The Anti-Corruption Report

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

Articles By Topic

By Topic: Anti-Corruption Policy

  • From Vol. 7 No.21 (Oct. 17, 2018)

    Lessons From AB InBev’s Data Analytics Program: The Future is BRIGHT, and the Future Is Now

    Though the concept of data analytics often piques the interest of compliance officers, integrating a comprehensive system into a compliance program can be daunting. In this guest article, Matt Galvin, the vice president for ethics and compliance at beverage giant AB InBev, explains what the company learned from its experience developing and implementing BREWRight, a data analytics program that he argues has vastly improved the company’s compliance functions, and that has the potential for even more impressive results in the future. See “Using Data Analytics to Boost Compliance Program Effectiveness” (Jun. 27, 2018).

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  • From Vol. 7 No.18 (Sep. 5, 2018)

    DOJ and FBI Take a Closer Look into Collegiate Athletics: Necessary Policies and Compliance Safeguards in a Pay-to-Play Culture

    The marriage between American collegiate sports and the sportswear industry is no secret in 2017, Under Armour signed an $18.5 million one-year partnership with the University of California, Los Angeles, while Adidas finalized a 10-year agreement with the University of Louisville in a deal worth $160 million. In this guest article, Forensic Risk Alliance attorneys Jen Baskin, Jenna Voss and Will Meyer discuss the compliance risks these sponsorship opportunities pose and how to overcome them. For more insight from FRA, see “Broken Windows, Admissions and Stale Conduct: The State of Enforcement at the SEC” (Nov. 15, 2017).

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  • From Vol. 7 No.16 (Aug. 8, 2018)

    Demonstrating That a Company Has “Adequate Procedures” Using ISO 37001 Certification

    The International Organization for Standardization’s (ISO) Anti-Bribery Standard (ISO 37001 or the Standard) is the first attempt by an international-standard-setting organization at helping companies create effective anti-bribery compliance programs. While no government agency has endorsed the Standard, the companies that have sought ISO certification for their programs are likely to be looked upon kindly by regulators. In this guest article, CRI Group training manager Aneta Nastaj discusses how ISO 37001 can help organisations meet those regulators’ expectations. See “Wal-Mart CECO Discusses the Retailer’s Decision to Seek ISO 37001 Certification” (Mar. 21, 2018).

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  • From Vol. 7 No.12 (Jun. 13, 2018)

    Effective and Compliant Employee Monitoring (Part Two of Two)

    Keeping track of employees can be an important part of a compliance program, but complexities arise that require cross-department coordination and deep understanding of numerous privacy limitations and other legal requirements, especially whenthe monitoring is used for purposes beyond security. The second installment of this two-part series provides operational guidance on implementing monitoring programs and navigating contrasting rules in Europe, as well as issues surrounding individual monitoring and data controlled by third parties. The first part tackled the role of data monitoring, effective notice, legal considerations and specific policy considerations. See “Balancing Employment Law Considerations During Corruption Investigations” (Sep. 20, 2017).

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  • From Vol. 7 No.11 (May 30, 2018)

    One More Arrow in the Government’s Anti-Corruption Quiver: The Global Magnitsky Act

    The Global Magnitsky Human Rights Accountability Act, a 2016 statute targeting acts of foreign corruption, authorizes the president to impose financial sanctions and visa restrictions on foreign persons in response to certain human rights violations or acts of corruption. In December 2017, President Trump issued Executive Order 13818, which identified 13 individuals subject to sanctions and also delegated authority for implementing the law to the Treasury and State Departments. The Anti-Corruption Report explores the implications of the statute and the executive order for those working in the ABAC space. See also “Compliance and Self-Protection in an Uncertain Sanctions Environment” (Nov. 1, 2017), and “Five Ways a Company Can Leverage Its Anti-Bribery Compliance Program to Facilitate Sanctions Compliance” (Sep. 14, 2016).

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  • From Vol. 7 No.11 (May 30, 2018)

    Effective and Compliant Employee Monitoring (Part One of Two)

    When can companies “spy” on their employees? Monitoring can be crucial for compliance programs beyond just cybersecurity programs. It is a topic that many compliance officers need to be familiar with – employee digital activity is critical to reducing a variety of risks that employees pose (either inadvertently or maliciously) –  but companies do need to make sure they comply with consent and other legal requirements when implementing surveillance programs. This first part of a two-part series on the topic addresses the role of data monitoring, effective notice, legal considerations and specific policies regarding BYOD, termination and remote employees – including stories from the trenches. Part two will provide operational guidance on implementing effective and compliant monitoring programs, and discuss the contrasting rules and approaches in Europe, including the GDPR and the Barbulescu case. See “Balancing Employment Law Considerations During Corruption Investigations” (Sep. 20, 2017).

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  • From Vol. 7 No.11 (May 30, 2018)

    Understanding the Intersection of Law and Artificial Intelligence

    How can lawyers effectively use artificial intelligence and mitigate the myriad risks it poses? During a recent Strafford panel, Robert W. Kantner, a partner at Jones Day; Michael W. Kelly and Huu Nguyen, both partners at Squire Patton Boggs; and Dennis Garcia, an assistant general counsel at Microsoft, provided insight on how to make the most of AI. See “Ernst & Young Experts Reveal How Forensic Data Analytics Can Transform Anti-Corruption Compliance” (Apr. 30, 2014).

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  • From Vol. 7 No.5 (Mar. 7, 2018)

    The “Human” Side of FCPA Compliance: How to Best Work With HR in the Current Global Enforcement Environment

    Coordination between the compliance department and the human resources department helps ensure the best outcome in the case of corruption-related misconduct. A cross-functional approach allows the company to receive maximum cooperation credit while satisfying local labor and data privacy law requirements and meeting employee expectations. Further, the HR department can play an important role in preventing anti-corruption violations in the first place. In a guest article, Paul, Weiss partner Alex Oh and former senior compliance attorney Kim Vinocour explain the practical implications of DOJ guidance and enforcement actions for corporate compliance and HR departments, focusing on hiring decisions, internal investigations and corruption-related disciplinary actions. See The Anti-Corruption Report’s three-part series on the DOJ’s FCPA Corporate Enforcement Policy: “What’s New and What’s Not” (Jan. 10, 2018); “How Important Is the Presumption of Declination?” (Jan. 24, 2018); and “Cooperation and Compliance Expectations” (Feb. 7, 2018).

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  • From Vol. 6 No.15 (Aug. 2, 2017)

    Measuring Compliance: Getting Started (Part One of Four)

    While most companies have established some sort of compliance program, measuring its effectiveness can be challenging. Collecting data is clearly an important part of that process, but questions remain as to what data to collect, how to collect it and how to analyze it. “When companies think about data, they automatically assume it is something very sophisticated, but it isn’t – it’s just asking how many, how much and why?” Hui Chen, former compliance counsel to the DOJ’s Fraud Section, told The Anti-Corruption Report. In this first article in a multi-part series, we discuss why companies should be measuring their compliance programs and the steps they should take to get started. The following articles will suggest some specific areas of compliance a company could consider tracking and measuring, and discuss the challenges of qualitatively measuring compliance, and gathering and analyzing data. 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. 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.9 (May 10, 2017)

    Industry Risk Spotlight: F. Joseph Warin of Gibson Dunn on Corruption in the Retail and Consumer Products Sectors

    Wal-Mart’s high-profile corruption troubles involving permits in Mexico illustrate the challenges of operating a consumer-facing company in a foreign market. The employees of these companies encounter a plethora of government touchpoints exposing them to significant corruption risks. In this edition of The FCPA Report’s Industry Risk Spotlight, Gibson Dunn’s F. Joseph Warin offers common-sense advice on how to mitigate the unique risks, and provides a primer for companies that partner with retailers or sellers of consumer products. See “Industry Risk Spotlight: Orrick Partner William Jacobson Examines Extractive Industry Corruption” (Nov. 23, 2016).

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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.7 (Apr. 12, 2017)

    The Effect of China’s Two-Invoice System on Anti-Corruption Compliance for Drug Companies 

    Drug sales in China are rife with corruption risk – both in terms of violations of the FCPA and local Chinese anti-corruption laws. By restricting the number of tax-valid invoices in the drug procurement industry chain, China’s new “Two-Invoice System” aims to reduce that risk by increasing the transparency of pharmaceutical product distribution. But, compliance lawyers told our sister publication Policy and Regulatory Report (PaRR), the rule may actually introduce anti-corruption risks for drug companies changing distribution strategies to comply. See “Travel Agencies, Fapiao and Hospitality: $12.8 Million SciClone Settlement Highlights Diversity of Risk in China” (Feb. 10, 2016).

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  • From Vol. 6 No.7 (Apr. 12, 2017)

    Kroll/Ethisphere Report Highlights Concerns About Reputational Risk and Post-Onboarding Monitoring of Third Parties

    A whopping 92% of compliance professionals expect their organizations’ bribery and corruption risks to either increase or remain the same in 2017, according to a survey conducted by Kroll and the Ethisphere Institute, and around half said their compliance budget is lacking. Respondents cited third-party relationships and global regulatory enforcement as enhancing the risk, and expressed concerns about the impact of a bribery or corruption violation on reputation. We analyze the survey results with input from Kroll experts. See also “2016 Brought Heavy Enforcement, a Flurry of Settlements and Disruption to the FCPA Space” (Mar. 1, 2017).

