Compliance Program? An Interview with Former FinCEN Director James H. Freis, Jr. (Part Two of Two),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    Ernst & Young Experts Reveal How Forensic Data Analytics Can Transform Anti-Corruption Compliance

    The terms “big data” and “forensic data analytics” (FDA) can seem daunting, especially to lawyers, who may feel more at home opining on legal issues than creating the charts, graphs and maps produced by FDA.  But analyzing big data this way provides a wealth of information that can be used to detect and prevent corruption and can go far in demonstrating a command of compliance to regulators and prosecutors.  Ernst & Young (EY) recently examined how companies use FDA in their “Global Forensic Data Analytics Survey 2014” (Survey).  Vincent Walden and Brian Loughman of EY’s Fraud Investigation & Dispute Services practice spoke with The FCPA Report about the significance of the Survey findings and how companies can use these tools.  EY’s Richard Sibery, with other FCPA experts, gave further insight into big data and FDA at a recent panel at the New York City Bar Association, “Using Data Analytics and Information Technology to Build and Manage an Effective Anti-Corruption Program.”  See also “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. 3 No.5 (Mar. 5, 2014)

    Six Common FCPA Risks in Southern Africa and Strategies for Managing Those Risks

    Conducting business in Southern Africa, as in other emerging markets, offers both risks and rewards.  At a recent webinar hosted by Momentum Events Group, Baker & McKenzie’s Reagan R. Demas detailed common corruption risks for businesses that operate in Southern Africa and strategies for managing those risks.  He provided practical examples from Angola, Congo, Mozambique, South Africa and Uganda.  The presentation focused on six common areas of risk: community finds, security and protection payments, cash economies, influential political parties, “local content” laws, and customs and immigration issues.  See “How Can Companies Capture the Telecom, Energy and Resources Opportunities in Africa While Mitigating Corruption Risks?,” The FCPA Report, Vol. 2, No. 20 (Oct. 9, 2013).

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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. 3 No.2 (Jan. 22, 2014)

    Risk-Based Solutions to Complying with Anti-Money Laundering, Export Controls, Economic Sanctions and the FCPA

    Many companies subject to the FCPA are also concerned about anti-money laundering laws, economic sanctions or export control restrictions.  Often, these crimes go together.  What do these three areas have in common?  How should companies structure their compliance programs in response to the various laws to which they are subject?  During a recent webinar hosted by the Cross-Border Group, partners at Foley & Lardner LLP discussed the overlap among these laws and provided concrete suggestions for how companies can use risk-based approaches to comply with all three. See also “How Can Anti-Money Laundering Laws Affect an FCPA Compliance Program? An Interview with Former FinCEN Director James H. Freis, Jr. (Part Two of Two),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 2 No.24 (Dec. 4, 2013)

    Conducting Effective Anti-Corruption Risk Assessments:  An Interview with Kevin Bennett, Managing Director, Forensic and Valuation Services, at Grant Thornton LLP

    “Risk-based” is perhaps the most commonly uttered phrase in the anti-corruption space.  The DOJ and the SEC routinely recommend that companies perform risk assessments when formulating and implementing their anti-corruption compliance programs.  Despite this clear directive, the government has provided little guidance on what constitutes a sufficient and effective risk assessment.  Recognizing the business demand for a clear outline of best practices in this area, The FCPA Report is publishing a series of interviews with FCPA experts in different disciplines on effective techniques for conducting anti-corruption risk assessments.  This, the second article in the series, includes our interview with Kevin Bennett, a Managing Director in the Forensic and Valuation Services practice of Grant Thornton LLP.  The first article in the series included our interview with David Simon, partner at Foley & Lardner LLP.  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.23 (Nov. 20, 2013)

    Conducting Effective Anti-Corruption Risk Assessments: An Interview with David Simon, Partner at Foley & Lardner LLP

    Objectively, a best-in-class compliance program must be reasonably tailored to the risks actually faced by a company, but determining how to realistically assess the risks it faces is a subjective process.  There is no government-promulgated method for conducting a sufficient anti-corruption risk assessment; thus companies with global operations are left with the imperative of conducting risk assessments, but little authoritative guidance for doing so.  In an effort to bridge the gulf between demand and supply of best practices, The FCPA Report is publishing a series of interviews with FCPA experts in different disciplines on effective techniques for conducting anti-corruption risk assessments.  This article, the first in the series, contains our interview with David Simon, partner at Foley & Lardner LLP.  Simon has extensive anti-corruption experience, including representing Carlos Rodriguez in his challenge to the government’s interpretation of “foreign official” in the Haiti Teleco case; that case is currently in front of the Eleventh Circuit.  See “A Hot Bench Hears Oral Arguments in Historic Challenge to the Definition of ‘Foreign Official,’” The FCPA Report, Vol. 2, No. 21 (Oct. 23, 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.22 (Nov. 6, 2013)

