Both the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act require that organizations undertake comprehensive anti-bribery risk assessments as a first step towards compliance with their mandates. From a practical perspective, it makes perfect sense that companies should first seek to understand risk exposure and the issues they face before taking action to address them. Conveniently, not only do risk assessments uncover areas of risk, well-executed assessments also help illuminate mitigation prioritization for the risks identified.

Like many global organizations, CSR plc , a provider of silicon and software solutions for the electronics and technology industries, faces increasing compliance challenges from regulations such as the US Foreign Corrupt Practices ACT (FCPA) and UK Bribery Act (UKBA).  Working closely with SAI Global, CSR developed a learning program based on existing courseware that was designed to embed, communicate and reinforce a zero tolerance stance on bribery and corruption with all employees across CSR’s worldwide locations.

Presented by Stephen Martin

Managing Director, Baker & McKenzie Compliance Consulting

According to a recent study released by Kroll Advisory Solutions, only 47% of Asia Pacific companies surveyed had conducted an assessment of the risks stemming from enforcement of the U.K. Bribery Act and the U.S. Foreign Corrupt Practices Act (FCPA). Of those who did not conduct assessments, 51.3% either do not know how strong their compliance programs are or believe their compliance programs are not strong enough. Asian companies have been the target of U.S. enforcement action in the past.

According to a recent study published by FTI Consulting Inc., data privacy issues are the biggest challenge companies face when conducting multinational internal investigations. 54% of respondents answered that data privacy was the biggest obstacle when conducting these types of investigations. 114 legal and accounting professional who handle e-discovery in these matters participated in the survey. The study is being released at a time when the number of internal investigations is on the rise due in large part to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. Almost half of the respondents indicated that they had needed to collect data as part of an internal investigation in China. These types of investigations are particularly difficult in China due to its complicated data privacy laws. Additionally, those responding to the survey indicated that multinational investigations were costly undertakings. 48% of respondents reported that they spent more than $500,000 on these matters. 76% of respondents also indicated they believed there would be an increase in data privacy requirements over the next several years.

Wall Street Journal: Study Says Data Privacy #1 Obstacle in Multinational Probes (5 September 2012)
(Source: Wall Street Journal)

This multi-part series on Managing Anti-Corruption Risk focuses on the business processes that can both build organizational integrity and help mitigate the risks presented by bribery and corruption.

In Part 3, Anti-Corruption Issue Management, a step-by-step process that leads to effective compliance is laid out for compliance, ethics, legal, investigative and risk professionals. A key underlying element of effective compliance is defined as the ability to not only resolve issues but also identify their direct causes and the relationship among issues.

The focus of this multi-part series centers on the ‘how to’ of bribery and corruption risk management, i.e. the business processes that can both build organizational integrity and help mitigate the risks presented by bribery and corruption, specifically the FCPA and UK Bribery Act. Each guide provides a graphic depiction of a key aspect of an effective anticorruption program, beginning with the first guide that addresses defining and managing the risk of corruption.

According to a new online survey from Deloitte LLP (Deloitte), only one tenth of respondents are concerned about a U.K. Bribery Act (UK Act) enforcement action being brought against their company. 57% of respondents indicated they were not concerned and one third said they did not know. Those surveyed included representatives from the financial services, consumer and industrial products, technology, media and telecom industries. Only one enforcement action has been brought under the UK Act, against a law clerk for taking small bribes in exchange for fixing traffic tickets. Chris Georgiou, a partner in Deloitte’s forensic and dispute services practice, said that much has not been learned regarding the UK Act because of the lack of enforcement actions. About one-fourth of respondents indicated their companies have changed their compliance programs because of the UK Act, while 22% indicated their companies have not changed their compliance program. The remaining respondents indicated they did not know if their compliance programs have changed or the UK Act did not apply. While concerns about the UK Act might be low, the survey indicated that there is heightened concern regarding enforcement actions against individuals, especially in the U.S. More than half of respondents said that the number of enforcement actions brought against executives will increase, while seventy-five percent of respondents to March survey by AlixPartners indicated they had increased their compliance related to the U.S. Foreign Corrupt Practices Act. Additionally, almost half of respondents participating in the Deloitte survey indicated that corruption risk had increased over the past year in emerging markets.

Wall Street Journal: Companies Show Little Concern about UK Bribery Act Enforcement. (25 June 2012)
(Source: Wall Stret Journal)

According to a survey conducted by Ernst & Young, 72% of middle managers working in Britain were not aware of the Bribery Act 2010 (Act). Additionally, of the 28% of middle managers who do know about the Act, only 55% feel they have been provided with enough training to enable them to abide by the law. According John Smart, a partner at Ernst & Young, "The survey results should serve as a stark warning to firms that they should ramp up their compliance procedures to ensure that clear anti-bribery policies are in place."

ILM: Survey: 72% of managers unaware of Bribery Act (13 April 2012)
(Source: Institute of Leadership & Management)

The Financial Service Authority (FSA), the United Kingdom (U.K.)’s financial-services regulator, does not believe that investment banks are implementing the anti-bribery and anti-corruption reforms required by the U.K. Bribery Act. Beginning in August of 2011 the FSA conducted a review of 15 investment banks. During its review, the FSA found that almost half of the banks did not have an adequate anti-bribery or corruption risk assessment. Additionally, the review found that management of those banks had “poor” information regarding their internal controls which would make it difficult for those management teams to provide the required effective oversight. Only two of the banks had conducted or begun internal audits of their anti-bribery and corruption programs. The FSA also found “significant issues” regarding the banks’ use of third parties to get or keep business. The FSA has said it will provide new guidelines after a three month consultation period.

Wall Street Journal: UK Finds Anti-Bribery Shortfalls At Investment Banks (29 March 2012)
(Source: Wall Street Journal)