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  • From Vol. 6 No.6 (Mar. 29, 2017)

    Managing Subsidiary Risks: Setting Things Up for Success (Part One of Three)

    A common theme of many anti-corruption settlements is the involvement of foreign subsidiaries. A parent company may have little oversight of its far-flung subsidiaries, but can still be on the hook if bribes are paid or books and records are not kept properly. In this three-part series, The FCPA Report will look at the different ways companies can minimize and mitigate anti-corruption risks at their subsidiaries. In this first part, we discuss how companies can be held liable for the actions of their subsidiaries and how subsidiaries can be set up for success from the beginning – both when building one from scratch and when acquiring an already existing company. The subsequent articles will discuss how companies can use culture, communication and internal controls to keep subsidiary risks in check. See “How to Mitigate FCPA Risk Before and After an Acquisition” (Feb. 18, 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. 6 No.6 (Mar. 29, 2017)

    Insights From Walmart on Using a Gift Policy to Create a Corporate Culture of Integrity

    Gifts and hospitality are an accepted part of business culture, but they are also the source of many anti-corruption law violations. Because the practice is so entrenched, creating a gift policy that suits a company’s business needs is a significant challenge. In a guest article, Daniel Trujillo, the chief compliance and ethics officer for Walmart’s international operations, discusses how Walmart has implemented a strict no-gifts policy and used it as a tool to underscore the company’s corporate culture rooted in personal and professional integrity. See The FCPA Report’s three-part series on travel and entertainment corruption risks: “Five Hallmarks of an Acceptable Hospitality Expenditure” (Mar. 9, 2016); “Three Musts for a Strong T&E Policy and Five Ways a Company Can Customize Its Program” (Mar. 23, 2016); and “Internal Controls to Ensure the Program Is Working” (Apr. 6, 2016).

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  • From Vol. 6 No.5 (Mar. 15, 2017)

    Rolls Settlement Illuminates SFO Expectations for Cooperation and Compliance

    Rolls-Royce’s recent settlement with U.K., U.S. and Brazilian authorities was a key development in global anti-corruption enforcement. The case opens a window into what the SFO, now a major player on the field of anti-corruption enforcement, expects from companies both in terms of cooperation and remediation. That information may prove crucial for many multinational companies as U.K. enforcement continues to assert its dominance on the anti-corruption stage. See “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017) and “SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement” (Mar. 1, 2017).

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  • From Vol. 6 No.4 (Mar. 1, 2017)

    SFO Arrives in the Anti-Corruption Premier League With Rolls-Royce Settlement

    The U.K.’s Serious Fraud Office has struggled for legitimacy in recent years, with a limited number of enforcement actions under its belt and a shrinking budget. But its recent settlement with Rolls-Royce has established it as a force to be reckoned with in global anti-corruption enforcement. “The settlement catapults the SFO into the Premier League of global anti-bribery law enforcement,” said London-based Barry Vitou, head of Pinsent Masons’ corporate crime team. But is it sending mixed messages about the value of cooperation and self-reporting? For more on the settlement, see “Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption” (Feb. 15, 2017).

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  • From Vol. 6 No.3 (Feb. 15, 2017)

    Rolls-Royce Settlement Offers Lessons on How to Pay Commissions Without Corruption

    Rolls-Royce’s recent massive settlement with U.S., U.K. and Brazilian authorities is a stark reminder of the anti-corruption risks associated with intermediaries, agents and fixers when negotiating contracts with state-owned entities. Commissions paid by Rolls-Royce to its agents – including notorious oil-and-gas “solutions” provider Unaoil – often were eventually passed on to foreign officials to close deals, netting Rolls-Royce a global settlement for hundreds of millions of dollars. In this first article discussing the case, we look at the bribes Rolls-Royce paid, how its compliance program failed to prevent them and what companies can do to make sure that commissions paid to agents are not used improperly. In a second article, we will look at the implications for cooperative U.S. and U.K. enforcement and what the SFO is looking for in terms of cooperation and remediation. See “Bribery Act Experts Discuss the Impact of Brexit, DPAs and Other U.K. Developments” (Jul. 13, 2016).

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  • From Vol. 6 No.2 (Feb. 1, 2017)

    Tailoring Compliance Efforts to Address Challenges in India

    With a reputation for widespread bribery and corruption, India can be a challenging locale in which to do business. Direct foreign investment into the country is worth at least $55 billion, and a number of major multinationals have faced FCPA enforcement actions arising out of their operations there, observed Foley & Lardner partner David Simon at a program at the Society of Corporate Compliance and Ethics 15th Annual Compliance and Ethics Institute. Program panelists, including Laurel Burke, associate general counsel at Regal Beloit Corporation, and Sherbir Panag, a partner at MZM Legal based in Mumbai, addressed steps companies can take to avoid corruption in India, along with the unique challenges companies face as they develop effective compliance programs there. See “How to Recognize and Address FCPA Challenges in India” (Jun. 12, 2013).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    Top FCPA Officials Encourage Strong Compliance Programs and Remediation, the Defense Bar Responds

    A year after the DOJ hired an in-house counsel to assist with assessing companies’ compliance programs, top enforcers at the DOJ, as well as the SEC, are touting the importance of compliance in anti-corruption resolutions. At ACI’s 33rd International Conference on the FCPA, recently held in Washington, D.C., federal regulators discussed the role Hui Chen is playing at the DOJ, how proactive remediation can lead to less harsh settlement terms and what the continued focus on individual accountability means for companies and their executives. The FCPA Report spoke to defense counsel for their reaction to the government’s statements. For additional coverage of the government speakers at this year’s conference, see “Ceresney and Yates Continue to Stress Individual Accountability, Voluntary Reporting and Cooperation” (Dec. 7, 2016).

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  • From Vol. 5 No.24 (Dec. 7, 2016)

    A Guide to Enforcing Audit Rights, the Next Third-Party Management Frontier: Conducting an Onsite Audit (Part Two of Three)

    To protect themselves from anti-corruption violations caused by third-party partners, more and more companies are including audit rights in their third-party contracts. Those rights, however, are useless – and even potentially dangerous – if a company does not regularly enforce them. The FCPA Report’s three-part guide to enforcing audit rights is designed to assist companies in building and implementing effective third-party audit policies and procedures. The first article in the series discussed drafting the company’s policy and outlined six additional steps a company should take prior to conducting any onsite audits of third parties. This article lays out a plan for conducting the actual onsite audits, including 10 specific areas the audit should address. The third article in the series will tackle some of the challenges companies will face while auditing and outline measures companies should take after an audit is complete. See “EY’s Rick Sibery Outlines a Seven-Step Process for Monitoring Third Parties” (Oct. 20, 2016).

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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.22 (Nov. 9, 2016)

    A Guide to Enforcing Audit Rights, the Next Third-Party Management Frontier: What to Do Before an Audit (Part One of Three)

    While companies, recognizing the significance of third-party risk, have become increasingly sophisticated about vetting their business partners before an engagement, many still struggle with monitoring those relationships. Ongoing third-party management, including conducting regular third-party audits, is the next frontier in anti-corruption compliance. The FCPA Report’s three-part guide to enforcing audit rights is designed to meet companies where they are, helping them to tackle third-party audits while being mindful of the potential landmines inherent in the process. In this, the first article in the series, we discuss drafting third-party audit procedures and policies and outline seven steps a company should take prior to conducting an onsite audit of a third party. Upcoming installments of the series will discuss how to perform an onsite audit of a third party, address some of the challenges companies will face while auditing and outline measures companies should take after an audit is complete. See “EY’s Rick Sibery Outlines a Seven-Step Process for Monitoring Third Parties” (Oct. 20, 2016.) 

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  • From Vol. 5 No.22 (Nov. 9, 2016)

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

    The International Organisation for Standardisation, a worldwide federation of national standards bodies, recently released a standard for anti-bribery management systems – ISO 37001. The new standard sets forth requirements for such a program, as well as guidance for establishing, implementing, maintaining, reviewing and improving it. It is a fairly detailed document spanning a range of topics such as employment procedures, third-party due diligence, risk assessments, financial and non-financial controls, and internal audits. In a guest article, 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, discuss how companies can use the ISO to develop management tools such as key performance indicators (KPIs) and tracking metrics to address anti-corruption compliance. See “Developing Key Performance Indicators and Tracking Metrics for an Anti-Corruption Program” Part One (Feb. 24, 2016); Part Two (Mar. 9, 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.19 (Sep. 28, 2016)

    What Compliance Lessons Can Companies Learn From the SFO’s First Two DPAs?