    Five Lessons from 2013 FCPA Enforcement: Transaction Monitoring, International Cooperation, Documenting Hiring Decisions, Risk Assessments and Individual Prosecutions

    It has been a busy year for FCPA enforcement – the government has prosecuted individuals for violating the FCPA, used aggressive criminal investigation techniques to build cases and continued to increase its cooperation with foreign governments.  In a recent webinar hosted by The Network, Tom Fox shared his insight into recent FCPA trends and provided tips for FCPA compliance arising from those trends.  See also “Seven Key Trends That Are Changing the FCPA Enforcement and Compliance Landscape,” The FCPA Report, Vol. 2, No. 14 (Jul. 10. 2013).

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  • From Vol. 2 No.20 (Oct. 9, 2013)

    Conducting Effective Due Diligence on Third Parties:  An Interview with Gwen Romack, Director of Global Anti-Corruption at Hewlett-Packard

    Many companies rely heavily on third parties when operating internationally.  Among other things, third parties serve as sales agents, handle customs issues, distribute product and educate the company on local practices.  Hiring third parties helps increase revenue, but also puts the company at significant risk of violating the FCPA.  If a third party bribes a foreign official, the company that hired the party can be held liable.  Effective initial due diligence is crucial in avoiding FCPA liability based on the acts or omissions of third parties, as is continuous monitoring of third parties.  Recognizing this, The FCPA Report is publishing a series of interviews with experts from different disciplines – from an outside law firm, an in-house compliance department and an investigative firm – on best practices when handling due diligence on third parties.  This article, the third in the series, includes our interview with Gwen Romack, Director, Global Anti-Corruption and U.S. Public Sector Compliance, at HP.  The first article in the series contained an interview with Alice Fisher, a partner at Latham & Watkins and former head of the Criminal Division at the DOJ.  The second article in the series contained an interview with Nardello & Co.’s FCPA team, a group of seasoned investigators with extensive experience in anti-corruption initiatives.

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Conducting Effective Anti-Corruption Due Diligence on Third Parties: An Interview with Alice Fisher, Partner at Latham & Watkins

    Engaging third parties is necessary for most global businesses, but rife with corruption risk.  Under the FCPA, a company can be held responsible for any improper payments made on its behalf by a third-party agent or partner, and most of the recent FCPA enforcement actions by the SEC and DOJ have involved the actions of third parties – making the task of conducting due diligence on third parties one of the most critical and complicated issues in FCPA compliance.  How should a company efficiently allocate its due diligence resources?  What should a company do when its third-party partner is less than forthcoming?  Can a party engage a third party even if due diligence raises red flags?  The FCPA Report is publishing a series of interviews with experts from different disciplines on best practices for conducting anti-corruption due diligence on third parties.  This article, the first in the series, includes our interview with Alice Fisher, partner at Latham & Watkins.  Fisher specializes in white collar criminal investigations, internal investigations and advising clients on a range of criminal matters, including the FCPA.  She formerly served as Assistant Attorney General in charge of the Criminal Division of the DOJ.  See also “Designing Effective FCPA Compliance Programs and Monitoring Third Parties After the Guidance: An Interview with H. David Kotz, Michael Volkov and Paul Zikmund,” The FCPA Report, Vol. 2, No. 2 (Jan. 23, 2013).

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  • From Vol. 2 No.17 (Aug. 21, 2013)

    Best Practices for Reviewing Anti-Corruption Compliance Programs: Challenges, Preparation and Risk Evaluation (Part Two of Three)

