Anti-corruption compliance is not as hard as it looks.  In fact, by taking a step back, compliance professionals can gain insights. At the direction of compliance professionals, companies like to develop and adopt compliance policies and procedures.  Compliance policies and procedures give the board, senior managers and the CCO a feeling of comfort.  They are gaining a measure of control over something they have identified...

AML enforcement often includes sanctions violations.  The Office of Foreign Asset Control (OFAC) is responsible for regulating and enforcing the sanctions regime. OFAC has played a critical role in ramping up AML enforcement against major financial institutions.  Major enforcement actions have been built on OFAC violations. HSBC Holdings paid OFAC $375 million as part of its record AML settlement with US prosecutors; ING Bank forfeited...

Companies with ineffective internal controls face risks of embezzlement and self-dealing by employees, bribery, export control violations and other possible legal violations.  The payment of foreign bribes often occurs in companies that have weak internal controls. A company’s internal controls have to provide reasonable assurances regarding the reliability of the company’s financial reporting and its financial statements.  The FCPA’s books and records requirement extends to...

Lawyers, compliance professionals and senior management at companies can be obsessive when it comes to the threat of criminal liability.  Please do not get me wrong, I am not minimizing the risk of criminal prosecution, nor I am suggesting that everyone go out and start paying bribes overseas. That being said, it is important to keep things in perspective.  The most significant FCPA prosecutions –...

The FCPA Guidance is an extraordinary document filled with excellent ideas, defined safe harbors and important enforcement and compliance principles.   It is a lesson in good government, and a testament to an instructive process for government and business communications and interaction. The hypothetical scenarios and basic advice set out in the document have provided valuable insights to FCPA practitioners.  At the same time, the FCPA...

The Justice Department and the financial regulatory agencies have sent a strong message of enforcement, suggesting that financial institutions are not adequately implementing AML compliance controls. The message was heard all the way up to corporate boardrooms.  The question now is what is the industry going to do to improve their compliance programs.  This is not rocket science, and the financial industry knows full well...

At first glance, India is a country of incredible economic opportunity.  India’s GDP is slated to continue to grow five (5) percent each year.  It has the third biggest economy in the world, below the US and China. India’s ranking is 92nd in the Transparency International’s Corruption Perception Index.  Foreign investment in India is nearly $12 billion annually but has been falling in the last...

As compliance professionals enjoy the rise of their profession, lawyers are sensing a decline in importance.  I am hearing from compliance professionals a new and disturbing trend – companies are requiring compliance professionals to be trained attorneys. Since I am a lawyer, I know I should just repeat the party line and argue that compliance professionals have to be lawyers.  I cannot come to the...

The FCPA is a broad statute.  As written, it covers a number of situations, and creates twists and turns in analysis. One of the more challenging areas to navigate is the issue of joint ventures. When you bring two companies together to operate jointly, there are a number of difficult issues to analyze. First, assuming there is an adequate business justification for a joint venture...

FCPA practitioners can suffer from myopia – a narrow focus on FCPA risks.  The FCPA does not apply to company actors who take bribes in exchange for awarding contracts to companies.  That situation is commonly referred to as “kickbacks.” Taking a step back, companies face a major triad of economic crime risks.  We all know about companies paying bribes to foreign officials.  There are two...