    In July 2016, the U.K.’s Serious Fraud Office received court approval for its second-ever DPA. Both this DPA and the one before it, involving Standard Bank, are stark demonstrations of the fact that violating the U.K. Bribery Act can have serious and expensive ramifications not only for the offending company but also for others in its corporate group, even if they were unaware of the bribery. They also serve as another reminder of the dangers of using agents to win business. In a guest article, Matthew Getz and Prateek Swaika, partner and associate, respectively, at Boies, Schiller & Flexner, consider some of the lessons to be learned in this context, and what companies operating in the U.K. should do to avoid incurring liability when using agents to enter into contracts. See also “In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance” (Aug. 31, 2016).

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    Experts from PwC Discuss Compliance Audits and Common Missteps

    Compliance auditing is a critical component of an effective anti-corruption compliance program, recognized both by the U.S. Sentencing Guidelines and the government’s FCPA Resource Guide. A recent Strafford program, “FCPA Compliance Audits: Lessons From Recent Investigations,” discussed regulators’ expectations regarding compliance auditing, the process for scoping and conducting a compliance audit and common audit pitfalls. David A. Wilson, a partner at Thompson Hine, led the discussion, which featured Sulaksh Shah, a partner at PwC, and James Gargas, a director at that firm. This article discusses some of the key takeaways from the program. See also our interview series, “Best Practices for Performing Compliance Program Assessments: Pamela Passman of CREATe.org” (Apr. 6, 2016); “Susan Markel of AlixPartners” (Feb. 24, 2016); and “Jeffrey Kaplan of Kaplan & Walker” (Nov. 4, 2015).

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    Five Ways a Company Can Leverage Its Anti-Bribery Compliance Program to Facilitate Sanctions Compliance

    While often treated separately by companies, anti-bribery and sanctions compliance risks frequently intersect. Companies can ensure effective compliance with both types of regulations more efficiently, effectively and economically by combining certain knowledge and resources to jointly address these areas. In a guest article, Baker & McKenzie partner Ryan Fayhee and his associates Geoff Martin and Alexandre Lamy review how the jurisdictional reach and risks presented by anti-bribery and sanctions regulations tend to converge and suggest concrete ways that companies can leverage their anti-bribery compliance programs to facilitate sanctions compliance. Fayhee will also be sharing his thoughts on the topic at the upcoming SCCE Compliance and Ethics Institute in Chicago. See “Finding Synergies in OFAC and FCPA Compliance” (Nov. 19, 2014). 

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    TI Finds That Companies in Emerging Markets Need to Improve Transparency

    A recent survey by international anti-corruption watchdog Transparency International found that companies based in emerging markets are less transparent about their anti-corruption programs than large global companies. The study examined publicly available information from 100 emerging market companies regarding anti-corruption programs, organizational transparency and country-specific reporting of tax and financial information. This article summarizes the key takeaways from the study and TI’s recommendations. See “Ten Steps A Company Can Take to Mitigate Corruption Risk When Entering a New Market (Part One of Two)” (Jun. 24, 2015); Part Two (Jul. 8, 2015).

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  • From Vol. 5 No.15 (Jul. 27, 2016)

    Could Johnson Controls Have Prevented the Flagrant Circumvention of Its Revamped Compliance Program?

    Johnson Controls (JCI) has agreed to pay $14 million to resolve SEC charges that employees of its subsidiary China Marine undermined the company’s revamped internal controls systems to make payments to sham vendors. Nicholas Berg, a partner at Ropes & Gray, said that “the Chinese subsidiary’s employees appear to have engaged in a carefully orchestrated effort to evade those controls in a way that was extremely difficult to detect.” Notably, China Marine was being supervised by a monitor in connection with a prior FCPA settlement both at the time it was acquired by JCI and when the illicit actions occurred. The DOJ announced its decision not to prosecute by publicly releasing a letter it sent to JCI, the third such letter since the implementation of the Pilot Program. The settlement highlights compliance issues, including the proper design of risk-based controls and internal reporting incentives. It also raises enforcement questions such as how long a company can wait to self-report under the Pilot Program and whether the DOJ had a case against JCI. See “Using the FCPA Pilot Program’s Remediation Requirements to Build a Best-in-Class Compliance Program” (May 18, 2016).

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  • From Vol. 5 No.14 (Jul. 13, 2016)

    Treating Like Cases Alike – A Tool for Quantifying Compliance Issue Severity 

    As many practitioners in the compliance community will attest, a significant number of FCPA violations can come across their desk. How can a company ensure that possible FCPA violations are acted on consistently and equitably? In a guest article, Matt Herrington and Stephanie Wang of Steptoe & Johnson propose an analytical tool that allows companies to distill allegations regarding FCPA violations into certain quantifiable factors, allowing compliance officers to create a methodological approach to what investigative response should be taken in any given situation. Such an analysis makes it easier to identify similar allegations and act consistently and, in the event that the government ends up being involved, this severity analysis can help justify the actions taken by the company. Herrington and Wang demonstrate the use of their proposed tool with five hypotheticals and illustrative graphs. See also “Developing Key Performance Indicators and Tracking Metrics for an Anti-Corruption Program” Part One (Feb. 24, 2016); Part Two (Mar. 9, 2016).

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  • From Vol. 5 No.10 (May 18, 2016)

    Using the FCPA Pilot Program’s Remediation Requirements to Build a Best-in-Class Compliance Program

    The DOJ’s new pilot program, announced in April 2016, is designed to encourage companies to voluntarily self-disclose FCPA-related misconduct. Although the pilot program provides some greater clarity on the specific benefits that companies can receive through cooperation, the program’s guidance largely re-articulates much of what has already been known to FCPA practitioners – that self-disclosure, cooperation and remediation will be important factors determining an appropriate disposition for FCPA violations. But the program’s guidance under its “remediation” requirements is worth a closer look. In a guest article, Bill Jordan and Ted Kang, partners, and Kristen Kuan, an associate at Alston & Bird, draw on their experience interacting with the DOJ to detail how a company can use the new remediation requirements as well as other “best practice” guidance to build a best-in-class compliance program. See “DOJ Compliance Counsel Hui Chen Is on the Job and Looking for Key Aspects of Strong Compliance Programs” (Nov. 18, 2015).

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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.6 (Mar. 23, 2016)

    Travel and Entertainment Corruption Risks: Three Musts for a Strong T&E Policy and Five Ways a Company Can Customize Its Program (Part Two of Three)

    A strong travel and entertainment policy is the bedrock of a compliance program, but a policy that is overly complicated or doesn’t consider business realities may undermine a company’s compliance efforts. In this article, the second in a three-part series on travel and entertainment expenses, we explore three characteristics of a strong T&E compliance policy and five ways companies can customize their policy to their business. The first article in the series outlined five hallmarks of an acceptable T&E expense and the third article will investigate what internal controls a company needs to make sure that its program is functioning properly. See also “How to Build an Anti-Corruption Policy That Allows for Appropriate Business Gifts” (Sep. 19, 2012).

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  • From Vol. 5 No.5 (Mar. 9, 2016)

    Five Stages of Corruption and Myriad Internal Controls Failures: Compliance Takeaways From the VimpelCom Settlement

    VimpelCom’s historic settlement with U.S. and Dutch authorities was notable for many reasons, among them the enormous penalties and disgorgement paid and the DOJ’s attendant civil forfeiture suit. But beyond the settlement itself, which was discussed in the first part of this two-part article series, the underlying bribery scheme is noteworthy – and informative – as well. Over and over the company’s weak internal controls enabled employees to make corrupt payments to a government official in Uzbekistan. Here, we take a close look at the five stages of corruption that were outlined by the DOJ in its criminal information. The underlying facts show the mechanics of how corrupt payments can be made and how strong internal controls could have prevented them. See “Examining New DOJ Compliance Counsel Hui Chen’s Four Elements of a Successful Compliance Program” (Jan. 13, 2016).

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  • From Vol. 5 No.2 (Jan. 27, 2016)

    Former Prosecutor Nat Edmonds Discusses the Implications of the Recent Changes to the U.S. Attorneys’ Manual (Part Two of Two)

    The DOJ recently announced that it had revised its U.S. Attorneys’ Manual (USAM) to reflect the Department’s efforts to hold more individuals accountable for corporate criminal activity. Although the new guidelines may not represent a significant change in policy, even subtle shifts in the USAM language may affect how a company approaches anti-corruption compliance, former prosecutor Nat Edmonds, now a partner at Paul Hastings, told The FCPA Report. We share Edmond’s insights in this two-part series. See “How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)” (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 5 No.1 (Jan. 13, 2016)

    Creating Value in FCPA Investigations Through Increasing Cooperation Credit

    When payments to a third party with possible connections to the government are discovered in a high-risk market, what is a general counsel to do? This guest article, featuring a hypothetical narrative, tracks the trials and tribulations of a general counsel confronted with such an FCPA matter. Baker Donelson partner Joe Whitley and associate David Stewart provide specific advice about how a GC can successfully navigate an internal corruption investigation from the initial fact discovery to negotiating for sufficient resources to addressing collateral consequences. See Brockmeyer and Stokes Offer Four Benefits of Cooperation and Four Ways Companies Can Go Wrong in Their Internal Investigations” (Dec. 16, 2015).

