For a long time, FCPA had been the major – almost exclusive - anti-bribery law that US companies had on their anti-bribery radar lists. Training programs, policies and procedures were specifically tailored to address its specific requirements, especially with respect to dealing with government officials. Even for global companies, putting FCPA anti-bribery risk mitigation processes in place meant ensuring compliance with major anti-bribery laws.
With the winter holidays approaching, it’s a good time to refresh employees’ memories about your company’s gifts and hospitality rules. The general message to employees should be absolutely clear: follow the rules, seek help if you aren’t sure what you can or can’t do, use good judgment and never do something that just doesn’t feel right. You might include the following list of additional reminders:
The Department of Justice’s declination to prosecute Morgan Stanley for its bribery issues in China due to the firm’s demonstrable commitment to an anti-bribery program (including training) set the compliance community abuzz this fall. Pundits were pleased to finally hear some declination-related detail, the nature of which was previously held close to the vest by both prosecutors and involved parties. Until the Morgan Stanley news, there was a dearth of information from the government about specific program components and mitigation activities that could potentially convince the DOJ or SEC not to prosecute.
While certainly not without its challenges (not the least of which include organizational, administrative, and antitrust) the consortium approach to conducting third party due diligence may prove to be an effective and cost-efficient model for industry groups to consider.
Earlier this week, I came across an article on law.com which provided some excellent benchmarking information on corporate anti-corruption policies. The benchmarking was based on the coverage of specific risk areas within companies’ codes of conduct. The risk areas the authors looked for included bribery (specifically the Foreign Corrupt Practices Act (FCPA)) and gifts & entertainment. The article inspired me to take SAI Global’s training data for 2011 and look for the similar trends in coverage.
German banker, Gerhard Gribkowsky is at the centre of the latest scandal to engulf the glamorous world of Formula 1 racing. At the end of last month, the former head of risk for state-owned BayernLB was sentenced to 8 ½ years in jail for receiving bribes to the tune of $44 million during the sale of the bank’s stake in F1 racing back in 2005. In exchange for a reduction in his sentence, Gribkowsky gave a full confession, naming none other than Formula 1 supremo Bernie Ecclestone as the source of the bribe.
Recently, much of the focus on mitigating the risk of bribery and corruption has been centered on the challenge of conducting due diligence upon third party partners. This seems perfectly reasonable for a number of reasons- it can be a daunting task; the UK Bribery Act Guidance enumerates it as one of the steps to achieve “adequate procedures,” and; recent U.S. DPAs underscore its importance as a part of an effective program. However, the recent Morgan Stanley bribery news also reminds us that plain old training of employees and third parties is still a critical component of a robust anti-bribery program.
I recently read an interesting article written by Alexandra Wrage in Corporate Counsel entitled “Avoiding Trouble with Third Party Intermediaries.” You can access the article here. While the topic of third party due diligence has been well covered in the past year, Alexandra’s article contained some observations that caught my attention.
The recent publishing by the British Standards Institute of a new standard for implementing an anti-bribery management system (BS 10500: 2011) must surely be a welcome development for the business community – specifically those businesses who are still trying to get to grips with the infamous ‘grey’ areas of the UK Bribery Act.
What conclusions can we draw from the DOJ’s decision not to prosecute Morgan Stanley? With the increased enforcement of the FCPA over the past several years, companies have been clamoring for more guidance from the Department of Justice on how and why the agency decides to prosecute companies for the behavior of its employees. In the press release regarding its decision to not prosecute Morgan Stanley, the DOJ cites several aspects of the company’s compliance program that could be used as a benchmark for what the DOJ considers to be an effective compliance program.
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