    As the recent joint DOJ/SEC FCPA Resource Guide makes clear, for a company to earn meaningful credit with the government in an anti-corruption investigation, its compliance program must not only be robust, but also periodically reviewed and improved.  However, neither the Guide nor any other government resource provides specific direction on the appropriate frequency or depth of reviews.  In lieu of specific authority, companies typically turn to best practices and industry norms when deciding how frequently to review and update their compliance programs.  Best practices, though, can be hard to discern and difficult to apply.  Recognizing the challenge and importance of actionable information on this topic, The FCPA Report is publishing a series of three articles on best practices for reviewing anti-corruption compliance programs.  This article, the second in the series, discusses the chief obstacles companies face when conducting a review; provides strategies for creating management buy-in; describes four steps a company should take when preparing for a review; and outlines what risk areas the review should address.  The first article in the series discussed the importance of regular anti-corruption compliance reviews; detailed the government’s expectations for reviews; outlined how to create an efficient and effective compliance review schedule; and specified how companies should staff their compliance reviews.  See “Best Practices for Reviewing Anti-Corruption Compliance Programs: Government Expectations, Scheduling and Staffing (Part One of Three),” The FCPA Report, Vol. 2, No. 16 (Aug. 7, 2013).  The third and final article in the series will provide strategies for conducting the actual review; discuss what a company should do post-review; outline issues surrounding documentation of the review; and examine how FCPA settlement agreements affect reviews. 

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  • From Vol. 2 No.16 (Aug. 7, 2013)

    Best Practices for Reviewing Anti-Corruption Compliance Programs: Government Expectations, Scheduling and Staffing (Part One of Three)

    The recent joint DOJ/SEC Guidance reflects the government’s view that, in order to be effective, an FCPA compliance program must be periodically reviewed and improved.  However, neither the Guidance nor any other authority specifies how frequently such reviews should be conducted, how expansive such reviews should be or what steps companies should take to improve discovered shortcomings.  In the absence of concrete and authoritative direction on this topic, how should companies approach the ambiguous but critical task of reviewing and improving their compliance programs?  This article is the first in a three-part series addressing this question.  Specifically, this article discusses the importance of regular anti-corruption compliance reviews; details the government’s expectations about reviews; outlines how to create an efficient and effective compliance review schedule; and specifies how companies should staff their compliance reviews.  The second installment will discuss the biggest challenges companies face when conducting a review; what a company should consider when preparing for a review; how a company should prepare to perform a review; and what areas the review should address.  The third and final article in the series will provide strategies for conducting the actual review; discuss what a company should do post-review; outline issues surrounding documentation of the review; and examine how FCPA settlement agreements affect reviews.  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.15 (Jul. 24, 2013)

    Lessons Learned by Motorola Solutions, ExxonMobil and VMWare on the Role of Risk in Designing and Implementing an FCPA Compliance Program

    Risk assessment procedures are the foundation of an effective and efficient anti-corruption compliance program.  At the recent Momentum Anti-Corruption Global Congress, three experienced in-house compliance counsel – currently at Motorola Solutions, ExxonMobil and VMWare – shared their insight and experience creating and implementing risk-based anti-corruption compliance programs.  Specifically, the panelists, speaking in their individual capacities, described the corruption risks raised by their suppliers, customers and partners; offered differing takes on the role of certification and risk coding; shared best practices born of experience for interacting with employees and third parties; relayed their experiences with third-party sponsorship; and emphasized the central place of mitigation in any risk-based compliance program.  Jay Musoff, a partner at Loeb & Loeb LLP, moderated the panel.

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  • From Vol. 2 No.12 (Jun. 12, 2013)

    How to Recognize and Address FCPA Challenges in India

    With over 1.2 billion people, and a well-educated and low-cost work force, India is an appealing market for international businesses.  However, corruption is endemic in India and presents serious FCPA compliance challenges for companies that operate there.  A recent webcast highlighted many of those challenges, provided insights on how to identify and monitor the risks associated with doing business in India (and elsewhere) and drew lessons from FCPA enforcement actions that involved conduct in India.  The panelists were Jay Holtmeier, a partner at law firm WilmerHale; Elizabeth D. Keating, Global Compliance Counsel for Investigations at Johnson Controls; and Michael Stavridis, a partner at accounting firm Ernst & Young.  For insight on anti-corruption compliance in the other BRIC countries, see “A Seven-Step Process for Mitigating Corruption Risk When Engaging Third-Party Consultants in Brazil,” The FCPA Report, Vol. 1, No. 7 (Sep. 5, 2012); “Alan Kartashkin and Dmitri Nikiforov of Debevoise & Plimpton LLP Discuss the Ins and Outs of Russian Bribery Law,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012); “A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.12 (Jun. 12, 2013)

    How Forensic Accountants Help Identify Corruption Risk and Delve into the Details of Books and Records