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  • From Vol. 5 No.1 (Jan. 13, 2016)

    Examining New DOJ Compliance Counsel Hui Chen’s Four Elements of a Successful Compliance Program

    Hui Chen, the first-ever compliance counsel to the Fraud Section at the DOJ, described her new role as a “bridge between the compliance community and the prosecutors at the Fraud Section” in remarks at the ACI FCPA Conference shortly after she started at the DOJ in late 2015. The former prosecutor and compliance officer outlined the elements of a healthy compliance program that she will be looking for as she makes her assessments. The FCPA Report discussed these elements with experts who have both in-house and prosecutorial experience to determine the reasonableness of these expectations and what else companies need for a strong program. See “DOJ Compliance Counsel Hui Chen Is on the Job and Looking for Key Aspects of Strong Compliance Programs” (Nov. 18, 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.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.14 (Jul. 8, 2015)

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

    Expanding into new markets provides companies with unparalleled opportunities for growth, but establishing operations in a new location requires a company to navigate numerous corruption landmines.  The FCPA Report’s ten-step guide to mitigating corruption risk when entering a new market is designed to help companies create and implement an effective market-entry strategy.  This second article in the series discusses the final six steps: addressing logistical challenges; making disclosures to local governments; creating an integration plan; establishing a compliance program; implementing internal controls; and monitoring and reviewing that program.  The first article in the series addressed the first four steps, including 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.  See also “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.14 (Jul. 8, 2015)

    Addressing Corruption Risks and Compliance Strategies for Co-Investors (Part Two of Two)

    Considerable uncertainty can arise when parties co-invest alongside one another in the same entity, leading to an array of potential corruption and compliance risks.  Co-investor relationships can take many forms – from garden-variety joint venture partnerships, to investments with state-owned entities, to sophisticated private equity transactions – each with different risk profiles.  Adding to the complexity, the DOJ and the SEC expect co-investors to self-police for corruption, even while co-investors are often left in the dark about the contours of appropriate compliance and anti-corruption efforts.  In a recent Practising Law Institute event, experts with diverse perspectives from Goldman Sachs, Cerberus Capital, Gibson Dunn, WilmerHale and Ropes & Gray discussed the complications that can occur throughout the lifecycle of co-investor relationships.  This article, the second of two, discusses essential compliance provisions when formalizing the new venture; the challenges of holding a minority stake in a joint venture; and best practices for conducting an investigation if there is a corruption issue.  The first article described important due diligence steps for both the co-investor and the target to take before the transaction.  See also “FCPA Compliance in Non-Controlled Joint Ventures,” The FCPA Report, Vol. 3, No. 10 (May 14, 2014).

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  • From Vol. 4 No.14 (Jul. 8, 2015)

    PwC Report Offers Five Ways to Elevate the Role of the Compliance Function

    PricewaterhouseCoopers’ fifth annual State of Compliance survey offers five ways a compliance officer can elevate the compliance function in the organization.  This year’s survey report, “Moving Beyond the Baseline: Leveraging the Compliance Function to Gain a Competitive Edge,” analyzed the responses of over 1,100 compliance executives from 23 industry sectors.  For coverage of PwC’s 2014 survey, see “PwC Survey Examines the Role of the Compliance Officer,” The FCPA Report, Vol. 3, No. 14 (Jul. 9, 2014).

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  • From Vol. 4 No.13 (Jun. 24, 2015)

    FCPA Enforcement Officials and Defense Bar Advise on Anti-Corruption Compliance Policies

    What does the government really expect from a compliance program?  When will a company get cooperation credit?  These were among the questions tackled by FCPA experts in the private and public sectors during a recent program hosted by Practising Law Institute.  The panelists included Kara N. Brockmeyer, chief of the SEC’s FCPA Unit of the Division of Enforcement and Matthew S. Queler, an assistant chief in the Fraud Section of the DOJ’s Criminal Division.  Sharing the perspective of the defense bar were Kimberly A. Parker, a partner at WilmerHale; Jeffrey D. Clark, a partner at Willkie Farr & Gallagher and former Assistant U.S. Attorney in the District of New Jersey; and Mark F. Mendelsohn, a partner at Paul, Weiss, and former deputy chief of the Fraud Section of the DOJ’s Criminal Division.  A companion article, published in our last issue, contained the panelists’ discussion on hot topics such as international coordination of anti-corruption cases, a rising bar for cooperation credit and the availability of declinations.

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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.11 (May 27, 2015)

    Prosecutors and Defense Lawyers Discuss FCPA Risk Areas, Government Expectations and the Length of Investigations

    At ACI’s 9th Advanced Forum on FCPA and Anti-Corruption for the Life Sciences Industry, FCPA experts opined on enforcement for the second half of 2015 and the speed of government investigations, and warned that third parties and mergers and acquisitions still pose major risks.  The panel was moderated by Bret Campbell, a partner at Cadwalader, Wickersham & Taft, and included Daniel Kahn, assistant chief of the DOJ’s FCPA Unit and Timothy Peterson, a partner at Murphy & McGonigle and previously senior counsel in the SEC’s Division of Enforcement.  See also “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.10 (May 13, 2015)

    Deciphering the Chinese Anti-Corruption Landscape

    Corruption risk has loomed large for companies operating in China for a long time.  However, recent events may be changing the landscape there – both the aggressive FCPA enforcement by U.S. regulators and the well-publicized battle against corruption by the Chinese government may be having an impact.  A recent program sponsored by Clear Law Institute surveyed the current FCPA enforcement climate as it relates to China, discussed China’s internal anti-corruption efforts, and offered strategies for anti-corruption compliance in China.  The program featured Michael Diamant, a partner at Gibson Dunn.  See also “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); and “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.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)

    Top FCPA Officials Discuss Government Tactics and Lessons from Enforcement Actions

    At this year’s Momentum ACES Compliance Summit, high-ranking FCPA officials from the DOJ and SEC confirmed that active FCPA enforcement is continuing, and advised companies to read the public statements they release.  Tracy Price, Assistant Director of the SEC’s FCPA Unit, and Leo Tsao, Assistant Chief of the DOJ’s FCPA Unit also discussed cooperation, self-reporting and interagency collaboration. 

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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.6 (Mar. 18, 2015)

    Social Media: Navigating the Next Generation of FCPA Compliance (Part Two of Two)

    Social media can help and hurt compliance efforts – providing the opportunity to spread the compliance message and aid in due diligence efforts, but also potentially exposing the company to harm caused by inappropriate posts.  In this, the second article in our series on the advantages and pitfalls of social media, we discuss best practices for including social media in compliance policies, such as in training, messaging, and monitoring compliance programs; how social media use can help demonstrate good behavior to the government; and how to handle the risks that including social media as part of a compliance program pose.  The first article discussed how companies can use social media to aid with due diligence of third parties and target companies; the limits of using social media for those purposes; government expectations; and how to use social media during internal investigations.  See also “In-House Experts Discuss Social Media Pitfalls and Compliance Opportunities,” The FCPA Report, Vol. 3, No. 15 (Jul. 23, 2014).

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  • From Vol. 4 No.5 (Mar. 4, 2015)

    Social Media: Navigating the Next Generation of FCPA Compliance (Part One of Two)

    As employees spend more time personally and professionally posting on social media sites, companies urgently need to understand how to restrict such use to mitigate corruption risk while at the same time maximizing the compliance benefits social media can offer.  In this, the first article in our series on the advantages and pitfalls of social media, we discuss how companies can use social media to aid with due diligence of third parties and target companies; the limits of using social media for those purposes; government expectations; and how to use social media during internal investigations.  The second article will discuss: best practices for including social media in compliance policies, such as in training, messaging and monitoring compliance programs; how social media use can help demonstrate good behavior to the government; and how to handle the risks that including social media as part of a compliance program pose.  See “In-House Experts Discuss Social Media Pitfalls and Compliance Opportunities,” The FCPA Report, Vol. 3, No. 15 (Jul. 23, 2014).

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  • From Vol. 4 No.3 (Feb. 4, 2015)

    Compliance Experts Discuss Setting the “Tone in the Middle”

    In the realm of ethics and compliance, there is a great deal of emphasis on setting an appropriate “tone from the top.”  However, a lot can be lost in translation as that message reaches – or does not reach – the broader employee population.  One way to assure that that message reaches its intended recipients, and achieves its intended effect, is to have managers set an appropriate “tone in the middle.”  A recent program sponsored by the Society of Corporate Compliance and Ethics explained why setting the tone in the middle can help to achieve ethics and compliance goals and discussed strategies for setting that tone, as well as potential impediments to doing so.  The program featured Michael Levin, Senior Director of Compliance at Freddie Mac; and Kirsten E. Liston, an Associate Vice President of SAI Global Limited.  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. 4 No.2 (Jan. 21, 2015)

    Guide to Creating an Effective Compliance-Based Employee Incentive Program (Part Two of Two)

    An employee incentive program that provides effective disciplinary measures for compliance missteps and incentives for positive behavior is one of the “hallmarks of an effective compliance program,” according the DOJ/SEC FCPA Resource Guide.  To assist companies in creating such a program and determining the optimal positive and negative incentives, The FCPA Report is publishing a best-practices guide to developing and implementing an incentive program that works.  This, the second article in the series, discusses the carrots and sticks a company can use to encourage compliant behavior.  The first article in the series discussed the risks and benefits of incentivizing compliance, outlined three steps a company should take before creating an incentive program, and discussed how a company should measure compliance.  See also “When, Why and How Should Companies Discipline Employees for FCPA Violations?,” The FCPA Report, Vol. 1, No. 8 (Sep. 19, 2012). 

