Category: General

Complicating Sanctions Compliance: OFAC Redefines 50 Percent Rule

Companies are worried more and more about sanctions compliance. As the number and complexity of sanctions grow, depending on the twists and turns of our foreign policy, companies are whipsawed in the area of sanctions compliance. The Treasury Department’s Office of Foreign Asset Control tries to keep everyone informed and is often available for consultations. It has a hard job. OFAC expects a lot from...

Kreller Group Blog: “Instrumentality” Defined for FCPA Purposes

As my readers know, The Kreller Group is a sponsor of my blog.  The Kreller Group provides corporate investigative services. The Kreller Group has started a bi-monthly blog. Kreller’s first posting on its blog — “Instrumentality” Defined for FCPA Purposes– is available here. Happy Reading.

Warning: Banks Need to Re-Examine KYC Risk Evaluation Procedures

A federal jury in New York recently handed down a verdict against the Arab Bank, Jordan’s largest bank, for funding Hamas terrorism acts against Israel. The verdict is precedent setting and will encourage other plaintiffs to challenge bank conduct that enables terrorism. The plaintiffs put on evidence that the Arab Bank conducted business with 150 Hamas leaders and operatives in the early 2000s, and helped...

GSK China: Did Case Finish with a Bang or a Whimper?

In typical Chinese fashion, the prosecution of GSK and several GSK executives ended after a one-day “trial.” GSK paid a $489 million fine; and four criminal sentences were handed out with suspension of jail time and orders of deportation. GSK also issued an apology. The question is whether the GSK case went out with a bag or a whimper? Clearly the GSK case was resolved...

More Empty Words for an FCPA Compliance Defense

The difference between the almost right word & the right word is really a large matter–it’s the difference between the lightning bug and the lightning — Mark Twain (1888). It is hard to understand why there are still advocates for an FCPA compliance defense. The issue is dead and gone, and is unlikely to come back in any form. I guess there are people who...

New RAND Publication: Transforming Compliance: Emerging Paradigms for Boards, Management, Compliance Officers, and Government

I was honored to participate in a RAND roundtable meeting on May 28, 2014, Transforming Compliance: Emerging Paradigms for Boards, Management, Compliance Officers, and Government. The meeting included three white paper submissions, one of which I authored on the changing relationship between chief compliance officers and general counsels.  The report and the papers are fascinating and address cutting edge ethics and compliance issues. The report...

Accountability: Where is the Board of Directors?

Compliance professionals like to emphasize that accountability is essential to create an ethical culture. There is no question that if a company does not hold anyone accountable for ethics and compliance issues a company is unlikely to foster a meaningful culture. To put it another way, if senior management is not held accountable for their actions or failures to act, then it is hard to...

Important Employee Values: Integrity and Trust

I have urged compliance professionals to avoid scare-tactics as a way to enhance their importance in the corporate organization. It is too easy to run around and spread fear about the importance of compliance to prevent a government investigation and prosecution. That message is too negative and turns off listeners. Moreover, everyone in senior management knows the risks of a government enforcement action. They do...

Governance, Compliance and Simplicity

I have always admired the ability of intelligent people to explain complex ideas in simple terms. Prosecutors have to explain complex facts and crimes to a jury. If you ever watch TED talks online, you can see a variety of speakers who have mastered difficult concepts and explain them in terms that are accessible to a wide audience. This same approach is needed in the...

International Coordination and Cooperation in Corruption Cases

Global anti-corruption enforcement is fast becoming a complicated affair. No longer can companies just focus on the FCPA, with momentary blips of concern for the UK Bribery Act. The OECD and other international organizations want to see aggressive enforcement around the globe, and they are doing a great job of pushing countries on this issue. Of course, the more cynical view is that more countries...