    Forensic accountants are an integral part of anti-corruption compliance.  From proactive risk assessments to reactive investigations, forensic accountants can probe the details of a company’s books and records, assisting compliance officers and in-house and outside counsel.  This guest article by Lindi Jarvis and Javier Alvarez of FTI Consulting provides insight on the steps forensic accountants can take to prevent, detect and remediate corruption, highlighting best practices and including examples such as a “heat map” to help focus resources in high-risk areas.  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.10 (May 15, 2013)

    Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training

    The government has made it clear that complying with the FCPA does not, and should not, require companies to adopt a one-size-fits-all solution.  Each company must tailor its program to its unique business model.  Despite the individuality of each program, however, it is useful for a company and its advisors to understand how the company’s peers and competitors are ensuring FCPA compliance.  How much are companies spending on anti-corruption compliance?  What type of training program does each company find effective?  What percentage of companies invest in risk assessments?  A recent panel hosted by the Practising Law Institute provided answers to these questions and more.  Combining commentary from industry experts Mark Mendelsohn, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, Alexandra Wrage, president of TRACE International, Inc., Raja Chatterjee, Global Head of the Anti-Corruption Group at Morgan Stanley, and Susan Ringler, Deputy General Counsel for Xylem Inc., as well as interactive audience polling of conference participants (including in-house counsel, outside counsel and compliance personnel), the panel provided unique insight into trends and patterns in the FCPA world.  The panel analyzed the difficult issues that arise when developing training programs, allocating anti-corruption compliance resources, conducting risk assessments, executing internal investigations and making voluntary disclosures.  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).  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. 2 No.10 (May 15, 2013)

    Complying with the FCPA: Mergers, Acquisitions and Investment Transactions (Part Three of Five)

    In light of the significant FCPA risk posed by cross-border transactions, The FCPA Report is serializing (in five parts) a chapter from a recently published treatise, The Foreign Corrupt Practices Act: Compliance, Investigations and Enforcement.  The authors of the treatise are Martin Weinstein, Robert Meyer and Jeffrey Clark, all partners at Willkie, Farr & Gallagher LLP, and highly-regarded FCPA practitioners.  This installment of the series provides guidance on the due diligence process, including the initial risk assessment, determining the scope of the review, coordinating the work of the review team and investigating red flags.  It also provides advice on steps to take if a compliance issue is discovered and contractual safeguards to include in deal documents to minimize corruption risk.  The first part of the series provided an overview of the corruption liability inherent in M&A and investment transactions and provided insight on mitigation of corruption risk before transactions occur, focusing on successor liability, ratification, acts in furtherance of corruption and investment valuation.  The second installment in the series analyzed post-transaction risk, including the concept of willful blindness and the application of the FCPA’s accounting provisions to mergers and acquisitions.

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  • From Vol. 2 No.5 (Mar. 6, 2013)

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

    Breathing life into even a comprehensive compliance manual is a challenge for most companies.  How can a company ensure that its program is proactive and dynamic, and that it is working at every level of the company?  How can the company ensure that third parties are being vetted at every stage of the process?  A recent webinar featuring H. David Kotz, Director at Berkeley Research Group and former Inspector General of the SEC, and Paul Zikmund, Director of Global Ethics and Compliance at Bunge Limited, tackled these and other hard questions head on, incorporating their long and relevant experience, as well as lessons from the recently-issued FCPA Guidance.  This article, the second in a two-part series, discusses the panelists’ advice regarding the best path forward after a risk score is assigned to a third party, including details about a “boots-on-the-ground” approach to due diligence; 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.  The first article in the series discussed 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.  See “Six Steps for Converting a ‘Paper’ FCPA Compliance Program into a Pervasive Culture of Anti-Bribery Compliance (Part One of Two),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    Knowing Your Partners: Three Steps to Reduce FCPA Risk from Third Party Intermediaries

    The failure to pre-screen and monitor third party intermediaries (TPI) are the root causes of many recent FCPA investigations.  Thus, devising and implementing a consistent process for TPI due diligence and auditing, as well as understanding regulatory differences across the globe, are “must do” items for companies operating overseas.  Marc Miller, a partner in the New York forensic and risk consulting practice of KPMG LLP, recently shared his advice on identifying and mitigating risks involving TPIs in a webinar sponsored by compliance software developer Aravo Solutions, Inc. entitled “The Increasing Business Risk of FCPA Failures.”  Miller suggested that companies focus on three steps when it comes to third parties, each of which is described in detail in this article.  Miller also discussed his view on recent enforcement trends, informed by the Guidance.