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  • From Vol. 4 No.1 (Jan. 7, 2015)

    Guide to Creating an Effective Compliance-Based Employee Incentive Program (Part One of Two)

    Companies with established and nascent FCPA programs alike are looking for ways to further enhance a compliant culture for their employees.  The creation of an effective compliance-based employee incentive program that both encourages compliant behavior and demonstrates the company’s compliance commitment is a “cutting edge issue” with which more and more companies are grappling, Lucinda Low, a partner at Steptoe and Johnson, told The FCPA Report.  To assist companies as they consider and develop such a program, The FCPA Report is publishing a best-practices guide to creating and implementing an efficient and effective incentive program.  In this, the first part of the guide, we discuss the risks and benefits of incentivizing compliance, outline three steps a company should take before creating an incentive program, and discuss how a company should measure compliance.  The second article in the series will discuss how companies can review the compliance-related activities of its senior and middle management and will provide suggestions for carrots and sticks a company can use to encourage compliant behavior.  See also “When, Why and How Should Companies Discipline Employees for FCPA Violations?,” The FCPA Report, Vol. 1, No. 8 (Sep. 19, 2012).

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  • From Vol. 3 No.24 (Dec. 3, 2014)

    Strategies for Justifying Compliance and Ethics Budgets

    Functions that do not directly impact the bottom line may be neglected when a corporation plans its budget.  Compliance and ethics in particular can be seen as a necessary evil, rather than as an integral part of a successful business.  A recent presentation at the 2014 Compliance & Ethics Institute, sponsored by the Society of Corporate Compliance and Ethics, explored how a compliance and ethics department can demonstrate its value to an organization and make it easier to secure sufficient funds to operate effectively.  The program featured Julie K. Moriarty, General Manager, Training and Communications Strategy, and Jimmy Lin, Vice President of Product & Corporate Development at governance, risk and compliance consulting firm The Network, Inc.  See also “CEB Analyzes Key Compliance and Ethics Data,” The FCPA Report, Vol. 3, No. 20 (Oct. 8, 2014).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Compliance Experts from Altria, Noble Energy and HP Share Corruption Investigation Best Practices

    A recent American Bar Association program brought together compliance executives from several public corporations to discuss how to both satisfy the client and mollify the government during an anti-corruption investigation – no easy task.  The panelists, along with moderator Mara V.J. Senn, a partner at Arnold & Porter, shared insights and experiences on preparedness for internal investigations, the role of outside counsel, the calculus of voluntary disclosures and a number of other common issues faced by companies conducting internal investigations.  For more from Senn on internal investigations, see “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); and “Developing and Implementing the Investigation Plan (Part Two of Two),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014).  

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  • From Vol. 3 No.17 (Aug. 20, 2014)

    Six Steps to Revitalize the Company Compliance Code

    A compliance program begins with the written code the company distributes to employees.  The code, the foundation of the compliance program, needs to be accessible, educational and of-the-moment.  In a recent panel at Practising Law Institute’s Corporate Compliance and Ethics Institute, compliance experts shared six strategies for revising company codes.  The panel included Kaplan & Walker’s Rebecca Walker; Janice Innis-Thompson, Senior Managing Director and Chief Compliance and Ethics Officer at TIAA-CREF; and Edward Petry, Vice President of Ethical Leadership Group, the Advisory Services division of Navex Global.  See also “A Comparison and Examination of DOJ Compliance Program Requirements in FCPA Settlement Agreements,” The FCPA Report, Vol. 2, No. 19 (Sep. 26, 2013).

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  • From Vol. 3 No.17 (Aug. 20, 2014)

    Compliance Experts from AT&T and Southern Co. Share Anti-Corruption Auditing and Assessment Best Practices

    Key compliance personnel at two major public companies recently shared their insights on the best ways to monitor and assess compliance programs.  At a panel at PLI's 2014 Corporate Compliance and Ethics Institute, James R. Turner, compliance director at Alabama Power Company, a subsidiary of Southern Company, and Kathy Rehmer, Vice President of Corporate Compliance at AT&T, discussed how their companies perform audits and routine testing of their compliance programs. See also The FCPA Report’s three-part series, “Best Practices for Reviewing Anti-Corruption Compliance Programs”: Government Expectations, Scheduling and Staffing; Challenges, Preparation and Risk Evaluation; and Implementation, Remediation and Documentation.

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  • From Vol. 3 No.17 (Aug. 20, 2014)

    The FCPA Report Will Not Publish on September 3, 2014

    Please note that The FCPA Report will not publish its regularly scheduled issue on September 3, 2014, due to the Labor Day holiday.  It will instead publish the following week, on September 10, and resume its regular biweekly schedule thereafter.

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  • From Vol. 3 No.14 (Jul. 9, 2014)

    PwC Survey Examines the Role of the Compliance Officer

    In today’s rapidly changing business environment, continually benchmarking and assessing compliance procedures is integral to maintaining a robust program.  PricewaterhouseCooper’s 2014 State of Compliance Survey Report depicts the state of compliance programs and provides compliance insights, including three ways CCOs can improve their relationships with the business units.  The survey also reveals how companies are using social media, how much they are spending on compliance, how they are structuring reporting lines and more.  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.12 (Jun. 11, 2014)

    Measuring the Efficacy of Ethics and Compliance Programs

    What exactly makes one anti-corruption compliance program effective and another, that appears to have the same elements, fail to detect and prevent violations?  “It’s all about the culture,” Wayne Brody, a senior advisor at LRN, an ethics and culture advisory firm, told The FCPA Report.  That culture is not intangible, Brody said – effective programs share certain characteristics.  In its 2014 “Ethics and Compliance Program Effectiveness Report,” LRN detailed the results of its extensive research, extracting the factors most commonly associated with an effective compliance program by using its proprietary Program Effectiveness Index.  See “Anonymous Polling, Focus Groups and ‘Organizational Justice’ Help Companies Avoid FCPA Violations While Growing Revenue,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

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  • From Vol. 3 No.12 (Jun. 11, 2014)

    Doing Business in India: Avoiding Corruption Risks and Monitoring Compliance Programs

    India presents companies not only with tremendous business opportunities but also an entrenched culture of corruption at virtually every government “touchpoint.”  Strafford Publications recently hosted a panel discussion highlighting some of the unique challenges facing companies trying to navigate India’s notorious bureaucracy.  The discussion examined FCPA cases with Indian connections as well as the anti-corruption enforcement climate in India and offered guidance on third-party due diligence and on monitoring the effectiveness of an anti-corruption compliance program.  The panel featured Jay Holtmeier, a partner at Wilmer Hale; Elizabeth D. Keating, Global Compliance Counsel – Investigations of Johnson Controls, Inc.; and Michael Stavridis, a partner at Ernst & Young.  See also “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. 3 No.10 (May 14, 2014)

    Compliance Leaders from Citigroup and Morgan Stanley Examine FCPA Risks and Solutions for Financial Institutions

    Banks and other financial institutions are subject to constant regulatory scrutiny.  Given their global reach and government touchpoints, they face constant challenges in assuring compliance with the FCPA.  At a recent program sponsored by the New York City Bar Association, Chinwe Esimai, Senior Vice President of Global Anti-Bribery & Corruption at Citigroup Inc. and Morgan Heyer, Executive Director and Global Head of Anti-Corruption Group Compliance at Morgan Stanley, considered the most pressing FCPA risks in their industries (including the recent government inquiries into banks’ hiring practices) and how their companies are handling those risks.  The panel was moderated by Kimberly A. Parker, a partner at Wilmer Hale and Claudius O. Sokenu, a partner at Shearman & Sterling.  See “How Can Financial Services Firms and Employees Avoid FCPA Liability?,” The FCPA Report, Vol. 2, No. 16 (Aug. 7, 2013).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Weak FCPA Compliance Program and Lack of Cooperation Cited in Marubeni’s $88 Million Guilty Plea

    Resolving its second FCPA enforcement action in just over two years, Japanese-based Marubeni has pled guilty to charges related to payments it made, in concert with its consortium partner French power company Alstom SA, to Indonesian government officials in exchange for a $118 million contract to provide power in that country.  The agreement highlights the broad jurisdictional and temporal reach of the FCPA and includes $88 million in fines, above the minimum Sentencing Guidelines range.  The acts at issue predate Marubeni’s 2012 Deferred Prosecution Agreement with the DOJ to resolve charges it bribed Nigerian officials for energy contracts.  See also “Bilfinger Settlement Highlights the Long Tail and Loose Jurisdictional Requirements of Criminal FCPA Charges,” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013). 

