Companies will often rely on a network of distributors to help sell their products in emerging markets.  From a business economics standpoint, engaging a distributor is often more cost efficient than investing in a sales force in a new market.  As a result, companies may enter a new market by relying on distributors, and if successful, may invest in the future by establishing its own...

As companies elevate their “game” in sanctions compliance, it is important that compliance officers critically examine the strengths and weaknesses of their compliance programs.  Many companies already have a screening technology but little else beyond a basic screening process. From my vantage point, I have observed some common weaknesses: Segregation of Duties and Control Process:  Many companies maintain a screening program and assign the responsibility...

In my showcase of profound but obvious points, let me add to my collection – an illegal bribe often turns on the actor’s state of mind.  Did he or she act with corrupt intent? The actor’s state of mind is a common element to many criminal offenses.  In most cases, the government has strong evidence of such corrupt intent.  In some cases, the government is...

The Microsoft FCPA settlement, while not significant in the total penalty of approximately $25 million, provides some important instructions concerning distributor and re-seller risks and mitigation strategies.  Here are five important lessons learned:  Discount Controls and Customer/End User Pricing: Microsoft agreed to provide significant discounts based on false justifications.  Microsoft failed to confirm the justification for the discounts that permitted the bad actors to create...

In yet another major compliance development, the Justice Department announced the adoption of a new policy to credit effective compliance programs in resolving criminal cartel prosecutions against corporations. Since the 1990s, the Antitrust Division’s policy regarding corporate compliance programs was generally fixed given the ability of companies to seek benefits under the leniency program. As part of its new policy, the Antitrust Division released its own...

Microsoft’s bribery and controls violations reflect significant risks facing companies that rely on distributor and reseller networks to sell their products.  Companies often enter and operate in emerging markets through complex networks of third parties.  Such distribution systems create significant anti-corruption risks that have to be managed and mitigated. It is worth taking the time to examine the precise outlines of the conduct at issue...

Microsoft finally resolved its FCPA enforcement action with a whimper.  Notwithstanding prior suggestions that Microsoft’s investigation uncovered global conduct, Microsoft’s liability focused primarily on Microsoft’s conduct in Hungary.  Even with the tailored settlement agreement,  DOJ and the SEC reiterated robust expectations surrounding third-party distributor networks, particularly in the software industry. To resolve a lengthy six and one-half year investigation, Microsoft entered into a non-prosecution agreement...

As compliance strategies evolve and improve, more attention is being paid to data and measurement of a compliance program.  Like every task associated with compliance, professionals have to be smart when it comes to this issue.  A compliance program generates (or has access to) a vast amount of data and it is easy to get lost in the morass of data without any appreciable benefit....

Chief compliance officers have a hard job.  CCOs know that fact and them fully embrace the challenges of their positions.  At the same time, CCOs have extraordinary expectations placed on their shoulders – they are rarely complemented about their programs while the company avoids any major controversies, but they are one of the first to be questioned when a compliance breakdown occurs.  CCOs are always...

In celebration of the 100th episode of Corruption Crime and Compliance, Tom Fox, the Compliance Evangelist and Leader, is our guest.  Tom and Mike discuss Tom Fox’s current Compliance Podcast Network, his entertaining Star Trek summer compliance podcast series, his perspective on the recent government compliance guidance, his insights into the compliance profession, technology developments and the future of compliance.  As always, Tom’s perspective on...