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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. 2 No.4 (Feb. 20, 2013)

    How Can Anti-Money Laundering Laws Affect an FCPA Compliance Program? An Interview with Former FinCEN Director James H. Freis, Jr. (Part Two of Two)

    Though motivated by different statutes, anti-money laundering compliance programs and FCPA compliance programs deal with related risks.  Anti-money laundering laws are also integrally related to FCPA charges, and prosecutors use them frequently in FCPA enforcement actions across industries and geographies.  The FCPA Report recently spoke with the nation’s former top anti-money laundering regulator, James H. Freis, Jr., about a range of issues, including the role anti-money laundering laws play in FCPA cases, how financial regulators are working together across the globe to combat corruption and the corruption challenges facing the gaming industry in particular.  In this, the second part of our interview, Freis discussed, among other things: the connection between anti-bribery laws and broader financial reforms around the globe; how financial institutions can integrate their AML and FCPA compliance programs; the similarities and differences between Politically Exposed Persons and foreign officials; and the importance of high-profile FCPA enforcement.  In the first article in this series, Freis discussed, among other things: what companies should focus on when conducting corruption and anti-money laundering risk assessments and audits; how the DOJ and SEC work with FinCEN on corruption cases; and details regarding the formation, operation and future of the Egmont Group, a 130-member organization of international financial intelligence units.  See “Former FinCEN Director James H. Freis, Jr. Discusses the Intersection between Anti-Money Laundering and Anti-Corruption Law (Part One of Two),” The FCPA Report, Vol. 2, No. 3 (Feb. 6, 2013).

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  • From Vol. 2 No.3 (Feb. 6, 2013)

    Strategies for Implementing the U.K. Bribery Act’s Requirement of Adequate Procedures for Intermediaries

    Intermediaries are crucial to many businesses, sometimes even mandatory, and are replete with corruption risk – under both the FCPA and the U.K. Bribery Act, they can generate criminal liability for their principals if they bribe to win business.  In many jurisdictions, intermediaries are routinely used to enter markets; to identify opportunities; to access and build relationships with decision-makers responsible for awarding contracts, including public officials; to assist with navigating complex local laws, regulations and customs; and to win business.  How can a company mitigate the risks these ubiquitous third parties pose?  In a guest article, James Maton, a partner in Edwards Wildman Palmer UK LLP’s London office, provides strategies to that end by reference to the requirements of the U.K. Bribery Act, one of the most comprehensive anti-bribery statutes in the world, with broad application to global activities connected to the U.K.  It requires companies and partnerships to have adequate procedures intended to prevent bribery in both their private and public sector business activities.  Maton’s article considers the key principles that should underpin those procedures, and the steps an organisation can take to reduce the bribery risks posed by intermediaries.

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Designing Effective FCPA Compliance Programs and Monitoring Third Parties After the Guidance: An Interview with H. David Kotz, Michael Volkov and Paul Zikmund

    Relationships with third parties are a constant pressure point for companies trying to comply with the FCPA.  How should the recently-issued FCPA Resource Guide change a company’s strategy for dealing with third parties, during and after initial due diligence?  On February 6, 2013, LeClairRyan, Berkeley Research Group (BRG) and The FCPA Report will host a complimentary CLE-eligible webinar that will address this and other pressing regulatory questions.  The webinar, entitled “After the Guidance: Designing Effective Compliance Programs and Monitoring Third Parties,” will feature three FCPA experts: former SEC Inspector General and current BRG Director H. David Kotz; LeClairRyan Partner Michael Volkov; and Paul Zikmund, Director of Global Ethics and Compliance at Bunge Limited.  Rebecca Hughes Parker, Editor-In-Chief of The FCPA Report, will moderate the webinar.  Topics to be covered include the FCPA Resource Guide’s specific requirements for compliance programs; how to review and enhance compliance programs to get maximum credit; and best practices for monitoring third parties in a cost-effective manner following initial due diligence.  To register for the webinar, click here.  As a preview of the webinar, The FCPA Report interviewed the three participants on topics including: the elements of an effective third party risk assessment and the categories it should include; the utility of open source databases; common mistakes companies make when designing risk assessments; streamlining risk assessments and due diligence; the differences between due diligence for third parties and for M&A transactions; and effective ways to monitor third parties after they are “on board.”  An edited transcript of our interview is included in this issue of The FCPA Report.

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