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  • From Vol. 3 No.5 (Mar. 5, 2014)

    Troubled SNC-Lavalin Appoints New CCO

    SNC-Lavalin, the Canadian construction and engineering giant, has been mired in corruption allegations and charges for years.  Many of its executives face corruption charges and many of its affiliates are included on the World Bank debarment list.  Among its continuing efforts to turn the page on these scandals, the company recently appointed a new CCO, David Wilkins.  The FCPA Report examines that appointment, SNC-Lavalin’s corruption troubles and some of the steps it has taken to fix them.  See also “Doing Business with the World Bank: Understanding and Avoiding Debarment,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    Corruption Risk and the Changing Legal Climate in Latin America

    Although Latin American countries offer a tremendous wealth of business opportunities, the region is a potential minefield of corruption risks, perilous to navigate.  A recent webinar hosted by Strafford Publications discussed the dynamic enforcement climate, risks endemic to the region, an overview of recent and pending changes in local anti-corruption laws (including the newly-enacted law in Brazil) and provided advice on how to optimize compliance programs for the region.  The program featured Jay Holtmeier, a partner at WilmerHale; Matteson Ellis, Special Counsel at Miller & Chevalier; and Matthew J. Feeley, a Shareholder in Buchanan Ingersoll & Rooney.  See also “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. 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.22 (Nov. 6, 2013)

    Gifts, Travel, Entertainment and Anti-Corruption Compliance: Sources of Authority, Best Practices and Benchmarking

    FCPA experts report that gifts, travel and entertainment expenses are one of the most asked-about areas in anti-corruption compliance and the answers can be surprisingly hard to come by.  A recent Strafford webinar provided experienced practitioners’ insights into navigating the potentially perilous shoals surrounding these expenses.  The program, “FCPA Gifts, Entertainment and Hospitality: Surviving Heightened Enforcement,” featured Margaret M. Cassidy, a principal at Cassidy Law in Washington, D.C., and John E. Davis, a member of law firm Miller & Chevalier.  Cassidy and Davis discussed available sources of guidance on gifts, travel and entertainment expenses, sources of guidance for benchmarking compliance controls and insights on implementing effective policies with regard to gifts, travel and entertainment.  This article summarizes the key takeaways from that presentation.  See “Ten Strategies for Paying for Government Clients to Attend the Olympics or Other Sporting Events without Violating the Foreign Corrupt Practices Act,” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    Checklist of Actions to Take and Issues to Consider When Navigating Data Privacy and Anti-Corruption Issues

    Investigating a potential FCPA violation almost invariably entails cross-border discovery because U.S. companies need data housed overseas.  While trying to please U.S. regulators in obtaining information relevant to suspected bribes both in the context of internal investigations and due diligence of another company, however, companies often find themselves at the risk of violating the strong data privacy laws enacted in many countries across the globe.  To minimize conflicts, companies must educate themselves about data privacy, plan ahead and act strategically.  This checklist can serve as a guide to help companies comply with data privacy laws when conducting cross-border anti-corruption or other investigations, and when engaging in common compliance activities.  The checklist highlights data privacy issues that companies should consider and actions they should take prior to the development of an FCPA issue, during an investigation and during due diligence.  For more on the interaction between data privacy and anti-corruption laws, see The FCPA Report’s Data Privacy Series: "Conflicting Compliance Obligations: How to Navigate Data Privacy Laws While Performing Internal Investigations and Promoting FCPA Compliance in the E.U. (Part One of Three),” The FCPA Report, Vol. 2, No. 1 (Jan. 9, 2013); Part Two Of Three, Vol. 2, No. 2 (Jan. 23, 2013); Part Three of Three, Vol. 2, No. 3 (Feb. 6, 2013).

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  • From Vol. 2 No.19 (Sep. 26, 2013)

    Checklist of Actions to Take and Factors to Consider When Conducting Pre-Merger Anti-Corruption Due Diligence 

    Anti-corruption issues can undermine a merger or acquisition that otherwise would be successful on the economic merits.  Consequently, FCPA due diligence has become a critical component of overall M&A due diligence, and such diligence is not complete before comprehensive FCPA due diligence has been conducted on the target company.  But what constitutes comprehensive FCPA due diligence in connection with a transaction?  What high-level areas should acquirers or merger partners investigate?  What specific questions should they ask, and what should cause them to drill down and ask hard follow-ups?  Perhaps most importantly, what issues should cause a company to walk away from an otherwise meritorious transaction?  This checklist, drafted by Michael Gilbert and Mauricio España, partners at Dechert LLP, addresses these questions, and in the process, helps define the scope and increase the precision of transactional FCPA due diligence.  For more from Gilbert and España on this subject, see “Critical Steps to Take and Questions to Ask When Conducting Pre-Merger Anti-Corruption Due Diligence,” The FCPA Report, Vol. 1, No. 5 (Aug. 8, 2012).

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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.16 (Aug. 7, 2013)

    How Can Financial Services Firms and Employees Avoid FCPA Liability?

    The financial services industry has come under increasing scrutiny by the government in various areas, including anti-corruption.  See “Buyer Beware: Understanding and Mitigating Parent Company FCPA Liability in the Context of Private Equity Acquisitions,” The FCPA Report, Vol. 2, No. 15 (Jul. 24, 2013).  In May, for example, the DOJ and SEC brought charges against individuals at a broker-dealer alleging that the individuals paid bribes in connection with sales of financial services.  See “FCPA Charges against Broker-Dealer Stemming From Routine SEC Examination Is ‘Wake-Up Call’ to the Financial Services Industry,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).  Given this increased attention from the government, how can principals and employees of private equity firms, hedge fund managers, broker-dealers and other financial services firms – as well as their principals and employees – protect themselves?  What are the chief risk factors and the most effective precautions?  During a recent program hosted by Strafford Publications, Inc., Lara Covington, special counsel at Schulte Roth & Zabel LLP, addressed these and other questions.

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  • From Vol. 2 No.14 (Jul. 10, 2013)

    Russian Risks: Reconciling the Novo Nordisk Standard with the FCPA

    The central challenge faced by any corporation seeking to address the risks of corruption is to understand where its risks lie and what tools it can employ to mitigate those risks.  Typically, those areas presenting the greatest risk of corruption will call for correspondingly strong anti-corruption tools.  This challenge may be even greater for companies doing business in Russia, where they must not only confront the challenges of the Russian business environment but also may be forced to do so without many of the anti-corruption tools normally at their disposal.  In a guest article, Joseph Terry, partner at Williams & Connolly LLP, and Jessica Hayden, former associate at Williams & Connolly, discuss the Russian business environment and the challenges posed by the so-called “Novo Nordisk Standard” – set after the Russian Federal Antimonopoly Service found that Novo Nordisk’s anti-corruption diligence program violated Russian competition law – and present topics for companies to consider when designing a compliance program that protects against corruption risks in Russia.  See also “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).

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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)

    Top FCPA Practitioners Share Strategies for Detecting, Preventing and Responding to Whistleblower Allegations

    Organizations operating internationally are exposed to seemingly endless sources of complainants – employees, former employees, third-party sales agents, suppliers, distributors and even competitors could potentially become whistleblowers.  How, in such an environment, does a company decrease the likelihood that it will be the subject of a whistleblower complaint?  Corporate whistleblowers remain one of the top concerns of companies subject to the FCPA.  That concern is fueled by the recent implementation of the Dodd-Frank Act’s reward program, which awarded its second money prize on June 12, 2013 to whistleblowers who provided information about a “sham” hedge fund and its chief executive.  Experts predict that more awards are soon to follow.  During two recent panels – one held at the American Bar Association’s Fifth Annual National Institute on Internal Corporate Investigations and Forum for In-house Counsel, and the other at the Practising Law Institute’s Foreign Corrupt Practices Act and International Anti-Corruption Law Developments 2013 program – FCPA practitioners discussed strategies for identifying, preventing and addressing whistleblower allegations.  See also “Specific Strategies from Pfizer, Barrick Gold and Other Leading Companies for Handling Actual and Potential FCPA Whistleblowers,” The FCPA Report, Vol. 1, No. 11 (Nov. 7, 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.8 (Apr. 17, 2013)

    Parker Drilling DPA Provides a Checklist of Policies and Procedures That the DOJ Expects to See in an FCPA Compliance Program

    Parker Drilling Company, a Houston-based, publicly traded drilling company, has resolved civil and criminal FCPA charges pursuant to a Deferred Prosecution Agreement (DPA) in which the government emphasizes specific elements of compliance programs, policies and procedures, and demonstrates its increased reliance on self-reporting mechanisms in lieu of external monitors.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  The charges resulted from Parker Drilling’s authorization of payments to an intermediary that Parker Drilling knew would be used to corruptly influence the decisions of a Nigerian government panel reviewing the company’s adherence to Nigerian customs and tax laws.  In addition to discussing the facts and circumstances relevant to the granting of the DPA, and providing details of the Nigerian bribery scheme, this article includes a detailed discussion of the specific ways in which the DPA requires Parker Drilling to enhance its FCPA compliance program.  The various required enhancements serve as a checklist of what the DOJ expects to see in an FCPA compliance program – and thus serves as an important benchmark against which companies can compare their own compliance efforts.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    A Guide to Anti-Bribery Issue Spotting in China: Enforcement Trends, Third-Party Risks, Gift Giving, Travel Expenses, Foreign Officials and Due Diligence

    Recent news reports, such as the downfall of Bo Xilai, as well as reports of watchdog groups such as Transparency International, emphasize the heightened corruption risk that companies doing business in China face.  Not only does the Chinese culture value gift giving and relationship building, but, because of the government structure, a large proportion of employees there are foreign officials.  This increases the range of business activity that may give rise to FCPA liability.  Plus, China’s top leaders have been paying more attention to official corruption and have taken steps to strengthen their own laws against bribery and step up enforcement.  A recent webinar focused on the topic of Chinese corruption risk.  The panelists, partners at Gibson Dunn & Crutcher LLP and Herbert Smith Freehills LLP, discussed: the current state of anti-corruption law and enforcement in China; China-specific anti-corruption issues; FCPA enforcement actions stemming from bribery in China; and ways to mitigate the FCPA risks of doing business there.  This article summarizes the key takeaways from the webinar, focusing in particular on the lessons for companies that do business in China and lawyers that represent such companies.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    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

    In a recent panel discussion held at the New York City Bar, Kara Brockmeyer, Chief of the SEC’s FCPA Unit, and Mark Schonfeld, a partner at Gibson Dunn & Crutcher LLP, discussed the SEC’s role in civil FCPA enforcement from a private and public perspective.  The panel was moderated by Wayne Carlin, a partner at Wachtell, Lipton, Rosen & Katz.  The three experts shared useful insights regarding managing the costs of FCPA investigations, creating strong compliance programs, negotiating with the SEC and deciding whether to voluntarily disclose a violation to the government.

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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.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.2 (Jan. 23, 2013)

    JPMorgan Chase Anti-Money Laundering Consent Orders Highlight the Role of Risk in Structuring Compliance Programs

    On January 14, 2013, JPMorgan Chase Bank, N.A., JPMorgan Bank and Trust Company, N.A., and Chase Bank USA, N.A. (together, the Banks) and their parent holding company, JPMorgan Chase & Co. (JPMC), entered into a consent order with the Office of the Comptroller of the Currency of the United States (OCC) and a separate consent order with the Board of Governors of the Federal Reserve System (Fed).  The orders follow regulatory examinations of JPMC and the Banks occasioned by JPMC’s revelation that one of its traders, Bruno Iksil, known in the industry as the “London Whale,” made huge derivative bets that cost JPMC billions.  While the consent orders primarily focus on shortcomings in JPMC’s anti-money laundering efforts and how those efforts may be improved, they more generally espouse the view – apparently shared by the SEC and DOJ in their FCPA enforcement programs – that compliance efforts should be risk-based.  See “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).  This article describes the orders in detail.

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  • From Vol. 2 No.1 (Jan. 9, 2013)

    How Private Fund Managers Can Manage FCPA Risks When Investing in Emerging Markets

    Anti-corruption enforcement efforts have dramatically increased over the last few years.  Every day it seems there is a new headline about an investigation involving alleged violations of the FCPA.  Federal authorities have indicated that their FCPA enforcement efforts are increasingly focused on the financial services industry and, in particular, private fund managers that invest in emerging markets.  Given this heightened level of government scrutiny, it is important that private equity firms, hedge fund managers and other investors that conduct business in foreign markets understand the associated FCPA risks.  Such risks can arise in the context of raising funds overseas, working with joint venture partners and third party agents, and investing in companies that operate in countries known for corruption.  A potential misstep in these areas can result in a fund manager and its employees facing significant civil penalties and possible criminal prosecution or, at a minimum, having to respond to government subpoenas or requests for information in connection with an investigation by federal authorities, thus resulting in the unnecessary expenditure of time and money and the attraction of unwanted attention.  In a guest article, Justin V. Shur and Joel M. Melendez, partner and associate, respectively, at Molo Lamken LLP, consider some of the important and recurring FCPA risks that arise for investors in emerging markets, and offer practical guidance to help private fund managers and their employees avoid or minimize liability in this area.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Comprehensive FCPA Guidance Provides a Roadmap for Companies to Reevaluate and Revise Their Compliance Policies

    On November 14, 2012, the DOJ and SEC jointly published “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (Guidance), their long-awaited and highly anticipated guidance on the FCPA.  The Guidance did not pronounce any new defenses or radically reinterpret any of the FCPA’s provisions, but it does provide useful insights into the government’s enforcement considerations and should serve as a roadmap for companies to reevaluate and revise their FCPA compliance policies.  In a guest article, Paul E. Pelletier and Aaron M. Tidman, member and associate, respectively, at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., analyze the guidance and outline how practitioners may use the guidance to update their compliance policies and procedures.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    DOJ and SEC Officials Provide Candid Insight into the Recently Issued FCPA Guidance

    On November 14, 2012, the DOJ and the SEC provided unprecedented guidance on the FCPA, releasing a Resource Guide to the Foreign Corrupt Practices Act (Guide or Guidance).  See “DOJ and SEC Jointly Issue Long-Awaited Guidance on the FCPA,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012) and the articles analyzing the Guide in this issue of The FCPA Report.  Two days later, at the American Conference Institute’s 28th Annual Conference on the Foreign Corrupt Practices Act, top officials from the DOJ and the SEC addressed the FCPA community.  In what moderator Homer Moyer, member at Miller & Chevalier Chartered, described as an “impressive exercise in transparency,” Charles Duross, the Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC and Jeffrey Knox, Principal Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, answered the legal and business community’s most pressing questions about the Guidance.  Topics addressed included: reasons for providing the Guidance; whether companies should rely on the Guidance; a company’s potential liability for the acts of a foreign subsidiary; successor liability under the FCPA; gifts and entertainment; definition of the term “foreign official”; corporate compliance programs; and corporate criminal liability.  This article relays the officials’ most noteworthy points on each of the foregoing topics.

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  • From Vol. 1 No.12 (Nov. 14, 2012)

    Finding Clarity in the New U.K. Bribery Act

    The U.K.’s Ministry of Justice has added another tool to its arsenal – like the U.S., it intends to use Deferred Prosecution Agreements (DPAs) for cases of economic crime, following a recent consultation and the overhaul of U.K. Bribery laws in July of last year.  That overhaul replaced elderly bribery laws regarded as ineffective to prosecute modern cases.  The new Bribery Act 2011 (Act) provides a consolidated scheme of offences and, unlike the FCPA, applies to bribery in both the public and private sectors.  Law enforcement agencies in the U.K. had two main mechanisms to deal with bribery and other economic crime by companies: criminal prosecution (followed by confiscation of illicit assets), or civil recovery under legislation which enables prosecutors to make a claim against a company to recover the proceeds of criminal conduct.  DPAs will offer a third option.  In a guest article, James Maton, a partner in Edwards Wildman Palmer UK LLP’s London office, provides details about the provisions of the Act and guidance issued by the U.K., and the government’s new policy on DPAs.  A forthcoming article in The FCPA Report will address specific actions companies can take in light of this new enforcement landscape in the U.K.

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  • From Vol. 1 No.11 (Nov. 7, 2012)

    The FCPA Report Publishes Special Issue Primarily Dedicated to Coverage of the ABA’s Fifth Annual National Institute on the Foreign Corrupt Practices Act

    From October 17-19, 2012, the American Bar Association hosted the Fifth Annual National Institute on the Foreign Corrupt Practices Act in Washington, D.C.  This event brought together in-house counsel, law firm partners and other thought leaders whose practices or job descriptions regularly bring them into contact with the FCPA, the U.K. Bribery Act and other global anti-bribery regimes.  Panels at the Institute covered a wide range of relevant topics and identified current best practices on many of the most difficult questions facing anti-bribery professionals.  In light of the concentration of talent at the Institute, the depth of insight of participants and the fact that many professionals concerned with the topics discussed were not able to attend, we are publishing a special issue of The FCPA Report primarily dedicated to deep coverage of selected panels at the Institute.  Specifically, the first four substantive articles in this issue discuss, respectively, the interaction between corporate social responsibility regulation and FCPA compliance; trends in SEC enforcement of the FCPA and strategies for negotiating civil FCPA settlements; strategies from Pfizer, Barrick Gold and other leading companies for handling actual and potential FCPA whistleblowers; and litigation, settlement and risk management lessons learned from recent FCPA trials.  In addition to our coverage of the ABA Institute, this issue also includes an article on a recent survey by Kroll Advisory Solutions identifying global fraud trends and risks in Europe, the Middle East and Africa, as well as an article on two recent speeches by Assistant Attorney General Lanny Breuer discussing deferred prosecution agreements, civil forfeiture and FCPA enforcement against individuals.

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  • From Vol. 1 No.11 (Nov. 7, 2012)

    The New Landscape of Corporate Social Responsibility Regulation and Its Overlap with FCPA Compliance

    New legislative demands on companies go beyond just prohibiting bribery to impose broader social responsibility, such as certifying that their products were not made with child labor, that their employees and supply chain partners did not engage in any trafficking-related activities, and others.  A broad anti-corruption program can incorporate social responsibility and supply chain issues as well as FCPA and anti-bribery elements, as many of the risk areas and bad actors – third parties especially – overlap.  This article – based on a panel at the ABA’s Fifth Annual FCPA Institute in Washington, D.C. on October 19, 2012, as well as independent research – discusses the current international landscape of Corporate Social Responsibility (CSR) laws around the world; the potential tension between CSR and bribery laws; how CSR and FCPA violations overlap; how companies can adapt their FCPA compliance programs to integrate CSR and broader corruption issues; and the likely ways in which the new CSR laws will be enforced.

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  • From Vol. 1 No.9 (Oct. 3, 2012)

    LeClairRyan Webinar Highlights Ten Anti-Corruption Risks for Pharmaceutical and Medical Device Companies and Outlines the Elements of an Effective FCPA Compliance Program

    On September 19, 2012, Michael Volkov, a partner at LeClairRyan, hosted a webinar entitled “Anti-Corruption Risks for Pharmaceutical and Medical Device Companies.”  Volkov provided an overview of current trends in enforcement of the FCPA in the pharmaceutical and medical device industries and identified risk factors in FCPA compliance.  He also identified best practices associated with avoiding each risk factor and outlined the basic elements of a successful FCPA compliance program.

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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.8 (Sep. 19, 2012)

    How to Build an Anti-Corruption Policy that Allows for Appropriate Business Gifts

    What is a multinational company to do when there are government officials who are open to accepting bribes, or when multinational companies operate in countries where gift-giving, even to government officials, is culturally accepted and potentially could appear as a bribe?  In a guest article, Suzanne Rich Folsom and Victoria McKenney of ACADEMI LLC address these critical business questions and offer 14 gift-giving suggestions to consider incorporating in a corporate anti-corruption policy.

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  • From Vol. 1 No.7 (Sep. 5, 2012)

    Six Compliance Lessons from the 2012 Latin America Corruption Survey

    A recent survey of companies spanning 14 countries throughout the Americas, organized by U.S. law firms Miller & Chevalier Chartered and Matteson Ellis Law PLLC along with 12 Latin American law firms, provides insight into corruption issues in the region.  Four hundred and thirty nine respondents from local, regional and multinational companies completed the 2012 Latin America Corruption Survey.  The results offer perspectives on the extent of corruption in Latin American countries, the effects of corruption on companies operating in those countries, the effectiveness of regional anti-corruption laws, and tools that companies are using to address corruption risks.  For a summary of the survey, see “Miller & Chevalier and Matteson Ellis Law’s 2012 Latin American Corruption Survey Results Shows Increasing Awareness of the FCPA,” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).  In a guest article, James Tillen and Matteson Ellis provide additional analysis that will be useful to compliance personnel when they are evaluating the effectiveness of their compliance programs in Latin America.  In particular, Tillen and Ellis highlight four themes of the results and six corresponding takeaways from the survey findings for compliance officers.  Tillen is Coordinator of Miller & Chevalier’s FCPA and Anti-Corruption Practice Group, and Ellis is Principal of Matteson Ellis Law and writes the FCPAméricas Blog.

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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.4 (Jul. 25, 2012)

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

    The FCPA prohibits bribes to foreign officials, but the statute carves out an exception for bribes that facilitate or expedite a foreign official’s routine tasks.  The U.S. stands nearly alone on the global stage with this exception, yet no changes to the law are in view.  In 2010, Chuck Duross, Assistant Chief in the DOJ Criminal Division’s Fraud Section, said, “We’re not saying you should make facilitating payments, it’s an exception, we’re not encouraging it.”  The tide, strengthened after passage of the U.K. Bribery Act, has been turning against facilitation payments, and more and more companies have begun to rethink allowing any kind of “grease” payment at all.  Compounding the trend are the high-profile troubles of Wal-Mart, in which one prominent issue is whether certain payments constitute bribes or facilitation payments under the FCPA.  The reasons to ban facilitation payments outright are plenty, a significant one being the conflict of laws: Not only do most countries ban these kinds of payments to foreign officials, but most local laws ban these kinds of payments to domestic officials, subjecting the company that makes such a payment to potential prosecution abroad even if the payment is legal under U.S. law.  Further complicating the picture is the need to properly record the facilitation payments or risk an FCPA books and records violation.  Moreover, there is the challenge of employees on the ground determining whether an official receiving a grease payment is using “discretion” or not – that is, determining whether the same dollars are a bribe or a facilitation payment.  Prohibiting facilitation payments completely, however, may not be feasible.  Sometimes the safety of a company’s workers depends on such a payment; sometimes foregoing the payment will shut down the entire business; and sometimes the payment truly is a small payment to expedite a routine government service.  Designing and implementing a policy that protects a company from liability yet is flexible enough to accommodate extenuating circumstances is a difficult task.  This two-part article series takes on that task and sheds light on the nuances of this issue, providing insight from leading practitioners on how to formulate a workable compliance policy on facilitation payments.  Part one of this series discusses: 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 towards banning facilitation payments outright.  Part two of the series will address: advisable “safety valves” or exceptions to a general ban on facilitation payments; drafting and implementing a facilitation payment policy to accommodate those exceptions and avoid liability; concerns relating to the all-important issue of properly recording facilitation payments; and guidance on training employees about facilitation payments.

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  • From Vol. 1 No.4 (Jul. 25, 2012)

    Corruption and the Arab Spring: Compliance Implications for International Companies

    To paraphrase Mao, a revolution, not being a dinner party, is a messy and unpredictable affair with winners and losers emerging in chaotic and sometimes haphazard fashion.  For international investors and businesses, the prospects are rarely bright, at least in the near term.  Foreign commercial interests were notable losers in some of the last century’s most important revolutions.  During the Russian Revolution, foreign investors lost their wallets; in Cuba, Americans lost their sugar and their casinos; and after the Islamic revolution in Iran, international oil companies lost their wells.  The recent wave of Arab Spring upheavals that continues to ripple across the southern and eastern shores of the Mediterranean may present the threats common to foreign businesses caught in the midst of revolution, including extortion, nationalization, expropriation, and physical violence against executives and employees.  These modern revolutions also pose new challenges to international firms, as evidence or allegations that they engaged in corrupt behavior may be made public through documents in a ransacked government ministry building, or through an incarcerated former official, an enterprising journalist or prosecutor in the new regime, or a whistleblower within the foreign company itself.  If such allegations come to the attention of U.S. authorities or other governments, the company could face severe criminal and civil penalties for violations of the FCPA, the U.K. Bribery Act, and similar anti-corruption laws, in addition to significant business ramifications.  In a guest article, Peter B. Clark and Bradley J. Bondi, both partners at Cadwalader Wickersham & Taft LLP, and James A. Treanor, an associate at Cadwalader, provide a comprehensive discussion of the corruption risks companies face in the Middle East, North Africa and elsewhere in the world; summarize noteworthy FCPA enforcement actions involving the Middle East and North Africa; and detail strategies companies can employ to protect themselves from the Arab Spring fallout.

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  • From Vol. 1 No.3 (Jul. 11, 2012)

    Lessons Learned on Crafting FCPA Compliance Programs from the Largest FCPA Case in History

    With the recent criminal and civil charges brought against former Siemens executives, a new chapter in the Siemens case has begun.  Siemens paid a record-setting fine to the U.S. government of $800 million in 2008 and over $800 million to German authorities, and conducted an internal investigation with a $1 billion price tag.  What did we learn – and what are we still learning – from this groundbreaking case?  In a guest article, William P. Olsen and Anne M. Eberhardt, Principal and Senior Manager, respectively, in Grant Thornton’s Forensic and Valuation Services practice, review the history of a company that revolutionized the world’s communications and electrical industries, follow its move to a business model that was almost entirely based on corruption, and analyze its landmark settlement with U.S. officials and the pending individual indictments, addressing the key compliance precedents the Siemens matter has set.

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  • From Vol. 1 No.3 (Jul. 11, 2012)

    Ernst & Young’s 2012 Global Fraud Survey Highlights Significant Challenges in Dealing with Corruption and Bribery Risks

    Ernst & Young (E&Y) recently released the results of its 12th Global Fraud Survey.  Through an independent research firm, E&Y interviewed 1,758 company executives across 43 countries to gauge their perspectives on the current prevalence of bribery, fraud and other corruption, and their attitudes towards practices that might run afoul of anti-corruption rules.  The survey also provides insight on attitudes, risks and regulations in the emerging markets of Africa, Brazil, China, Eastern Europe and India.  This article summarizes the key takeaways from the survey.

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